EDMUND DIAMOND ADDO V. DONEWELL LIFE COMPANY LTD

JUDGMENT

DEKYEM, J.

Plaintiff was an employee of Defendant, the latter being an insurance company registered under the laws of Ghana. By letter dated 27th April, 2011, Plaintiff served notice on Defendant to resign effective 30th June, 2011. Due to exigencies at Defendant’s, the latter impressed upon Plaintiff to remain and take up the position of General Manager and be the Acting Chief Executive whereupon, Plaintiff withdrew his resignation by letter dated 30th June, 2011 and accepted the offer. The parties executed a new employment contract dated 1st July, 2011 for afixed term of three years unless terminated by either party by giving a written three months notice or by the Defendant for stated cause. 

During the tenure of the employment contract, Defendant undertook restructuring exercise which abolished the position of General Manager and also an exercise to recruit a substantive Chief Executive. Plaintiff applied to be considered for the position of Chief Executive but was unsuccessful. Thus by letter dated 12th November, 2013, Defendant notified Plaintiff that, due to the new organisational structure which abolished his position of General Manager and his unsuccessful attempt to secure the position of Chief Executive, his employment contract is terminated upon payment of three months’ salary in lieu of notice. Plaintiff was per the same letter offered an exit package made up of:- three months salary (net) as a golden handshake for holding the fort for the period he acted as Acting Chief Executive; his official car was to be valued and offered for sale to him at 25% of the quoted value; staff group pension balance and outstanding leave to be converted into cash. Defendant was to offset any indebtedness of Plaintiff against the payments to be made to him. 

It is the case of Defendant that, Plaintiff did not accept the exit package offered so it withdrew same and in accordance with the employment contract, terminated Plaintiff’s employment contract by presenting a cheque covering three months salary in lieu of notice. It is Plaintiff’s case that, the termination is inconsistent with the employment contract in that the termination was not for one of the stated causes in the contract and neither did Defendant reserve the right to pay money in lieu of the written three months notice stipulated in the contract. Plaintiff thus claimed the following:

a. A declaration that the termination of his appointment as General Manager of the Defendant’s company was wrongful for being inconsistent with his contract of employment. 

b. An order to recover all accrued remuneration including allowances if any from the date of the purported termination i.e. 15th November 2013 up to the date this Honourable Court will deliver its judgment. 

c. Interest on the accrued remuneration at the prevailing commercial bank average interest rate effective the date of the purported termination of Plaintiff’s contract of employment till date of final payment. 

d. General damages for the wrongful termination of the Plaintiff’s contract of employment. 

e. Costs.  

At directions stage, the following issues were settled for trial: 

i. Whether or not Defendant breached the employment contract in terminating Plaintiff’s employment? 

ii. Whether or not the termination of Plaintiff’s employment was lawful? 

iii. Whether or not Plaintiff is entitled to his claim? 

The burden of proof in civil actions such as the instant one, are set out clearly in the relevant provisions of the Evidence Decree, 1975 (NRCD 323) as follows: 

Section 10—Burden of Persuasion Defined.

(1) For the purposes of this Decree, the burden of persuasion means the obligation of a party to establish a requisite degree of belief concerning a fact in the mind of the tribunal of fact or the court. 

(2) The burden of persuasion may require a party to raise a reasonable doubt concerning the existence or non-existence of a fact or that he establish the existence or non-existence of a fact by a preponderance of the probabilities or by proof beyond a reasonable doubt. 

Section 11—Burden of Producing Evidence Defined. 

(1) For the purposes of this Decree, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling against him on the issue. 

(4) In other circumstances the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact was more probable than its non-existence. 

Section 12—Proof by a Preponderance of the Probabilities.

(1) Except as otherwise provided by law, the burden of persuasion requires proof by a preponderance of the probabilities. 

(2) "Preponderance of the probabilities" means that degree of certainty of belief in the mind of the tribunal of fact or the court by which it is convinced that the existence of a fact is more probable than its non existence. 

Section 14—Allocation of Burden of Persuasion. 

Except as otherwise provided by law, unless and until it is shifted a party has the burden of persuasion as to each fact the existence or non-existence of which is essential to the claim or defence he is asserting. 

