GHANA COCOA MARKETING BOARD V. MARTIN A. ATUAHENE

JUDGMENT

AYEBI, JA

1. In this appeal, the defendant/appellant (referred to as appellant) is challenging the conclusion of the trial court that she is liable to pay the plaintiff/respondent (referred to as respondent) and other colleagues on whose behalf he sued, severance pay for loss of employment with the defendant/appellant in the year 2000.

2. The facts of the case are the usual ones we hear in employer-employee relationship in a staggering economy like ours. The Cocoa Industry which has been the mainstay of our economy since independence is no exception despite its structured organization and management from the grassroot through various agencies. It is trite knowledge that the Agency which buys the cocoa directly from the farmers and hauls it to the port for export was the Produce Buying Agency a subsidiary of the appellant. In 1974, the respondent (Martin Atuahene) was engaged as a driver of the Produce Buying Agency. He rose through the ranks and retired as a Chief Driver of the Produce Buying Company Ltd.

3. This is because in or before 1999, the Produce Buying Agency was converted into a Limited Liability company and still ran as a subsidiary of the appellant. But in or about 1999/2000, the appellant privatized the Produce Buying Company Ltd. by off-loading its shares to a third party and was listed on the Stock Exchange. By the divestiture of its shares leading to the privatization, Produce Buying Company Ltd (PBC Ltd.) ceased to be a subsidiary of the appellant company.

4. According to the evidence of DW1, appellant’s representative at the trial, the privatization led to the reduction in the staff strength of PBC Ltd. In all about 2,255 of the staff were made redundant. In order to adequately compensate the affected staff of PBC Ltd., the salaries of all staff of the appellant and PBC Ltd. were re-aligned and their annual increments updated in June and October, 1999 to be at par. Thereafter, the affected staff who were laid-off were paid their entitlements in accordance with the agreement reached by the Joint Negotiating Committee between the PBC Ltd./Cocobod on the one hand and the Industrial and Commercial Workers Union (ICU)/General Agricultural Workers Union (GAWU) on the other and those retained were to enjoy continuous service from the first date of employment with PBC/Cocobod.

5. That agreement is Exhibit I and it is found at page 221 to 223 of the record of appeal. In clause 6, the continuous service of the retained staff is guaranteed in the following terms:

“Cocobod confirmed that the number of years by PBC employees being carried on to the new company shall have all future entitlements calculated on the basis of their original date of employment with PBC Ltd./Cocobod i.e. service shall be deemed to be continuous for all retained employees from date of appointment with PBC/Cocobod”.

6. It is the case of the respondent as pleaded that, as a result of the divestiture of the PBC Ltd, he and others have suffered less favourable terms and conditions of service. Specifically in paragraph 9 of the statement of claim, he listed them as:

(i) He and his fellow workers as employees of PBC Ltd. were no longer entitled to apply for and obtain Cocobod Scholarship and bursary for their children and wards, a right they enjoyed as employees of the defendant company.

(ii) He and his colleagues were now charged fees for attendance at the defendant’s clinics.

(iii) He and his fellow workers as employees of PBC Ltd. enjoy lesser remuneration than their counterparts in the service of the defendants.

7. It is by reason of these specific complaints that the plaintiff says he and his colleagues are entitled to severance pay from the defendant (appellant). Specifically, the reliefs endorsed on the writ of summons are:

(i) A declaration that the defendants are liable to pay the plaintiff and each of the persons on whose behalf the plaintiff brings this action severance pay for loss of employment.

(ii) An order that the defendants shall duly calculate and pay the plaintiff and each of the other persons for whom he sued the amount due to them by way of severance pay.

(iii) Interest on the sums so found.

8. This is the claim of the plaintiff which the trial court upheld. The defendant/appellant is challenging the conclusion of the trial court on the following grounds:

(i) The judgment is against the weight of evidence.

(ii) The trial judge erred in failing to give the defendant’s evidence due consideration.

(iii) The trial judge erred in relying on the earnings of plaintiff after the date of severance to determine that plaintiff suffered diminution in earnings as a result of severance.

9. These grounds of appeal were filed on 7th May, 2013 with the indication that further grounds of appeal will be filed on receipt of the record of proceedings. On 27th October 2014, counsel for appellant filed two additional grounds of appeal. On the face of the process, no leave of the court was obtained. On 31st October 2016, the appellant filed an amended notice of appeal pursuant to leave granted on 25th October, 2016. But before then, appellant had filed its written submission on 11th November, 2015 in which counsel argued the two additional grounds filed on 27th October, 2014 without leave.

