Home' Trinidad and Tobago Guardian : May 9th 2013 Contents MAY 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG7
AHigh Court judge has ordered
RBC (Caribbean) Ltd to pay a
retired bank manager almost
$1 million after ruling that the
bank failed to uphold the terms
and conditions of its staff retirement plan.
The payment formed part of a 24-page
judgment which was deliverered by Justice
Judith Jones on April 12 in favour of former
RBC employee Deborah Braithwaite, who took
early retirement from the bank in January
According to the judgment, on her retire-
ment from the bank, RBTT Financial Holdings
(as the company was then known) declared
Braithwaite to be entitled to the sum of
$787,520 under Employee Stock Ownership
Plan (ESOP) II, the staff reirement bonus
That entitlement, the bank argued, repre-
sented 39,376 shares in RBTT Financial Hold-
ings at a value of $20 each.
Braithwaite claimed she was entitled to an
additional payment of $2.66 million from the
bank on her retirement.
Braithwaite s attorneys contended that in
addition to the 39,376 shares, she was entitled
to the benefit of an additional 39,376 shares
from RBTT s 1999, one-for-one bonus issue.
She also alleged that RBTT s decision to
fix the redemption price at $20 a share was
done unilaterally and in breach of the terms
and conditions of her contract of employment
and/or the terms and conditions of the ESOP
II.Braithwaite therefore asserted she was enti-
tled to 78,752 shares in the ESOP II at the
prevailing stock exchange rate of $36 a share.
As a result, she claimed to be entitled to
an additional sum of $2,047,552 as the value
of the 78,752 shares at $36 per share, less
what she had been paid. She also contended
she was entitled to received dividends on the
shares for the period March 31, 1999 to March
31, 2007, which would have amounted to
In the judgment, Jones ruled that, because
of her membership of the plan, there was a
contractual agreement between Braithwaite
and the bank.
Braithwaite had claimed the bank unilat-
erally adjusted the provisions of the original
plan in 2001 by fixing the redemption rate
of the plan s stock to $20.
"On the evidence, it is clear that this was
a unilateral decision taken by the bank, the
details of which were only communicated to
its employees some three-and-a-half years
after the operative date. Neither can it be
disputed that the varied terms were less
favourable to the members of ESOP II," Jones
Jones ruled that the bank was not entitled
to make such a unilateral change and said
Braithwaite s retirement package should have
been calculated at the market rate of the
shares at the time: $36.
"At the end of the day, it is clear that the
main reason the change was made was as a
result of underfunding of the plan by the
bank," Jones said.
As a result, she said Braithwaite was entitled
to an additional $630,016 for her shares as
well as $320,126.88 in dividends for the period
March 1999 to March 2007.
Justice Jones added: "The claimants claim
for the sum of $1417,536 representing the
value of an additional 39,376 units is dismissed
as are her claims in the sum of $94,926.24
representing dividends on those additional
units and the sum of $262,506.67 which she
says was deducted from the monies paid to
her for the payment of income tax."
Braithwaite was represented by senior coun-
sel Douglas Mendes and attorneys Stuart
Young and Anthony Bullock. Martin Daly,
SC, appeared for the bank.
In defence of the claim, the bank relied on
the Limitation of Certain Actions Act, which
prevents the bringing of lawsuits four years
after an alleged contractual breach occurs
unless it is done in special circumstances.
The bank submitted that the breaches being
complained of by Braithwaite in her lawsuit
allegedly occurred between 1999 and 2001.
The bank claimed that Braithwaite s claim
fell beyond the limitation period in the leg-
islation as it was filed in 2011.
Jones rejected this argument, saying: "It
would seem to me that the breach would
have occurred upon retirement when the
bank failed to pay Braithwaite the sums of
money she would have been entitled with
respect to her units under ESOP II."
According to the evidence in the lawsuit,
when Braithwaite started at the bank in August
1974, she joined the first scheme of the ESOP
1. In 1984, the bank, through an internal
memo, informed its employees of a new plan
titled ESOP II. All full-time employees were
allowed to join the new plan voluntarily and
had to request the membership in writing.
Braithwaite joined. Both plans allowed
employees to acquire stock in the bank.
However, under the provisions of ESOP II,
employees were not required to contribute
to the plan as it was funded by the bank
through allocating ten per cent of each mem-
ber s annual basic salary.
As part of the conditions of the original
ESOP II, plan members were to be paid annual
dividends dependant on their assets in the
plan. Upon death or retirement, members
would receive the equivalent market value of
In December 1988, the bank advised its
employees of changes to the plan. Membership
now became automatic upon employment
at the bank. The changes included a clause
which gave members the option to apply their
dividends to Compensation Savings Plan or
towards voluntary life insurance coverage.
In 1991 and 1996, the bank declared bonus
issues of its shares, which were replicated in
the ESOP II plan. A similar issue was done
in June 1999.
In her lawsuit, Braithwaite claimed although
the two previous bonus issues were applied
to the retirement fund, the third was not.
Jones, in her judgment, dismissed Braith-
waite s claim that she was entitled to the
1999 share issue.
"The difficulty with this submission is that
Braithwaite provides no basis for this enti-
tlement, save, perhaps, that it was done on
two previous occasions," Jones said.
In June 1999, another memo was distrib-
uted in which the bank said it planned to
wind up EPOS II and replace it with a new
plan. The memo further stated members of
the old plan would now be members of the
Braithwaite claimed she had not been
informed of the details of the new plan until
December 2001. She also said she only realised
that EPOS II had not been wound up after
consulting her attorneys following her 2007
"I find that the effect of the bank using
the term "wound up" in the circumstances
amounted to a deliberate concealment by the
bank of the true status of EPOS II," Jones
She said the effect of the closure of EPOS
II was not the disposal of the assets of the
fund, but rather that no new members be
added and no contributions be made by the
In her lawsuit, Braithwaite claimed she had
not been paid dividends on her shares from
1999, when the plan changed, to 2007, when
she retired. In her evidence, Braithwaite
showed that before 1999, she had received
the dividends payments.
"It is clear, however, that the plan continued
to hold and receive the benefit of its invest-
ments, including the RBTT shares, held by
it," Jones said.
Jones ruled that since the plan was not, in
fact, wound up, Braithwaite was entitled to
Judge orders RBC:
pension by $950,142
High Court judge, Judith Jones
Claimant's attorney Douglas Mendes
Bank's attorney Martin Daly
When contacted last Thursday, RBC
spokesperson Nicole Duke-Westfield said the
bank's attorneys were reviewing the
judgment and would then decide whether to
Duke-Westfield said: "The parties, under the
court's direction, have been afforded the time
to consider whether either wishes to appeal
any aspect of the judgement. As a result, this
matter is considered to still be open and the
bank's policy is to not comment on ongoing
matters which involve third parties."
"As a responsible company, RBC Royal Bank
provides competitive pension arrangements
for its employees as part of our overall
benefits programme," Duke-Westfield said.
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