INDUSTRIAL AND COMMERCIAL WORKERS’ UNION OF THE TRADES UNION CONGRESS V. BANK OF GHANA

JUDGEMENT

CECELIA SOWAH J.

On 9 July 2003 the plaintiff instituted an action against the defendant. On the amended writ of summons and the statement of claim, the plaintiff’s claim is for:

(1). “A declaration that by the provisions of the Industrial Relations Act, 1965 (Act 299) the defendants are enjoined to negotiate any rationalisation package for the employees of the Bank of Ghana specified in their collective bargaining certificate issued to them by the registrar of trades union.(2). An order compelling the management of the Bank of Ghana, the defendant herein to, in consultation with the Industrial and Commercial Workers Union of the Trades Union Congress, convene the joint negotiation committee to negotiate the package for the members of the Bank of Ghana branch of the Industrial and Commercial Workers Union (ICU) of the Trades Union Congress (TUC), in respect of the rationalisation exercise about to be or being embarked upon by the Bank of Ghana.(3). An order of perpetual injunction to restrain the defendant by itself, its servants or agents or otherwise however from carrying out the impending rationalisation exercise unless and until they have convened a meeting of the joint negotiating committee of the Bank of Ghana to negotiate with the plaintiff-union the rationalisation package for the members of the Bank of Ghana (branch) of the Industrial and Commercial Workers Union of the Trades Union Congress.”

The essential facts of the case are not very much in dispute. They are as follows:

“The defendant-bank embarked on a restructuring exercise which they said they had divided into two phases. Phase one they said was an invitation for early voluntary retirement which was non-negotiable. They carried out this phase over the protests of the plaintiff that as the exercise would result in the loss of jobs it was mandatory to convene the standing joint negotiation committee to negotiate the severance package. According to the defendants phase two will be involuntary and thus negotiable with the plaintiff-union which holds the collective bargaining certificate on behalf of employees of the defendant-bank. There is a collective bargaining agreement in force between the plaintiff union and the bank pursuant to the Industrial Relations Act, 1965 (Act 299).”

Twelve issues were set down for trial comprising three issues filed by the plaintiff, namely:

(1). “whether or not the defendant is mandatorily required by law to negotiate with the plaintiff for the severance package payable by the defendant to the plaintiff’s members affected by the reorganisation of the defendant which will result in loss of jobs for such plaintiff’s members;(2). whether or not the law recognises what the defendant terms a ‘voluntary exercise of reorganisation’ resulting in loss of jobs for which the defendant is not required to negotiate the severance packages payable to the plaintiff’s members; and(3). whether or not the present action brought by the plaintiff is proper and maintainable in law.”

The nine additional issues filed by the defendant were:

(1). “whether or not the plaintiff has the authority and consent of all the members of the defendant’s local union to bring the instant action;(2). whether or not there has been any meeting of the defendant’s local union to discuss, authorise or indorse the institution of the instant action in respect of the voluntary retirement of the defendant’s employees;(3). whether or not a large number of the defendant’s employees have subscribed and accepted voluntary retirement;(4). whether or not the defendant convened a meeting of the standing joint negotiating committee on 25 September 2001;(5). whether or not the defendant subsequently wrote advising the plaintiff that the exercise was to be carried out in two phases;(6). whether or not the defendant provided the plaintiff with the criteria for the non-voluntary retirement;(7). whether or not it was recognised and understood by all that the decision of an early retirement was an individual decision to be taken by each employee of the defendant;(8). whether or not the plaintiff has demonstrated unco-operative attitude and gestures to the defendant in the carrying out of the exercise; and(9). whether or not this honourable court should take into consideration the interest wishes and desires of those who have opted for early voluntary retirement.”

In addition to these, the defendant raised the issue of the effect of the repeal of Act 299 at the addresses stage, which I propose to tackle as a preliminary issue along with additional issues one and two regarding the propriety of the plaintiff’s action.

