NATIONAL LABOUR COMMISSION V. PERGAH TRANSPORT LIMITED

JUDGMENT

DEKYEM, J.

Applicant brings the instant motion pursuant to order 19 of the High Court (Civil  Procedure) Rules 2004 (CI47) and section 172 of the Labour Act,2003 (Act 651). The latter provision stipulates that: 

“Where any person fails or refuses to comply with a direction or an order  issued by the Commission under this Act the Commission shall make an  application to the High Court for an order to compel that person to comply  with the direction or order.” 



The facts per the affidavit in support indicate that, a complainant, Anthony  Kwame Can-Tamakloe lodged a complaint against Respondent regarding the termination of his employment contract with Respondent. Applicant heard the  petition and ruled in favour of the complainant as follows: 

1. The Respondent should pay Severance Award of three (3) months’ salary  for each year of service from the period of 10th October, 2010 to 18th September, 2013 or pro rata to the complainant. 

2. The Respondent should pay to the complainant two (2) months’ salary in  lieu of notice. 

3. Both payments should attract interest at prevailing commercial bank rate  from 18th September, 2013 to date of final payment. 

It is the case of Applicant that, Respondent failed to comply with its decision  hence the present application. Although Respondent was served the motion  paper and a subsequent hearing notice, Respondent did not file any affidavit in  opposition neither was it represented at the hearing of the motion. It is trite  learning that, where an action is called for trial and plaintiff attends and the  defendant fails to attend, the trial judge may allow the plaintiff to prove his or her  claim. This principle was enunciated in Republic v. Court of Appeal, Ex Parte Eastern Alloys Co. Ltd [2007-2008] 1 SCGLR 371; In re West Coast Dyeing Industry Limited; Adams v. Tandoh [1984-86] 2 GLR 561 CA; Watalah v. Ghana Primewood Products Ltd [1973] 2 GLR 126 and In Re Kumi (Decd); Kumi v. Nartey [2007-2008] SCGLR 623. The court is therefore, entitled to proceed to consider the application. The only exhibit attached to the motion is exhibit CT1, the Decision. 

The facts as gathered from exhibit CT1 are that, the employment contract of the  complainant was terminated as a result of an ongoing restructuring exercise whilst the latter was on leave. It was the case of the complainant that, he was denied the payment of severance award as stipulated by section 65(1) of the  Labour Act, 2003 (Act 651). Respondent asserted that, the complainant’s  employment was terminated as a result of an ongoing restructuring and also that,  complainant was given proper notice. Applicant settled two issues for  consideration which were (i) is the complainant entitled to the payment of  severance award? and (ii) is the complainant entitled to payment in lieu of  notice? 

In the light of the evidence placed before it, Applicant reasoned that, by a reading  of section 65(2) of Act 651, the complainant having had his employment  terminated as a result of a restructuring exercise, is entitled to redundancy pay. Section 65(2) of Act 651 provides that: 

“…….where an undertaking is closed down or undergoes an arrangement or  amalgamation and the close down, arrangement or amalgamation causes 

(a) severance of the legal relationship of worker and employer as it existed  immediately before the close down, arrangement or amalgamation; and

(b) as a result of and in addition to the severance that worker becomes  unemployed or suffers any diminution in the terms and conditions of  employment,

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, in this section referred to as "redundancy  pay".”

From the above, in order to be entitled to redundancy pay under section 65(2) of  Act 651, one has to prove that, the termination of his or her employment was as a  result of the undertaking having closed down or having undergone an arrangement or amalgamation. Section 229 of the Companies Code, 1963 (Act  179) define what arrangement and amalgamation mean in the following:  

(a) the expression "arrangement" means any change in the rights or  liabilities of members, debenture holders or creditors of a company or any  class thereof or in the Regulations of a company, other than a change  effected under any of the foregoing sections of this Code or by the  unanimous agreement of all the parties affected thereby; 

(b) the expression "amalgamation" means any merger of the undertakings  or any part of the undertakings of two or more companies or of the  undertakings or part of the undertakings of one or more companies and one  or more bodies corporate. 