10. However, in the amended notice of appeal filed on 31st October, 2016 pursuant to leave, only the three original grounds of appeal were repeated. In other words, the two additional grounds of appeal filed earlier on without leave were not added. What it means therefore is that, the two additional grounds of appeal filed and argued without leave are still defective as they have not been set out as grounds of appeal as mandated by rule 8(2) of C.I. 19, Court of Appeal Rules of 1997 as amended. I noticed the counsel for plaintiff/respondent challenged arguments proffered on the second additional ground of appeal which cannot be found in the amended notice of appeal, but not the first one. But from the records, the two additional grounds of appeal were indeed filed and argued without the leave of the court in accordance with the Rules of Court. They are inadmissible and are accordingly struck out.

11. That leaves as valid the three original grounds of appeal. I notice also that the trial judge’s statement of the facts of the case especially the sequence of events and dates is most inaccurate. Counsel for the plaintiff/respondent also fell into the same error to some degree in his written submission in response. Since all superior courts are courts of record, it behoves the court as well as the parties/lawyers to endeavor in all circumstances to state facts of the cases as fairly accurate as they can. The facts of the case, inaccurately stated, will naturally have a bearing on the evaluation of the evidence and the final conclusion drawn thereon.

12. So before I discuss the submissions of counsel on the three grounds of appeal directly, I will first analyse the first relief of the plaintiff and his colleagues as endorsed on the writ of summons. I will do this in the light of the pleadings and the evidence led thereon. According to the respondent, he and his 683 other colleagues whom he represents in this action were employees of the appellant up to 2000. Although they claim to be employees of the appellant, they were actually the workers of PBC Ltd., a subsidiary company of the appellant. And after PBC Ltd. was privatized or the defendant divested its shares in PBC Ltd., the plaintiff and his colleagues continued to work with PBC Ltd. The evidence on record shows that long before the privatization in 1999/2000, the appellant had incorporated PBC as a Limited Liability Company.

13. The plaintiff/respondent told the court that, after the privatization of PBC Ltd. he continued to work as a staff of it until he retired five years, five months later. It was after he had retired in May 2005 that he sued the appellant for severance pay for loss of employment.

14. In its defence, the appellant denied the claim and the case put up by the plaintiff/respondent and his colleagues. In particular, the defendant/appellant denied that the plaintiff/respondent has suffered less favourable terms and conditions of service and diminution in remuneration after the privatization of PBC Ltd. Rather, being employees of a private company, the plaintiff/respondent earned more than employees of the defendant/appellant, a public company.

15. In an employer-employee relationship, for an employee to be entitled to severance pay, there must be evidence that the employee for no fault of his, had to leave the employment of the employer because the employer no longer has a job for the employee. In industrial practice, the severance pay or package which consists mainly of money is always negotiated between the employer and the worker or their representatives if not envisaged and provided for in the Collective Bargaining Agreement.

16. Both at the trial court and in this court, counsel for both parties relied on the case of GTP v. Ankujeah [1999/2000] 2 GLR 473 in which paragraph 34(2) of the Labour Decree, 1967 (NLCD 157) as amended by the Labour (Amendment) Decree, 1969 (NLCD 324) was referred to as a guide in determining the question of who had suffered a diminution in conditions of service and was therefore eligible to severance pay. Counsel for the plaintiff/respondent relied on that law because it was in force in 2000 when the defendant/appellant privatized PBC Ltd. Counsel for defendant/appellant did not give any reason for applying it except for its relevance.

17. But that law has been effectively repealed by the Labour Act, 2003 (Act 651). There is however in Act 651 in section 65 under the subheading “Redundancy” matters provided for in paragraph 34(2) of the repealed Decree 157 as amended. This is the current and applicable law. In section 65(1), it is required that an employer informs and consults with the Chief Labour Officer and the relevant Trade Union respectively, if the employer contemplates the introduction of major changes in production, programme, organization, structure or technology or an undertaking that are likely to entail termination of employment of workers in the establishment or the undertaking.

18. I will quote subsections (2) to (5) of section 65 because they are very relevant to the basis of the claim of the plaintiff/respondent:

“(2) Without prejudice to subsection (1), 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”.

(3) In determining whether a worker has suffered any diminution in his or her terms and conditions of employment, account shall be taken of the past services and accumulated benefits, if any, of the worker in respect of the employment with the undertaking before the changes were carried out.

(4) The amount of redundancy pay and the terms and conditions of payment are matters which are subject to negotiation between the employer or a representative of the employer on the one hand and the worker or the trade union concerned on the other.

(5) Any dispute that concerns the redundancy pay and the terms and conditions of payment may be referred to the Commission by the aggrieved party for settlement, and the decision of the Commission shall subject to any other law be final”.