Propriety of the plaintiffs action

Additional issues one and two, question whether there was a meeting of the plaintiff’s local union to discuss and indorse the institution of the present action and whether the plaintiff had the authority and consent of all members of the local union to bring this action. Counsel for the defendant submitted that as the guiding principles of state policy contained in chapter six of the Constitution, 1992 encourages the exercise of freedoms, the consent of the persons with interest in the case ought to be proved. Counsel contended that this was a voluntary consensual termination of contract in line with the new Labour Act, 2003 (Act 651), and that the plaintiff could not have had the consent of its members to bring this action if 400 of them applied for voluntary retirement despite the plaintiff’s advice.

Now, if the plaintiff had sued in a representative capacity he would have had to prove the right to sue in such capacity. However, as submitted by the plaintiff’s counsel, this was not a representative action which requires that capacity is acquired before the issue of the writ by the consent and authorisation of the persons for whom the plaintiff sues. Secondly, section 14 of the Trade Unions Ordinance, Cap 91(1951 Rev) provides as follows:

“14. Every registered trade union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal, with power to acquire and hold both moveable and immoveable property and to contract, and shall by the same name sue and be sued.”

The plaintiff as a registered trade union can properly bring this action in its own right as a legal person separate and distinct from the individuals who are members.

Repeal of Act 299, etc—Is the plaintiff’s action sustainable?

The basis of the plaintiff’s action was Act 299. The substance of the plaintiff’s claim was that the defendant had violated certain provisions of the Act. By the repeal of Act 299 and other labour legislation which the plaintiff was seeking to enforce, could the plaintiff’s action be sustained? What is the effect of the repeal, revocation or cesser of an enactment?

It was suggested by counsel for the defendant that the repealing Act, Act 651, came into operation on 31 March 2004 sweeping away the plaintiff’s action. Sections 8(1) and 9(c) of the Interpretation Act, 1960 (CA 4) provides:

“8. (1) The repeal or revocation of an enactment shall not—(a). revive anything not in force or existing at the time when the repeal or revocation takes effect; or(b). affect the previous operation of the enactment or anything duly done or suffered thereunder; or(c). affect any right, privilege, obligation or liability acquired, accrued or incurred thereunder; or(d). affect any penalty, forfeiture or punishment incurred in respect of any offence committed thereunder; or(e). affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment, and any such investigation; legal proceeding or remedy may be instituted; continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the enactment had not been repealed or revoked...9(c) Where an enactment is repealed or revoked and another enactment is substituted, by way of amendment, revision or consolidation—all proceedings taken under the repealed or revoked enactment shall be prosecuted and continued under and in conformity with the substituted enactment, so far as consistently may be.”

Counsel for the plaintiff, arguing that generally a repealed statute does not have retrospective effect, referred to S Y Bimpong-Buta’s book The Law of Interpretation in Ghana (Exposition and Critique) published 1995 in which the learned author examines the legal effect of an alteration of the law during the pendency of an action. At page 177, the learned author says:

“The effect of section 8(1)(c) of the Interpretation Act, 1960 is this: where any person has acquired any right or privilege or incurred any obligation or liability under an enactment, the subsequent repeal of that enactment shall not affect the continued enjoyment of that right privilege or the satisfaction of that obligation or liability under the repealed enactment.”

At page 185 of the same book the distinguished learned author states further:

“What is the legal effect on pending actions or proceedings of a change in the existing law? The relevant statutory provisions are sections 8(1)(c) and 9(c) of the Interpretation Act, 1960. As earlier stated, section 8(1)(e) provides that a right acquired or accrued under the repealed enactment shall not be affected by the repealing enactment. And section 9(c) provides that: ‘all proceedings taken under the repealed or revoked enactment shall be prosecuted or continued under and in conformity with the substituted enactment, so far as consistently may be.’ The combined effect of sections 8(1)(c) and 9(c) with regard to pending proceedings, may, in the light of the decided cases, be stated thus: ‘When the substantive law is altered by an enactment during the pendency of an action, the rights and obligations of the parties are to be decided in accordance with the law as it existed at the commencement of the action unless the enactment shows a clear intention to vary such rights. However where the new enactment affects alterations in the law as to practices and procedure of the courts, the provisions of the new enactment are to affect actions commenced before and after the commencement of the new enactment.’”

