Antigua Commercial Bank v White
| Jurisdiction | Antigua and Barbuda |
| Judge | Bishop, J.A. |
| Judgment Date | 05 June 1989 |
| Neutral Citation | AG 1989 CA 2 |
| Docket Number | Appeal No. 1 of 1988 |
| Court | Court of Appeal (Antigua and Barbuda) |
| Date | 05 June 1989 |
Court of Appeal
Robotham, C.J.; Bishop, J.A.; Moe, J.A.
Appeal No. 1 of 1988
A. Alexander, Q.C. and J. Simon for appellant
S. Benjamin for respondent
Industrial law - Contract of service — Termination — Unfair dismissal — Compensation — Antigua Labour Code 1975, c.60 (1) (e) — Companies Act, Cap. 358, s.106 — Appeal dismissed — Finding that respondent unfairly dismissed upheld — Amount of compensation awarded by Industrial Court varied slightly.
Bishop, J.A. This is an appeal against the decision of the Industrial Court, delivered on the 30th December 1987, in which that court found that the dismissal of Mary White, from her post as the Internal Auditor of the Antigua Commercial Bank (A.C.B.), a limited liability company registered under the laws of Antigua and Barbuda, and carrying on the business of banking, was unfair and done in circumstances that were harsh and not in accordance with the principles of good industrial relations practice. The court awarded Mary White $268,000.00 by way of compensation and ordered that this amount be paid to her by the A.C.B. not later than 18th January 1988.
It is necessary, in my view, to fully relate the history of this matter in order to provide a clear appreciation of the facts and circumstances which culminated in the termination of her employment.
On the 8th December 1981, Pannel Kerr Forster, chartered accountants, wrote a letter to the Board of Directors of the A.C.B, based upon an audit for the year ended 30th September 1981. It advised that the said accountants had examined the principal internal controls which the said Hank had established to enable it to ensure accuracy and reliability of its records and to safeguard its assets. That letter stated in part:
“…we are now writing to you to draw your attention to the weaknesses in the system of, internal control or the implementation thereof, which came to our notice during this examination and to recommend ways in which the system can be improved…
We have observed that the Bank's activities are growing at a steady rate annually. This carries with it a significant increase in the volume of transactions. The Bank's present procedure does not include the position of an internal auditor. Such person… will provide for continuous testing in all areas of the Bank's operation. Without an internal auditor it would be very difficult for the Bank to continue to maintain proper controls over all banking operations…”
The letter contained a recommendation that the Bank employ an internal auditor, whose duties would include:
“(i) the internal auditor should not have any operational duties and should report directly to the Board of Directors by issuing written reports at least monthly;
(ii) prepare audit programmes to provide for testing in all areas of the Bank's operations;
(iii) have various discussions with the Manager, Accountant, and other supervisors concerning the Bank's assets, systems and daily transactions; and
(iv) ensure that the Bank's system is properly documented and operating effectively.”
By letter of 22nd November 1982 dealing with the audit for the year ended 30th September 1982, the chartered accountants again recommended to the Board of Directors of the A.C.B., inter alia, “that the Bank employ an internal auditor whose duties… would be to ensure that the Bank's system of internal control is properly documented and operating effectively, and to ensure that the Bank's assets are properly safeguarded”. The chartered accountants also observed that a number of customers (including E. Alex Benjamin, Harney Motors, O'Beez Food Store) had exceeded their overdraft limits by excessive amounts at year-end and they emphasized that the Bank was in a “borderline liquidity position”.
It is helpful to refer here to a letter dated 20th April 1983 from, the Financial Secretary to “all Commercial Banks/Authorized Exchange Dealers”, pointing out that most of the applications for permission to open and operate Foreign Currency Accounts did not appear to meet the criteria of the 1971 Exchange Control Regulations; and in order that the customers might be advised, a copy of the existing Exchange Control Regulations was appended with the relevant section highlighted. The Financial Secretary stated also that he was concerned over the general administration of the delegated authority to approve E forms for sums required in respect of Collections Business related to the importation of goods. The requirement of the Regulation was explained and then the Financial Secretary stated: “This requirement has not been consistently adhered to in the past and I would appreciate that immediate remedial action be taken in this connection”.