19. From the record as shown in Exhibit 1, there is no gainsaying that defendant/appellant has faithfully complied with this provision of the law after divesting her interest in PBC Ltd. In the submission of counsel for plaintiff/respondent, he argued that the privatization or divestiture of PBC Ltd. by defendant/appellant is an “arrangement”. This “arrangement” he submitted resulted in severing the legal relationship of employer/employee between defendant/appellant and its wholly-owned subsidiary as well the latter’s employees on the one hand and PBC and its employees on the other hand.

20. On pages 15 and 16 of the written submission, counsel for the plaintiff/respondent explained in detail what they meant by severance of their employment relationship with the defendant/appellant. According to him, their claim that they suffered severance is not based on the divestiture of PBC from defendant/appellant. They argued that as workers of PBC Ltd. a subsidiary of defendant/appellant before the divestiture, they were regarded as employees of the defendant/appellant since they enjoyed the same emoluments and conditions of service as the workers of defendant/appellant itself.

21. But with the divestiture of its shares to third parties, defendant/appellant had ceased in fact and in law to be the owner of PBC Ltd. The divestiture therefore resulted in a complete severance of the parent company subsidiary relationship between defendant/appellant and PBC Ltd. The plaintiff/respondent’s submission emphasized that the severance which took place was between defendant/appellant as owner of PBC Ltd. and PBC and its staff as a wholly owned subsidiary of defendant/appellant on the one hand and the new wholly independent PBC and its staff. To them whether the wholly new independent PBC Ltd. carried over from the defendant/appellant, there was a severance between plaintiff and his colleagues and defendant/appellant.

22. If I understand the submission of the plaintiff/respondent’s counsel correctly, the severance they talked of which is the basis of their claim is the severance of parent company – subsidiary company relationship between defendant/appellant and PBC Ltd. directly. And indirectly, the plaintiff/respondent and his colleagues lost their employment relationship with the defendant/appellant.

23. Is that the sense in which subsection 2 of section 65 of Act 651 should be understood? From reading the subsection 2 as a whole, I distil the conditions which must exist for a worker to be entitled to redundancy pay (severance pay) as a result of an “arrangement” as alleged in this case as follows:

(a) the arrangement must cause severance of the legal relationship of the worker and employer as it existed immediately before the arrangement, or

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

(c) in addition to the severance the worker becomes unemployed or suffers diminution in the terms and conditions of employment, and

(d) the undertaking at which the worker was immediately employed prior to the arrangement is liable to pay the compensation.

24. It is a settled rule of statutory construction that to determine the intent of any legislation, its wording must be read and construed as a whole. In so doing the words used in the statute must be given their ordinary and natural sense unless that would lead to some absurdity. On reading section 65 of Act 651 as a whole, it is plain that it is a worker whose legal relationship with the employer has been severed by an arrangement or amalgamation or the close down and as a result has become unemployed or suffered diminution in terms and conditions of employment who is entitled to be paid redundancy or severance pay. The evidence on the record especially Exhibit I showed that the legal relationship between the plaintiff/respondent and his colleagues as workers of PBC Ltd. had not been affected by the divestiture of PBC Ltd. by the defendant/appellant. The plaintiff/respondent and his colleagues whose service with the new PBC Ltd. was deemed continuous from the original date of engagement by PBC Ltd. or defendant/appellant had not become unemployed at any time even after the arrangement. As I shall show later, their terms and conditions of service have not suffered any diminution either.

25. The overstretched or extended meaning given to severance of employer-employee relationship by the plaintiff/respondent and his colleagues as submitted is not the intendment of s.65(2) of Act 651. Inspite of the divestiture of PBC Ltd. by defendant/appellant, the job and the tenure of the plaintiff/respondent and his colleagues were saved and guaranteed with the new PBC Ltd. If the position canvassed by the plaintiff/respondent and his colleagues is acceded to, commercial establishments or business enterprises will be stagnant in their operations as they will be deprived of capital. The position I hold, is not tenable in law and it is accordingly rejected. That being so, relief (1) as endorsed on the writ of summons is without any merit at all because the plaintiff/respondent and his colleagues have not at any time lost their employment with the defendant/appellant or PBC Ltd.

26. This conclusion I reached should be sufficient to dispose of this appeal in favour of the defendant/appellant. But there are other issues which cannot be glossed over. As the evidence shows, the plaintiff/respondent retired from the employment of the divested PBC Ltd. before he launched this action against the defendant/appellant. The action or claim suggests that PBC Ltd. did not pay him his full entitlement in accordance with clause 6 of Exhibit 1. But he failed to prove it. Under cross-examination, he maintained he was only paid his provident fund which he personally contributed. This assertion, again he failed to prove.