Section 17—Allocation of Burden of Producing Evidence. 

(1) Except as otherwise provided by law, the burden of producing evidence of a particular fact is on the party against whom a finding on that fact would be required in the absence of further proof. 

(2) Except as otherwise provided by law, the burden of producing evidence of a particular fact is initially on the party with the burden of persuasion as to that fact. 

The Supreme Court held in Takoradi Flour Mills v. Samir Faris [2005-2006] SCGLR 882 -885 holding 4 that, “Since it was the plaintiff…..who made a claim ….., he had to adduce evidence sufficient to establish a prima facie case…” The onus is thus on Plaintiff in accordance with the rules of evidence to produce sufficient evidence to make out his claim on a preponderance of probabilities as defined in section 12(2) of NRCD 323. Plaintiff’s main bone of contention is found in the following paragraphs of his witness statement: 

13. The executed contract of employment being EXHIBIT “1” stipulated that the Board may terminate my contract for a cause and paragraph (g) expressly provided the six causes upon any of which my employment could be terminated.

14. The Defendant in its letter dated 12th November 2013 being EXHIBIT “F” herein indicated that the new organizational structure for the Defendant had abolished the General Manager position I occupied thus leading to the termination of my employment even though abolishing my position as the General Manager as a cause of terminating my employment is not part of the express causes of termination under Paragraph (g) of EXHIBIT “E1” herein and thus rendering the termination of my employment a breach of EXHIBIT “D1”. 

16.From the above named causes I am advised and verily believe same to be true that the Defendant could have terminated my employment within the three years during only if I was involved in any of the express six causes in EXHIBIT “E1’. 

17. The Defendant per EXHIBIT “F” as advised by my Counsel terminated my employment simpliciter without stating a cause and paying three months’ salary to me in lieu of notice which I am further advised the Defendant did not expressly reserved in itself that right. 

19. I am advised by Counsel and verily believe same to be true that per Paragraph (f) EXHIBIT “E1” the Defendant was mandatorily required to service a written three months advance notice on me before terminating my appointment and that the Defendant in the said paragraph (f) did not reserved the right in itself to pay three months proper notice of termination salary to me in lieu of a written three months advance notice as stipulated in paragraph “F” herein and that my employment could not be terminated simpliciter by paying in lieu of three months’ notice without basing it on any of the six causes listed under paragraph (g) of EXHIBIT “E1” or waiting till the expiration of the proper three months’ notice given in advance. 

The issues that that fall for determination from Plaintiff’s assertions above quoted echoing his contentions in the statement of claim are whether or not Defendant can terminate Plaintiff’s employment simpliciter and whether Defendant can terminate Plaintiff’s employment by payment in lieu of notice instead of the stipulated three months written notice in the employment contract. Exhibit E1 is the employment contract and it provides on termination of the contract as follows: 

Clause 1, WHEREAS 

∙ The Company has employed the Edmund Diamond Addo as the General Manager (“The GM”) and the GM has accepted such employment on the terms and under the conditions recited below commencing on 1st day of July, 2011 until either Party shall give proper notice of termination of this employment Contract to the other; and (emphasis added) 

∙ The Parties intend to be legally bound. 

Clause 2 (f) TERMINATION OF CONTRACT 

Any party wishing to give notice of termination of this contract, or any intention not to renew at the end of the contract period, shall give the other Party a written three months’ notice. 

Clause 2 (g) TERMINATION FOR CAUSE 

The Board may terminate this contract at any time “for cause” 

Commission of any of the following acts by the General Manager constitute grounds for the Board to terminate “for cause”. 

∙ The General Manager is charged with a felony crime; 

∙ The General Manager commits a crime of moral turpitude such as an act of fraud or other crime involving dishonesty; 

∙ The General Manager fails to perform his duties in a competent manner; 

∙ The General Manager violates his duties of confidentiality and/or non-competition under this agreement; 

∙ The General Manager fails to comply with directives from the Company’s Board of Directors; 

∙ The General Manager commits any act or acts that harm the Company’s reputation, standing, or credibility within the community it operates or with its customers or suppliers…… 

The “notice period” contained in this contract does not apply to termination for cause except that the Board must give actual notice to the General Manager of termination for cause. 

