The Caribbean Court of Justice (CCJ) found that former Chief Executive Officer of the New Building Society (NBS), Maurice Arjoon is indeed entitled to his full pension benefits but not severance pay.
Arjoon was found to be wrongfully dismissed by the NBS. He was dismissed in June 2007, months before his retirement date, alongside two others, following the disappearance of $69 million from the account of Bibi Khan. The men were subsequently exonerated of the charges.
Arjoon then moved to the High Court and filed a $550 million wrongful dismissal lawsuit against his former employer. In 2017, he was awarded $79,282,801 in outstanding payments and benefits by High Court Judge Brassington Reynolds. Later, Court of Appeal Judge Rishi Persaud had ordered the NSB to pay $59,033,281 for pension and stayed the remaining $20,249,801 which was awarded for severance.
The CCJ found that Arjoon involuntarily retired and should indeed get his full pension benefits, which are payments he would’ve gotten upon retirement. Since he got those full pension benefits, the CCJ, in a 3-2 decision, however found that Arjoon could not also get his severance pay. In simple terms, severance or severance pay refers to an amount paid to an employee on the early termination of a contract.
See below the full release issued by the Caribbean Court of Justice (CCJ):
On Tuesday, 19th March 2024, the Caribbean Court of Justice (CCJ) delivered reasons for decision in Maurice Arjoon v The New Building Society Ltd, Trust Company (Guyana) Ltd, Executor of the Estate of Ahmad Khan, Seepaul Narine and Nizam Mohamed [GYCV2023/002], a decision in its Appellate Jurisdiction. The CCJ reversed the decision of the Court of Appeal of Guyana. In keeping with its commitment to access to justice, this was the first time the CCJ integrated a sign language interpreter into its judgement delivery process.
On 14 August 2007, after a course of employment spanning almost 30 years, the New Building Society Ltd (NBS) terminated the employment of Mr Maurice Arjoon as company Director/Secretary/CEO for what they alleged was ‘serious misconduct’. Mr Arjoon was due to retire six months later at age 60. Mr Arjoon had made pension contributions over the years, and so did NBS on his behalf.
Mr Arjoon initiated proceedings in the High Court, asserting that he had been wrongfully dismissed. The trial judge, Justice Reynolds, upheld the claim, and found that Mr Arjoon had been wrongfully and unlawfully dismissed. Justice Reynolds awarded Mr Arjoon a payment in lieu of notice, severance benefits, and a lump sum representing full pension benefits up to 30 June 2017, and thereafter a monthly pension until his death.
On appeal, the Court of Appeal agreed with the trial judge’s finding that Mr Arjoon had been wrongfully dismissed, but reversed the trial judge’s award of full pension benefits, and instead awarded Mr Arjoon a sum representing the pooled pension contributions of both Mr Arjoon and NBS over the years.
Mr Arjoon appealed to the CCJ. The respondents cross-appealed. The appeal and cross-appeal were heard on 10 October 2023. On 23 October 2023, the CCJ made an order setting aside the judgement of the Court of Appeal and restoring the order of Justice Reynolds; reserving, however, the issue of Mr Arjoon’s entitlement to severance pay until the CCJ issued its reasons for decision.
In its reasons, the Judges agreed that Mr Arjoon had been wrongfully dismissed, and that he was entitled to full pension benefits as ordered by Justice Reynolds. On the issue of Mr Arjoon’s claim to severance payment under the Termination of Employment and Severance Pay Act (TESPA), the Court was divided 3-2.
Justice Denys Barrow, writing for the majority which included President Adrian Saunders and Justice Peter Jamadar, explained that it could be considered that Mr Arjoon involuntarily retired and was therefore entitled to receive his full pension benefits. As to Mr Arjoon’s claim to severance pay in addition to pension, however, Justice Barrow underscored that since full pension benefits were to be paid to Mr Arjoon as if he had retired, the argument that severance pay should be paid because Mr Arjoon was terminated and was thus unable to retire, could not succeed. In separate concurring opinions, President Saunders and Justice Jamadar agreed with Justice Barrow’s conclusions.
Justices Maureen Rajnauth-Lee and Andrew Burgess concurred with the majority except on the decision refusing severance pay to Mr Arjoon. They were of the view that having regard to the policy behind TESPA, Mr Arjoon was entitled to both his full pension benefits and severance pay.
The matter was heard by the Honourable Mr. Justice Adrian Saunders, President and the Honourable Justices Maureen Rajnauth-Lee, Denys Barrow, Andrew Burgess, and Peter Jamadar.
Mr Edward A Luckhoo SC with Mr C V Satram, Mr Ron Motilal, and Ms Eleanor Luckhoo appeared for the appellant. Mr Stephen Fraser SC with Mr Teni Housty and Ms Shantel Scott-Lall appeared for the respondents.
