Police officers are ready to take a Government challenge to their pay award all the way to the Privy Council.

The Bermuda Police Association (BPA) is seeking legal advice on pursuing the matter to the Island's highest court of appeal, in London.

Justices in the Court of Appeal last week quashed part of the BPA's arbitration award by the Permanent Police Tribunal in June 2008.

They ruled Government was right to challenge the Tribunal's decision to class officers' 'combined allowance' as a salary supplement, so making it pensionable.

Government launched the judicial review as it said the Tribunal was prohibited from making any award concerning pensions, and so its decision was unlawful.

Court of Appeal judges Edward Zacca, Sir Austin Ward and Sir Robin Auld upheld the appeal on November 18.

Last night BPA President Detective Sergeant Grant Tomkins said: "We are disappointed with the Court of Appeal's decision and are discussing a way forward with our lawyer.

"We are requesting considering leave to appeal to the Privy Council.

"The message from the hearing was quite clear we believe, that the appeal by Government was upheld on a technicality but that Government should still do the right thing and allow combined allowance into Police pay."

Det. Sgt. Tomkins added: "We are also seeking meetings with the Minister (of Labour, David Burch) and his Permanent Secretary."

The BPA has argued the ten percent combined allowance is subject to payroll tax and is "part of an officer's total pay package".

"The amount should be incorporated into salary and the total amount should be pensionable with appropriate contributions being paid into the superannuation fund," the BPA told the Tribunal.

Government's position however is that the allowance is different to salary as it could be withdrawn and so it is not pensionable. Government told the Tribunal: "This is an allowance designed to compensate officers for expenses incurred in the conduct of their duties and not a salary supplement.

"It would cost $7 million (approximately), and the money just isn't there."

Government says to make such an allowance pensionable would also set a precedent for other workers, creating 'wage inflation'.

In its June 11, 2008 ruling the Tribunal said the combined allowance should be "redefined" as a "salary supplement", and be backdated as pensionable since 2005.

Government however, challenged this in the Court of Appeal, arguing the Tribunal was unlawful to rule on a matter of pensions. This was upheld.

Lawyer Charles Richardson told The Royal Gazette the latest ruling would save Government between $7 and $10 million in backdated and future payments.

Mr. Richardson said: "The Government always opposed it and told Police it would just be too expensive to fund that type of pension update. It also wouldn't be fair to other Government workers it would be robbing Peter to pay Paul.

"It wasn't that no one thought Police officers didn't deserve it."

He added: "Also, we don't think we can lawfully do that, as making something part of salaries first needs Parliamentary approval."

In their written judgment on November 18, Mr. Justice Sir Robin Auld recommended the arbitration award be quashed.

He said: "I would allow the appeal and quash the award."

Mr. Justice Sir Austin Ward said: "There can be no doubt of the intention of the Tribunal in making the Award. The Tribunal attempted to give the combined allowance a degree of permanence so that it could no longer to unilaterally withdrawn by Government.

"Government should note what the Tribunal attempted to do and, when appropriate, take the necessary legislative action."

However, Court of Appeal President Mr. Justice Zacca recommended the combined allowance matter be referred back to the Police Tribunal.

He added: "Having held that the intention of the Tribunal was to answer the question in the affirmative, the Government may wish to consider whether it would be prepared to add the combined allowance to salary, making it salary.

"This would make it unnecessary to have the matter remitted for a rehearing."