The Board may make termination for cause effective immediately.” 

It was held in Boateng v. Volta Aluminium Company Limited [1984-86] 1 GLR 733- 740 CA which was affirmed by the Supreme Court in Oheneba Bediako Essuman v. Church of Pentecost J4/21/2016 28th July, 2016 that “in attempting to construe the termination provisions, regard should be had to all the four clauses, ie the language used and all the provisions in the termination clauses should be looked at as a whole and every clause must be compared with the other and one entire sense made out of them. It was only by so doing that the true meaning and the intention of the parties could be discovered.” It is observed that, there were two types of termination of the employment contract; termination by either party was upon notice whereas termination for cause was without notice. The instances giving rise to termination of the employment contract for cause borders on misconduct and competency whereas termination of the employment contract on notice was without stated cause. It is the court’s view then that, Plaintiff’s employment contract having been terminated on notice meant that, Defendant did not intend to terminate the employment contract for any of the stated causes under clause 2(g) of exhibit E1. 

Clause 2(f) provided that, either party to the employment contract could terminate same by giving three months’ written notice. In the instant case, Defendant instead of giving the three months’ written notice to Plaintiff whilst the latter works during the notice period chose to make payment in lieu of notice. The question to answer is, would this suffice in the face of a contractual term requiring a written notice? There will usually be no liability on the part of the employer where in the absence of payment in lieu of notice provision in the employment contract, the employee accepts the payment thereby waiving the requirement for notice. Where on the other hand, the employee whilst taking the payment in lieu of notice, does not accept the payment as waiving his or her right to notice, the employer is in breach of the contract and technically the employee could claim unlawful termination of employment. The position however is different in the Ghanaian law. Section 17 of the Labour Act, 2003 (Act 651) requires that a contract of employment may be terminated at anytime by either party by giving requisite notice or payment in lieu thereof. Further, section 18(4) of Act 651 provides that, either party to a contract of employment may terminate the contract without notice if that party pays to the other party a sum equal to the amount of remuneration which would have accrued to the worker during the period of the notice. Where the employment contract appears to be inconsistent with provisions of statutes for the time being regulating employment, to the detriment of the employee, the statutory provisions prevail. The evidence placed before the court show that, an amount representing three months’ salaries was paid to Plaintiff in lieu of notice. Thus in the circumstances, Defendant did not breach the employment contract as statutory provisions are implied terms of the employment contract. 

In the circumstances, is Plaintiff entitled to his claim? Plaintiff is seeking a declaration that the termination of his appointment as General Manager of Defendant’s company was unlawful for being inconsistent with his employment contract. The court has not found in Plaintiff’s favour in this regard. Plaintiff is seeking to recover accrued remuneration from date of termination of his employment contract being 15th November, 2013 up to date of judgment being some three years’ salaries. The claim is for the breach by the Defendant in making payment in lieu of notice instead of the stated three months written notice. It remains the common law that the remedy available to an employee who has been wrongfully dismissed or terminated is an action for damages as enunciated in Felix Yaw Bani v. Maersk Ghana Limited Civil Appeal No. J4/48/2010 SC 30th March 2011. The general principle as laid down in the locus classicus, Hadley v. Baxendale [1854] 9 Ex 341 is that, the claimant is entitled to full compensation for his loses (restitutio in integrum). The measure of damages for loss which is not too remote, is the sum required to put the claimant, so far as money can, in the same position as if the contract had been performed as held in Robinson v. Harman (1848) 1 Exch 850. The relief for breach of an employment contract is therefore, not accrued salaries over a specified period but damages. In the instant case, it is not a finding of the court that Plaintiff’s employment was unlawfully terminated so the reliefs he is seeking are not in issue. 

In conclusion, Plaintiff is not entitled to his claim and same is dismissed. Costs of two thousand Ghana Cedis is awarded in favour of Defendant. 

[SGD] 

Justice Gifty Dekyem (Mrs) 

Justice of the High Court,

Labour Division I, Accra

COUNSEL

K Danso-Acheampong ESQ for Plaintiff;

Kizito Beyuo ESQ for Defendant with Waltrude Aboagye ESQ.