The evidence placed before Applicant did not show that, Respondent had closed  down, or had undergone an arrangement or amalgamation as a result of which  the complainant’s employment was terminated. The stated reason for the  termination was that, same occurred due to a restructuring of Respondent company. The court therefore, fails to see how Applicant came to the conclusion  that, pursuant to section 65(2) of Act 651, the complainant was entitled to  redundancy pay. The Supreme Court made a pronouncement on this provision  when in Ashun v. Accra Brewery Limited Civil Appeal No J4/18/2007 12th November 2008, it held in respect of paragraphs 34 and 35 of the Labour  (Amendment) Decree 1969, NLCD 342 (now repealed by the Third Schedule of the  Labour Act, 2003 (Act 651)) which provisions are essentially the same as section  65 (2) (3) and (4) of Act 651 that “we do not interpret these provisions as casting  any duty of negotiation on the parties to this suit. These provisions do not, by  their very terms, apply to redundancy situations, but rather to when an organization is closing down or undergoing an arrangement or amalgamation and  these result in the termination of the employer-employee relationship.” In the  present application, there was no demonstration on the part of the complainant  or indeed a finding by Applicant that, the termination of the complainant’s  employment was as a result of Respondent having closed down, undergone an  arrangement or amalgamation to entitle the complainant to a redundancy pay.  The complainant was thus not entitled to redundancy pay. 

In respect of the notice given the complainant by the Respondent, Applicant  stated in exhibit CT1 thus: “On the question of payment in lieu of notice, it is  observed that the Complainant received notice while on his earned leave during which period he is entitled to pay.” Applicant reasoned that, notice given  complainant whilst on leave cannot replace the requirement to give him notice  thus he was entitled to be paid in lieu of notice. The issue for determination was  whether a notice to terminate the employment contract can be given when the  employee is on annual as in the instant case. The employment relationship is  governed by the express terms of the contract and implied terms derived from  statutes and regulations for the time being regulating employment. Section 17 of  Act 651 provides for notice of termination of employment thus: 

Section 17—Notice of Termination of Employment. 

(1) A contract of employment may be terminated at anytime by  either party giving to the other party,  

(a) in the case of a contract of three years or more, one month's  notice or one month's pay in lieu of notice;……….. 

From the above provision, the employment contract may be terminated at  anytime by giving the requisite notice or payment in lieu thereof and not both  There is no provision prohibiting the service of notice to terminate the  employment contract within an annual paid leave period of an employee and  neither does it appear to be supported by the employment contract between the  claimant and Respondent. In the Employee Handbook, exhibited before Applicant, Respondent reserved the right at its discretion to award pay in lieu of notice  whether such notice is given by the employee or the Respondent. The evidence  showed that, Respondent served notice during the annual leave of the claimant  without exercising its discretion to make payment in lieu of notice. The court  therefore, fails to see the basis upon which Applicant ruled that, the claimant was  entitled to pay in lieu of notice in addition to notice served to terminate the  employment contract for the only reason that, notice was served on the  complainant during his leave period when he would be receiving salaries and the  employment contract was in full force. 

It is trite, as espoused in Majolagbe v. Larbi [1959] GLR 190 that, where a party  makes an averment and his averment is denied, he is unlikely to be held by the  Court to have sufficiently proved that averment if he does not adduce that  corroborative evidence which if his averment be true is certain to exist. The onus  lay on the complainant to prove his claim, a burden he failed to discharge. The  complainant in the circumstances was not entitled to pay in lieu of notice in  addition to notice to terminate the employment relationship served on him whilst  he was still in the employ of the Respondent albeit on annual leave. In the light of  the above, the application is refused. No order as to costs.

SGD 

Justice Gifty Dekyem (Mrs) 

Justice of the High Court

Labour Division I, Accra

COUNSEL

K Danso-Acheampong ESQ for Applicant

Hon Kwadwo Owusu Agyeman for Respondent (Absent).