It was not argued for the defendant that Act 651 shows a clear intention to vary the substantive rights acquired by the plaintiff under the repealed Act. In any case, section 6 of Act 299 whose enforcement the plaintiff is seeking is retained by section 102 of Act 651.

Fenuku v. John Teye [2001-2002] SCGLR 985 cited by counsel for the defendant was also relied on by counsel for the plaintiff as emphasising the general rule that retrospective effect was not to be given to statutes. In that case, the Supreme Court held, as stated in the headnote, with respect to the retrospectivity of statutes, at holding (2) of the report thus:

“(2) The general rule was that statutes, other than those which were merely declaratory, or which related only to matters of procedure or of evidence, were prima facie prospective; and retrospective effect was not to be given to them unless by express words or necessary implication, it appeared that, that was the intention of the legislature. In general, the courts would regard as retrospective any statute which operated on cases or facts com-ing into existence before its commencement in the sense that it affected, even if for future only, the character or consequences of transactions previously entered into or of other past conduct. Thus a statute was not retrospective merely because it affected existing rights nor was it retrospective merely because part of the requisites for its action was drawn from a time antecedent to its passing. Master Ladies Tailors Organisation v. Minister of Labour and National Service [1950] 2 All ER 525 cited.”

The final determinant of whether the plaintiff’s action is maintainable is article 107(b) of the Constitution, 1992 which provides:

“107. Parliament shall have no power to pass any law—(b) which operates retrospectively to impose any limitations on or to adversely affect the personal rights and liberties of any person or to impose a burden, obligation or liability on any person except in the case of a law enacted under articles 178 to 182 of this Constitution.”

Act 651 was not enacted under articles 178 to 182 of the Constitution, 1992 which deal with finances and public funds. It thus seems clear to me that the rights of the plaintiff and the obligations of the parties as existed under Act 299 are not affected by the subsequent repeal of that enactment, and the plaintiff’s action is maintainable.

With due respect to counsel for the defendant, as there are clear statutory provisions, I do not regard the references made to English cases in his address to be relevant. This suit is clearly determinable under the labour law legislation of Ghana. At best, the cited cases will be of persuasive effect only.

I shall now proceed to consider the main issues in dispute. In my opinion, of the many issues set down for trial, the relevant issues which arose on the pleadings and evidence for determination were the following questions:

(1). Was the exercise the defendant bank embarked on a redundancy exercise within the meaning of NLCD 342 and the collective bargaining agreement?

(2). Whether or not the law recognises what the defendant terms a “voluntary exercise of reorganisation” resulting in the loss of jobs.

(3). Whether or not the defendant is mandatorily required by law to negotiate with the plaintiff for the severance package payable to the plaintiff’s members affected by the reorganisation resulting in loss of jobs—irrespective of whether the severance of the employer and employee relation was voluntary or involuntary.

Rationalisation and redundancy

Was the exercise the defendant embarked upon a redundancy exercise and so caught within the labour laws? In its writ of summons and statement of claim, the plaintiff described the exercise as a “rationalisation package.” The defendant took up issue with the plaintiff for the change in description in their summons for directions to “severance package” and “reorganisation.” The defendant’s representative and the first defendant witness were very careful to refer to the exercise variously as “voluntary exit”, “voluntary disengagement”, “re-shaping” and “re-organisation.” Much time was spent during cross-examination of the defendant’s witnesses on this issue. The witnesses stoutly denied suggestions by counsel for the plaintiff that the exercise was a redundancy or a restructuring.

