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JPS loses appeal to recover more than $4 billion from customers

Published:Friday | March 13, 2015 | 6:20 PM

The Court of Appeal has thrown out an appeal by the Jamaica Public Service Company (JPS) seeking to recover more than $4.2 billion from customers for payments made to its workers following a reclassification exercise.

In dismissing the appeal today, the court awarded costs to the respondents the All Island Electricity Appeal Tribunal made up of retired Court of Appeal Judge Paul Harrison, attorneys-at-law Derrick McKoy and Derek Jones and the Office of Utilities Regulation (OUR).

In its appeal, JPS challenged the decision of Justice Sarah Thompson James to dismiss its application for judicial review of the decision of the tribunal.

The tribunal had determined that the OUR was correct in refusing JPS' claim in 2009 for recovery of $4.2 billion which it had incurred in salaries paid to its employees following a reclassification exercise.

The JPS had commissioned a reclassification exercise in 2000, which resulted in a recommendation for an increase in the salaries of workers.

The JPS made the payments to workers and ex-employees in 2008 and in 2009, and then attempted to recover the amounts paid out under the Z-factor provision of its licence.

However, the OUR refused the application in March 2010 on several grounds including that the JPS’ claim did not qualify under the Z-Factor provision since the costs resulted from managerial decisions.

The JPS took the issue to the tribunal in April 2010 which ruled it against it.

The light and power company then took the matter to the Judicial Review Court seeking to quash the decision of the tribunal.

Justice Thompson James heard the motion and ruled that the JPS had not proven that the action of the tribunal was irrational or illegal.

JPS then took the matter to a higher court and the Court of Appeal today ruled against the company.