On the 18th August 1983, Management letter based on the interim audit for the year ended 30th September 1983 was written by Pannell Kerr Forster to the Board of Directors of A.C.B. It contained recommendations for improvement, under a number of headings, including: Dormant Accounts, Overdraft limits, Loans, Staff Current Accounts, Customer Foreign Currency Accounts. Under the last-mentioned heading, the accountants wrote thus:
“We observed that there was no such Government approval received for any of the U.S. dollars fixed deposit accounts opened. Approval was received for only six out of twenty U.S. dollar current accounts opened. We recommend that the situation be rectified immediately and Government approval be sort” (!) (that must be “sought”) first before opening all future foreign currency accounts.”
It is my view that this letter of 18th August 1983, read in its entirety, indicated in no uncertain terms, such a low level of efficiency in A.C.B. as would not normally be imagined in operations of a bank. It is not necessary, for the purposes of this case, to recite the many observations and recommendations made to the Board of Directors of the Bank. That letter was exhibited and formed part of the Record before us.
The above recital of facts formed but a small part of the background for what followed, and to which I now turn.
On the 26th December 1983, having read an advertisement, Mary White submitted a written application for the post of Internal Auditor at the Antigua Commercial Bank. She was interviewed on the 10 th February 1984, and in a letter of the same date, she was offered the post subject to certain stipulated conditions of employment. Among such conditions were (1) salary: $3,500 per month to be reviewed on an annual basis, with increments at the discretion of the Board of Directors (2) vacation leave: after a year's service, annual vacation of one calendar month and up to two weeks might be accumulated each year for a period of three years … (3) social security and medical benefits (4) medical plan with life insurance benefit (5) notice: in the event of termination of appointment, 3 months salary in lieu of notice. Duties and Reporting Responsibilities were also stated. The duties were: (a) to design audit programs (b) to review and evaluate the effectiveness and adequacy of the Company's internal control (c) to ensure that the necessary controls are in place and functioning effectively in compliance with established policies of the Bank (d) to ensure that the revenue from all aspects of the Bank's operations is collected and brought into profits (e) to ensure that all expenditures and charges are correctly authorized and properly chargeable (f) to detect evidence of manipulation or fraud and report promptly (g) to recommend improvements in policies and procedures aimed at assisting the organisation to better meet its operational goals (h) to carry out special investigations and/or functions which the Board and/car Management may need from time to time and (i) to undertake certain line functions on a rotation basis to assist in the proper segregation of duties. The Reporting Responsibilities were to report through the Manager to the Board and to forward directly to the Board copies of all reports.
Mary white - if she accepted the offer - was requested to report for work on the 1st March 1984. She accepted and reported for work. At a later date, and following a meeting of the Board of Directors, Mary White was handed a letter and told by the then Chairman, that after reading it, she should leave the office. It was a letter of dismissal to which I shall refer, in detail, later.
It cannot be disputed that the duties required of Mary White were vital to the success of significant aspects of the Bank's operations; and these duties must be born in mind as the facts and circumstances of this case are analysed. To refer to the unchallenged testimony of Mary White, she was told that the Bank was depending on her “to make things right”.
The Record showed clearly that Mary White went about her duties with a tenacity of purpose which could only produce a degree of competence of which any employer might be proud. Indeed, it seemed that. in her desire for great achievement, she displayed a devotion not demonstrated by some others working at or associated with the said Bank.
On assuming office, the Internal Auditor met with the then Manager who agreed that, along with the Assistant Manager Administration (A.M.A.), she would decide upon the issues affecting administration; and by her fifth day at work, Mary White completed the preparation of a Memorandum of Understanding, addressed to the said Assistant Manager. That Memorandum contained recommendations in respect of each of four main topics discussed by them (namely, Wasteproof, Teller Area, Savings Department and general up-dating of posting General Ledger Accounts). It is, in my view, beyond question that her recommendations reflected a keen awareness of her duties and that they were made in the best interest of the Antigua Commercial Bank.
On the 22nd March 1984,...
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