From the submissions of learned counsel for the defendant, it is evident why the defendant so fiercely resisted the description of the exercisers a redundancy. The position of the defendant was that the exercise was a voluntary consensual termination of contract. Counsel submitted that under the laws of Ghana, the relationship between an employer and an employee is not governed exclusively by statutory law but also by the common law. This he said, was by virtue of article 11(1) of the Constitution, 1992. The defence of the defendant to this action was therefore to the common law rules on employer and employee relationships and the principles of the rights and duties of parties in a contract of service determinable by mutual consent. I can therefore understand why the defendant would be under an apprehension to admit that the exercise was a redundancy, as a redundancy connotes a unilateral decision by the employer to terminate and could raise the issue of unfair dismissal and a claim for statutory redundancy payment.

The word redundant or redundancy is not defined in any of the interpretation sections, and I am not certain that it has a technical meaning in labour law. I understand it ordinarily to mean superfluous, surplus, no longer needed, unwanted. It was admitted by the defendant that it wanted to shed one thousand jobs and focus on its core business and therefore gave an opportunity to staff who desired to opt for early voluntary retirement.

There was no dispute as to the existence of a collective bargaining agreement (exhibit A) in force between the plaintiff union and the defendant bank. Article 18 of the collective bargaining agreement is on termination of service. Terminations, according to the collective bargaining agreement, comprise, inter alia, employees whose services are dispensed with or are called upon to resign from the service other than through summary dismissal, voluntary resignations and redundancy. Each kind of termination has its own terms and conditions. For example, an employee called upon to resign is entitled to one month’s prior notice or a month’s salary in lieu of notice. An employee made redundant is entitled under article 30 of the collective bargaining agreement to a redundancy award which shall be determined as provided by NLCD 342. Howsoever it is described is not as important as the result of it. The test should be whether or not it results in the severance of the employer and employee relationship. In section 34(1) of NLCD 342, one of the words used to describe the severance of the employer and employee relation was “arrangement.” The primary purpose of the exercise embarked on by the defendant was to drop or lay off excess staff. The package offered by the defendant was an incentive to get employees to voluntarily offer to sever the employer and employee relationship. Whether or not the defendant was entitled to do this I will tackle next. The important point is that it severed the employer and employee relationship with some of the plaintiff’s members. It was a termination and subject to the payment of a redundancy or a severance award.

Voluntary reorganisation?

Does the law recognise a voluntary exercise of reorganisation or redundancy resulting in the loss of jobs? Counsel for the defendant in his submissions on this point made references to several textbooks which I have found very helpful in deciding that the law does recognise an exercise of a voluntary nature. In John McMullens’ book, Redundancy: The Law and Practice (2001 ed), the author puts it thus:

“In a redundancy situation, it is common for an employer to seek volunteers for redundancy in order to avoid having to make compulsory redundancies. The question then arises as to whether those employees who agree to be made redundant are still classified as dismissed for the purposes of the statutory redundancy scheme, or whether they have agreed a termination by consent and are excluded.”

I do not think that the plaintiff is challenging the defendant’s right as an employer to reorganise its business. Although the plaintiff challenged the defendant on the mutuality of the agreement to terminate and suggested that the employees were pressured to leave through veiled threats that they could get a worse deal in an involuntary exercise, no claim of wrongful dismissal was made. If the termination was not a wrongful dismissal then it was either termination under one of the stated reasons in article 18 of the collective bargaining agreement or a mutually agreed termination. As the plaintiff was denying mutual termination, the burden of proof lay with the plaintiff-employee to show otherwise: see Halsbury’s Laws of England (4th ed 2000 Reissue), paras 434 and 436, which the plaintiff failed to do.

An employer’s obligation in situations of termination is to do so within any existing agreement with its employees. The evidence led by the defendant demonstrated that the employees had been generously compensated by the severance package over and above what they would ordinarily have received. The second plaintiff witness, a motor vehicle electrician having worked eighteen years with the defendant took home ¢144 million, The third plaintiff witness, a messenger for 30 years took home ¢ 254 million. But that is not the material point. Generous package or not, voluntary or involuntary decision by the employees, the question is—Was the defendant mandatorily required by the labour laws to negotiate the severance package payable to its employees with the plaintiff? This was the primary contention of the plaintiff.

