ICU V. WORLD COOL MANUFACTURING LTD

JUDGMENT 

OWUSU, J.

The Plaintiffs issued a Writ of Summons at the Registry of this Court claiming the  following reliefs: 

i.A declaration that the failure and or refusal by the Defendant to negotiate and  agree with the Plaintiffs their redundancy package and other entitlements and  or pay same to them upon the said Plaintiffs being declared redundant is in  breach of Section 65 of the Labour Act, 2003, Act 651 and Article 11 of the  Collective Bargaining Agreement applicable to the parties at the material  time. 

ii. A declaration that the failure or refusal to pay the Plaintiffs their redundancy  entitlements or end of service benefits and other allowances is wrongful. 

iii. A declaration that the failure or refusal to pay the Plaintiffs their salaries  which had fallen into arrears since October, 2010 is wrongful. 

iv. An order for the payment of all outstanding redundancy payments to the  Plaintiffs. 

v. An order for the payment forthwith of the Plaintiffs’ arrears of salaries and  any other entitlements found due.

vi. Interest on (iv) and (v), respectively, from their dates of accrual up to the date  of final payment at the current bank lending rate up to the date of final  payment. 

vii. Damages for breach of Plaintiffs’ conditions of service.

viii. Damages for fraud. 

ix. An order that the Defendant shall forthwith pay to the Plaintiffs concerned  the terminal benefits lawfully due to those Plaintiffs who had formally  resigned from the service of the Defendant before the declaration of  redundancy together with appropriate interest thereon. 

x. An order that Defendant shall pay to the Social Security and National  Insurance Trust (SSNIT) all statutory contributions and or deductions of  Plaintiffs together with appropriate interest. 

xi. Any other relief found due. 



According to the 2nd to 62nd Plaintiffs they were employees of the Defendant company  known as World Cool Manufacturing Limited but over the years changed its name and  variously known as Jolly World Cool Limited and Jolly Paper Products Limited. The  1st Plaintiff, the Industrial and Commercial Workers Union (ICU), is the Trade Union of  which Plaintiffs were affiliated and they are entitled to undertake all agreements and protect  the interest of the employees in their industrial relationship with the Defendant as  employer. 

Plaintiffs averred that Defendant compelled some of them to proceed on leave without pay,  without prior notice and without assigning any justifiable reason and that since they have  not been recalled it amounts to summarily termination without explanation. Defendant failed to enter appearance and again failed to file its defence. On the 10th of July  2015 this court differently constituted entered interlocutory judgment in favour of the  Plaintiffs. An interlocutory judgment entered does not determine the rights of the parties.  It is only interim or temporary, not constituting a final resolution of the whole controversy.  I refer to REPUBLIC v. HIGH COURT (FTD), KUMASI and ATTORNEY GENERAL; EXPARTE CHARLES OWUSU ANSAH [2014] 70 GMJ 1. Plaintiffs  were called upon to prove their claims. 

In court 24th Plaintiff testified on his behalf and that of the other Plaintiffs. He told the court  that 2nd to 47th Plaintiffs were asked to go home but never recalled. According to him in  2013, the proprietors of the Defendant Company suddenly sold the Defendant as a going concern to new proprietors and declared the Plaintiffs redundant. This Plaintiffs claim  happened without any prior notice and or negotiations between them as employees and  Defendant as an employer in respect of their redundancy package. In respect of the 48th to  62nd Plaintiffs they resigned voluntarily but were not paid their terminal benefits. Again  Plaintiffs claim that the Defendant without any consultation with the Plaintiffs and or their  union have failed to pay their salaries in arrears and their allowances to which they were  lawfully entitled for 19 months from October 2010 to December 2012. 

In court the witness tendered in evidence EXHIBITS A and B, internal memos from the  1st Plaintiff and also EXHIBIT C, a letter from the 1st Plaintiff in respect of computation  done based on the Collective Agreement existing at the time. These exhibits indicate that  some of the Plaintiffs are entitled to salary arrears for 19 months from October 2010 to  December 2012 totaling an amount of GH₵ 117,401.46 due the Plaintiffs. 

Where a contract of employment is terminated by the employer Section 18 of the  LABOUR ACT 2003 [ACT 651] requires the employer to pay to the employee certain  entitlements and these include any remuneration earned by the worker before the  termination and any deferred pay due to the worker before the termination. Sections 18(2)  and 18(3) provides that an employer is expected to pay all remuneration due the employee  not later than the date of expiration of the notice of termination and where for any lawful  reason no notice is given the payment of all remuneration due is expected to be made by  the employer not later than the next working day after the termination. 

At common law the employer wishing to terminate the contract of employment has to give  a reasonable notice to the employee. I refer to the case of McClelland v. Northern Ireland  Health Services Board. [1957] 2 All ER 129 HL cited in the book LABOUR LAW by  JAMES ODARTEY MILLS.  

In the Plaintiffs Statement of Claim they averred that Defendant was in the habit of  engaging employees of which 2nd to 62nd Plaintiffs were part without ever issuing them  with appropriate contracts of appointment even though it dealt with them as permanent  staff. Where no specific periods are expressed a reasonable period of notice is implied based on a number of factors including custom and practice. I refer to Masiak v. City  Restaurants (UK) Limited [1999] IRLR 780. Under Section 17 of Act 651, in the  absence of any express notice period an employer may terminate the contract of  employment by giving one month’s notice or one month’s pay in lieu of notice, two weeks’  notice or two weeks’ pay in lieu of notice or seven days’ notice or seven days’ pay in lieu  of notice depending on the type of contract. 

