The Tribune

• Owing $673k after ‘negligent misrepresentation’

• Perry, Shane told eligibility key to director joining

• Attorneys demand ‘culture change’ on fairness

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The National Insurance Board (NIB) has been ordered to pay a former director almost seven years’ worth of pension benefts after losing a legal battle over her due retirement entitlement.

Justice Diane Stewart, in an April 28, 2023, ruling found that NIB “negligently misrepresented” to Rowena Bethel that she could participate in its staff pension plan as “an inducement” to encourage her to sign a three-year contract to become its most senior executive in July 2013.

The verdict recorded how Ms Bethel “made clear” to ex-prime minister Perry Christie, and then-minister responsible for NIB, Shane Gibson, that taking the top job at the social security system depended on her receiving an NIB pension. However, it was only after she chose not to renew her contract - following “a breakdown in her relationship with key individuals at NIB” - that Ms Bethel was told she was not entitled to any pension payouts.

This was because the NIB pension scheme’s rules stipulated that persons on a fixed-term contract such as Ms Bethel, who was formerly the Ministry of Finance’s in-house legal adviser, did not qualify for any pension entitlement. Ms Bethel, asserting that she was never informed of this prior to agreeing to become NIB’s chief executive, initiated legal action seeking damages for “breach of contract or, alternatively, misrepresentation” after she received no pension for seven years.

Justice Stewart, in finding for Ms Bethel, awarded her damages equivalent to the monthly $8,207 payment she had chosen to receive as pension benefits upon her departure. These payments are to take effect from the date of her early July 2016 departure, which means that she is presently due some 82 outstanding pension payouts worth a collective $673,000 according to Tribune Business calculations. She will also receive these payouts going forward.

Callenders & Co, the law firm that represented Ms Bethel in her claim against NIB, yesterday voiced hope that Justice Stewart’s ruling will help “change the culture” that too often sees Bahamian professionals forced to take legal action to receive what is legally due to them.

Kandice Maycock, an attorney who worked on the case with Fred Smith KC, said: “Callenders & Co is extremely pleased with the result and always happy to be able to represent Bahamians who are unfairly treated and must seek redress in the courts.

“Far too often, accomplished professionals find themselves forced to take legal action in order to receive what is entitled to them. It is our hope that rulings such as these have an impact going forward and change the culture that gives rise to these unfortunate situations.”

Ms Bethel alleged that NIB made monthly $713.44 deductions from her salary as pension contributions after she signed a three-year deal to become its top executive on July 31, 2013. In March and April 2015, she was purportedly enrolled in the staff pension scheme that was managed by CFAL and provided with a pension account.

Enrollment in the scheme was said to have been critical because of a medical condition that Ms Bethel faced, and her need to financially plan for the future because of it. The pension was “a key reason for her accepting employment with NIB, as it allowed her access to the scheme in order to meet anticipated medical care costs for the condition”, and this was made clear to all prior to her signing the contract.

Ms Bethel decided not to renew her initial three-year contract upon its expiry due to a combination of “deteriorating health” and breakdown in relationships with other key NIB staff. Her departure was mutually agreed, and she received a letter on July 13, 2016, saying her pension benefit was being calculated.

NIB then write to her again on September 20, 2016, giving her two choices by which to receive payment - a monthly $8,207 payment or a $282,913 initial lump sum followed by lower monthly payments of $6,616. Ms Bethel chose the first but it was only after she wrote to NIB on October 22, 2016, saying she had received no payments that she was informed her fixed-term contract made her ineligible for an NIB pension.

“NIB accepts that Ms Bethel had not been previously made aware at any time that, because of the provision of the scheme, a pension would not be paid to Ms Bethel but denies Ms Bethel is entitled to any compensation for not being made a member of the scheme,” the former director said in her evidence.

After the Minnis administration took office, Ms Bethel alleged she met twice with Brensil Rolle, the then-new NIB minister, in a bid to resolve the matter. She was told at the second meeting he had spoken to Father James Moultrie, NIB chairman during Ms Bethel’s tenure, and then-chair of the Public Service Commission, who “assured” she was entitled to an NIB pension and that he had given the necessary instructions for this.

However, Ms Bethel never received any pension payments. She was also faced with loss of her $25,684 contributions via the monthly salary deductions plus some $130,217 in financial entitlements due from her previous government service that were supposed to have been transferred, and applied to, her NIB pension. Ms Bethel argued that as an alternative she was entitled to “restitution” worth almost $156,000 representing these two combined sums.

NIB, though, rejected her claim and argued that she “accepts she is not eligible for participation in the pension plan”. Ms Bethel, though, argued that it was “a clear, factual warranty” that she was entitled to participate by virtue of clause 15 in her contract, which stipulated: “You are eligible for participation in the Board’s occupational pension plan.”

She and her attorneys dismissed NIB’s argument that this was “void for mistake”, given that the social security system knew better than her the eligibility and qualifying criteria. As a result, it had committed “negligent misrepresentation” in not alerting Ms Bethel to this and, instead, enticed her to sign on as NIB director.

“Her evidence was that she and Father James Moultrie had a clear conversation during which he stated that she was entitled to participate in the pension scheme,” Justice Stewart said of Ms Bethel. “She stated that he had been surprised that [NIB] was still objecting to paying her the money.

“She also stated that she had a conversation with the prime minister, Perry Christie, and then minister for national insurance, Shane Gibson, whom she informed that she would not accept the role as director and chief executive unless it was guaranteed that she would be able to participate in the pension scheme.” Negotiations over her contract were also held with the then-NIB Board.

NIB, though, said the whole issue stemmed from a mistake and Ms Bethel could not receive damages “for something she never had and could not lose”. It also suggested that the pension clause in Ms Bethel’s contract was a condition and not a warranty.

Justice Stewart, though, ruled that because NIB agreed Ms Bethel’s contract terms it was “reasonable and equitable” to find she was supposed to participate in the pension scheme. “I accept, therefore, that there was a breach of the implied term and consequently a breach of contract,” she ruled, also dismissing NIB’s claim that it was void on the grounds of mistake. Ms Bethel’s claim of “negligent misrepresentation” was also upheld.

Ms Bethel, in a statement, thanked her attorneys by saying: “I think it shows that Callenders’ strong human rights advocacy extends to all persons in The Bahamas no matter their status, national origin and gender etc.”