Mandatory to negotiate?

The plaintiff’s case is that it holds a collective bargaining certificate covering some class of workers of the defendant bank. That pursuant to the power conferred on it by statute—Act 299, particularly sections 5 and 6, it negotiated a collective bargaining agreement (exhibit A) to govern the conditions of employment of its members with the defendant bank. However, when the defendant was about to embark on an exercise, the net effect of which was to result in loss of jobs to some of its members, it requested the defendant to convene the standing negotiation joint committee. The plaintiff contended that by article 30 of the collective bargaining agreement and the provisions of Act 299, especially section 6(1) thereof, it is the two parties that have to negotiate any package payable to members to be affected by the exercise. The two provisions provide as follows: Article 30 of the CBA states: “Redundancy Awards shall be determined as provided by NLCD 342 of 1969.” Section 6(1) and (2) of Act 299 states:

“6. (1) Negotiations of all matters connected with the employment or non-employment or with the terms of employment or with the conditions of labour of any of the employees of the class specified in a certificate issued under section 3 shall be conducted through the standing negotiating committee set up under section 5.(2) Either party represented on the said committee may give notice to the other party requiring them to enter into negotiations on any matters which may properly be dealt with by the committee and it shall be the duty of both parties to make every reasonable effort to come to an agreement on the matters to which the notice relates.”

It is also pertinent to note sections 10(2) and 10(4) of Act 299 which give statutory recognition to collective bargaining agreement as contracts between the employer and the employee with the rights conferred on the employee not subject to waiver even by the employee himself. Section 10(2) of Act 299 provides:

“(2) The provisions of a collective agreement under this Act concerning terms of employment and termination of employment, and personal obligations imposed on, and rights granted to, an employee or employer shall be regarded as terms of a contract of employment between each employee to whom the provision applies and his employer.”

From the sections referred to above, the legal position is as submitted by counsel for the plaintiff—Where an employee is covered by a collective agreement, any terms of the employment of that employee must be in accordance with the provisions of that collective agreement. Happily, there is a local Court of Appeal decision which pronounced on these provisions. Whilst counsel for the plaintiff urges reliance on it, counsel for the defendants contends that the VALCO case is distinguishable from the instant case because this case is neither a redundancy situation nor was it a collective negotiation.

In Nartey-Tokoli v. Volta Aluminium Co Ltd [1987-88] 2 GLR 532, CA the Volta Aluminium Co Ltd and the Industrial and Commercial Workers Union were the only parties to a collective agreement. During a power crisis, the Volta Aluminium Co Ltd had to cut down staff. It negotiated a leave of absence/recall agreement (LOA) with the local union and the Workers’ Defence Committee (WDC) which was intended as a substitute for the collective agreement. The ICU had not delegated its power to negotiate to the local union, and the loan agreement entered into with the local union breached the collective agreement. On these facts, the Court of Appeal held that the local union and the WDC lacked capacity to act for the employees. The LOA was not valid as it was in breach of the collective bargaining agreement (CBA). The CBA provided for declaration of redundancy and Volta Aluminium Co Ltd should have complied with the provisions of the CBA but rather terminated under the LOA agreement which was not enforceable against the workers. It was further held that the LOA could not waive the workers’ rights under the CBA and section 10(4) of Act 299.