There is proof that Plaintiffs were being paid monthly as such are covered by the Labour  Act. Per the same Exhibits, Plaintiffs are entitled to redundancy benefits amounting to GH  ₵143,975.08. EXHIBIT F is from the 1st Plaintiff to the Managing Director of World Cool  Manufacturing Limited informing him that as a result of change of ownership at the  Defendant Company the workers are entitled to Redundancy Pay in accordance with  Section 65 of Act 651. Redundancy is concerned with shedding off excess staff. Under  Section 65 (2) of the same Act where an undertaking is closed down or undergoes an  arrangement or amalgamation and causes the employee to become unemployed the worker  is entitled to be paid by the undertaking at which that worker was immediately employed  prior to the close down, arrangement or amalgamation, compensation which is referred  to as the redundancy package. To my understanding therefore although World Cool  Manufacturing Limited has been sold, they are liable and entitled to pay the Plaintiffs. 

The amount of redundancy to be paid and the terms and conditions of payment are subject  to negotiation between the employer or its representative and the worker or trade union  concerned. Any dispute that concerns the redundancy pay may also be referred to the  Labour Commission by an aggrieved party for settlement and the decision of the  Commission shall be final. I refer to Section 65(3) and (4) of the Act. EXHIBITS F and  K go to buttress the fact that attempts were made by the 1st Plaintiff to get parties to  negotiate the redundancy package. According to the Plaintiffs they tried to engage the  Defendant to resolve all their issues surrounding the redundancy pay, terminal benefits and  salary arrears of the Plaintiffs, all to no avail and this contravenes the Labour Act. 

Again Exhibit L Series goes to buttress Plaintiffs assertion that they made SNNIT  contributions. Based on the afore-stated and based on and the fact that a Defendant who  defaults in entering appearance is deemed to admit the claim endorsed on the writ the court  hereby enters final judgment in favour of Plaintiffs and hereby declare that:

1. The failure and or refusal by the Defendant to negotiate and agree with the Plaintiffs  their redundancy package and other entitlements and or pay same to them upon the  said Plaintiffs being declared redundant is in breach of Section 65 of the Labour  Act, 2003, Act 651 and Article 11 of the Collective Bargaining Agreement  applicable to the parties at the material time. 

2. The failure or refusal to pay the Plaintiffs their redundancy entitlements or end of  service benefits and other allowances is wrongful. 

3. The failure or refusal to pay the Plaintiffs their salaries which had fallen into arrears  since October, 2010 is wrongful.  

The court herby orders:  

4. The payment of all outstanding redundancy payments totaling GH₵143,975.08 to  the Plaintiffs. 

5. The payment forthwith of the Plaintiffs’ arrears of salaries amounting to  GH₵117,401.46 and any other entitlements found due. 

6. The payment of interest on (4) and (5), respectively, at the current bank lending rate,  from December 2012 to the date of final payment. 

7. Defendant is hereby ordered to pay as general damages for breach of Plaintiffs’  conditions of service an amount of GH₵ 1,000.00 for each of such Plaintiff.

8. Plaintiffs are again seeking damages for fraud. In S.A. TURQUI and BROS. V. DAHABIEH [1987-88] 2 GLR 486, it was held that:  

“…………a charge of fraud in law can be taken to be properly made against a  party who knowingly or recklessly whether by conduct or words uses unfair, wrongful or unlawful means to obtain a material advantage to the detriment of  another party………”. 

In law, it involves a false representation. In the case of DERRY v. PEEK (1889) 14 APP.  CAS 337 at 374 the court per Lord Herschell defined fraud thus: 

“Fraud is proved when it is shown that a false representation has been made: (1)  knowingly, (2) without belief in its truth or (3) recklessly, careless whether it be true or  false. To prevent a false statement being fraudulent, there must I think, always to be, an  honest belief in truth and this probably covers the whole ground, for one who knowingly  alleges that which is false has obviously no such honest belief”.

Fraud must not only be specifically pleaded and particulars of same given but it must also  be specifically proven. In the case of BAIN TACKEY v. MC [1912] AC 186 PC the Court  held that an intention to deceive is a necessary element of fraud. The Defendant has been  fraudulent in its dealings with the employees. The court again orders that an amount of  GH₵1,000.00 be paid to each Plaintiff as damages for fraud. 

The court further orders:  

9. That the Defendant shall forthwith pay to the 48th to 62nd Plaintiffs who had formally resigned from the service of the  Defendant before the declaration of redundancy, all their terminal benefits  lawfully due them, together with interest at the current bank lending rate,  from when it became due to the date of final payment. 

10. That the Defendant shall pay to the Social Security and National Insurance  Trust (SSNIT) all statutory contributions and or deductions of Plaintiffs. Cost of GH₵ 500.00 awarded in favour of each Plaintiff. 

(SGD) 

JUSTICE LAURENDA OWUSU,  

JUSTICE OF THE HIGH COURT

COUNSEL

VICTOR HACKMAN FOR DICK ANYADI FOR THE PLAINTIFFS