According to Wikipedia, it's all to do with royalty. Jack's not doing an RAF salute, which is very interesting considering how RAF themed he is. An RAF officer returns a salute on behalf of the queen, and Jack shouldn't salute unless he has his cap or hat on. Wikipedia also tells me that only the British Navy uses the palm down salute, because whilst the other branches offer an open palm showing honesty and loyalty, sailors had dirty hands and it was considered the height of bad manners to show your dirty hand to someone.