As already indicated, I have found as a fact in the instant case, that it was a redundancy situation. The issue then is whether the CBA in this case makes provision for terminations, redundancies and payment of severance awards. If yes, then how does the agreement provide for calculation of the severance award? By section 10(2) of Act 299 and the decision in the Volta Aluminium Co Ltd case (supra), the parties are bound by the provisions of the CBA concerning termination of employment and redundancy. The provision in the CBA concerning redundancy is article 30 which provides that redundancy awards shall be determined by NLCD 342. The relevant provisions of NLCD 342 referred to in article 30 of the CBA exhibit A are as follows:

“34. (1) Where an organisation is closed down or where an organisation undergoes an arrangement or amalgamation and the close down, arrangement or amalgamation causes a severance of the legal relationship of employee and employer between any person and the organisation as it existed immediately before the close down, arrangement or amalgamation, then, if as a result of and in addition to such severance that person becomes unemployed or suffers any diminution in his terms of conditions of employment, he shall be entitled to be paid by the organisation in whose employment he was immediately prior to the close down, arrangement or amalgamation, compensation, in this Decree referred to as ‘severance pay.’35. The amount of any severance pay to be paid under paragraph 34 of this Decree as well as the terms under which payment is to be made shall be matters for negotiation between the employer or his representative and the employee or his representative.”

(The emphasis is mine.)

The plaintiff’s contention that under article 30 of the CBA it is mandatory for the defendant to negotiate with it is clearly erroneous because, section 35 of NLCD 342 which is to be applied under article 30 of the CBA gives the employee capacity to either negotiate by himself or through his representative. Negotiations of severance awards can therefore be either by the standing negotiation committee which is the representatives of the employers and the workers or by individual negotiation as permitted by section 35 of NLCD 342.

I have considered the apparent contradiction of section 35 of NLCD 342 and section 6(1) of Act 299 and concluded that there is no contradiction. NLCD 342 is later in time, and section 35 thereof is a specific expression which must have taken into consideration the general proposition and scope of section 6 of Act 299. I accordingly find that the defendant did not breach the provisions of the CBA in negotiating directly with its employees. The main distinction between the Volta Aluminium Co Ltd case (supra) and this is that in theVolta Aluminium Co Ltd case (supra), the employer failed to apply the provisions in the CBA governing terminations and rather sought to vary the existing agreement. The Volta Aluminium Co Ltd agreement fell outside their CBA whilst in the instant case it does not. Moreover, on a careful reading of section 6(1) of Act 299, that section appears to me to concern negotiations for a CBA. Once the standing joint negotiation committee concluded its work and a CBA was signed and in force, its terms and conditions would apply to any matter governed by it, and the standing joint negotiating committee could not be called to negotiate on any such matter governed by the CBA except in compliance with the procedure set out in section 11(3) of Act 299 where the agreement is due for renegotiation.

Where there is a subsisting valid CBA, as in this case, any notice requiring a party to negotiate is invalid unless it complies with the provision of section 11(3) of Act 299. The section provides as follows:

“(3) Neither party to a collective agreement under this Act shall give notice under section 6 of this Act requiring the other party to negotiate with respect to any matter governed by a collective agreement under this Act unless, at the time when the notice is served, that agreement is due, either in consequence of the giving of a notice under this section or otherwise, to expire not more than twenty-eight days after the service of the notice.”

No assertion was made by the plaintiff that the agreement was due to expire and in consequence there was the need to convene a meeting of the standing joint negotiation committee. I thus find that the plaintiff’s letter to the defendant, exhibit C, calling for the convening of the standing joint committee to negotiate the rationalisation package under section 6(1) of Act 299 to be invalid. By the same reasoning, the plaintiff is not entitled to relief one and two indorsed on the writ of summons.

It is evident from the reliefs indorsed on the writ of summons that the real dispute is the quantum of severance award or “rationalisation package” payable to the plaintiff’s members. Even assuming that the plaintiff had made out its case, a settled principle of equity is that an injunction will not be granted where money will be an adequate compensation. In the light of all of the above, I find that the plaintiff is not entitled to the reliefs it seeks. I accordingly dismiss the whole of the plaintiff’s claim. I award costs of ¢15 million against the plaintiff.

COUNSEL

ALBERT ADAARE FOR THE PLAINTIFF

NUTIFAFA KUENYEHIA FOR THE DEFENDANT.