A directive in 2016 by the Auditor General's Department that the Port Authority of Jamaica (PAJ) should take action to recover the retirement benefits paid to former executives of the Port Authority of Jamaica is to be carried out by the public body following a landmark ruling by the Supreme Court.
Two former executives of the Port Authority had filed a suit in the Supreme Court against the organisation, demanding that the public body pay them in full, discretionary benefits provided in their contracts of employment.
In a July 2016 special audit report, Auditor General Pamela Monroe Ellis raised concern about discretionary retirement benefits paid to executives who had already received gratuity payments.
One former senior executive walked away with pension and gratuity amounting to approximately $146 million.
Monroe Ellis, in her special report, had pointed out that the requisite approval was not sought from the Ministry of Finance for discretionary retirement benefit to be paid to the executives. This constituted a breach of the ministry's guidelines.
The auditor general had made it clear that persons who received contract gratuities would not also be entitled to retirement benefits.
In a statement to Parliament yesterday, Prime Minister Andrew Holness said the Port Authority had requested the approval of the finance ministry to pay a reduced retirement benefit based on an agreement which was negotiated with the former executives.
However, before the ministry could respond to the request, two former executives filed a suit in the Supreme Court against the Port Authority.
The executives claimed that the PAJ erred in acting on the advice of the auditor general and that the public body is liable to pay them the full discretionary retirement benefits.
However, the Supreme Court dismissed all claims brought against the PAJ in November 2017 by the retired executives.
According to Holness, the court acknowledged the role of the auditor general and the Port Authority's obligations to comply with the directions of that office.
"I think that that ruling is a signal to other MDAs (ministries, departments and agencies)," the prime minister noted.
Holness said the court found that the PAJ did not act irrationally when it sought and followed the advice of the auditor general.
An appeal has been filed against the court's decision.
Holness said unless and until the Court of Appeal makes a different ruling, the Port Authority and the Government will be guided by the decision of the Supreme Court.