27. By the provisions of section 11(1) of the Evidence Act, 1975 (NRCD 323), a claimant such as the plaintiff/respondent has the obligation to prove his case by introducing sufficient evidence to avoid a ruling against him on the issue of non-payment of adequate retirement benefit to him. That obligation has not shifted in this suit because the defendant/appellant has not counter-claimed for any relief. Whatever amount which was paid to the plaintiff/respondent on his retirement by the divested PBC Ltd. was certainly documented. The plaintiff/respondent should have produced any such document to positively prove his case that he was not paid adequate retirement benefit – see Majolagbe v. Larbi and Ors. [1959] GLR 190 at page 192. In the premises, this action against the defendant/appellant and not the divested PBC Ltd. in my view, is not brought bona fide.

28. In ground one, the appellant maintained that the judgment is against the weight of evidence while in ground two, appellant faulted the trial judge for failing to give her evidence due consideration. The implication of the ground of appeal that a judgment is against the weight of evidence is trite. It is sometimes boring reciting them – see Tuakwa v. Bossom [2001/02] SCGLR 61, Djin v. Baako [2007/08] SCGLR 686 and several others. Counsel for the plaintiff/respondent purported to argue the two grounds together but failed to make any reference to the evidence led in proof of his allegations in paragraph 9 of the statement of claim. Rather he concentrated on what he called significance of the divestiture with his own assigned meaning of severance of employer-employee relationship, which we have rejected as untenable. Counsel defended the judgment by submitting that the fact that the trial judge opted to write a concise rather than an elaborate judgment did not render his judgment defective or void. He submitted that before the trial judge proclaimed that “the evidence is clear from both the respondent and the appellant company that the conditions of service for PBC was not the same as that of Cocobod” it is to be understood or presumed that he weighed the evidence of both parties.

29. That presumption with all due respect to counsel, has no basis. The basis of plaintiff/respondent’s claim as endorsed on the writ of summons is the specific charges he made against the defendant/appellant in paragraph 9 of the statement of claim. The plaintiff/respondent alleged that under the divested PBC Ltd., they lost the right to apply for and obtain Cocobod scholarship and bursary for their children and wards. The contrary evidence led by the defendant/appellant and which the plaintiff/respondent accepted is that the enjoyment of Cocobod scholarship or bursary by children and wards of staff of Cocobod and farmers is a privilege and not a right. It is a privilege because it is enjoyed by brilliant children or wards whose application has been favourably considered by defendant/appellant.

30. The second charge by plaintiff/respondent that he and his colleagues were charged fees for attending defendant’s clinics was established to be unfounded. This is because plaintiff/respondent admitted under cross-examination that the divested PBC Ltd. has been paying the fees and no worker of PBC Ltd. who attends the clinics is made to pay any fees.

31. Lastly, plaintiff/respondent complained that he and his fellow workers enjoyed lower remuneration than their counter-parts in the service of the defendant. In the attempt to prove this charge against the defendant/appellant, counsel for plaintiff/respondent compared the salary levels of DW1, the Human Resource Manager of the defendant/appellant and that of his counterpart in the divested PBC Ltd. over the period of 2000 to 2007. The comparison showed that the salary levels of DW1 were higher than his counterpart in the employment of PBC Ltd. No explanation was given why the salary levels of plaintiff/respondent who retired as a Chief Driver was not compared to his counterpart in defendant/appellant’s employment.

32. But with the admission by DW1 that the divestiture of PBC Ltd. appeared to have made its employees poorer, counsel relied on cases such as Osei Yaw and Or. v. Domfeh [1965] GLR 418 and Tsrifo v. Dua VIII [1959] GLR 64 to submit loudly that the plaintiff/respondent’s case has been proved because DW1 his opponent has admitted it. I hold the view that although the principle of law as propounded in those cases is good law, the facts of this case are completely dissimilar to circumstances in which that principle of law is applicable.

33. That submission relied on by counsel for the plaintiff/respondent is with all due respect is oblivious of the defence of the defendant/appellant and made out of context. The general defence of the defendant/appellant to these complaints by the plaintiff/respondent is that the salary levels and conditions of service of employees of both organizations are subject to their Collective Bargaining Agreements negotiated on their behalf by their common mother union, the Industrial and Commercial Workers Union (ICU). DW1 made it clear that defendant/appellant employees depended on their bargaining power through their negotiators for enhanced salary levels and conditions of service. That being so, the basis of comparison of salary levels of the two organizations is flawed as it is misleading.

34. That apart, the evidence of DW1 made it clear that before the defendant/appellant divested its shares in PBC Ltd., it re-aligned the salaries and conditions of service of PBC Ltd. to be at par with that of its staff in 2000. This is not denied as it is admitted by plaintiff/respondent and PW1, a local union secretary. Both of them stated that over the years, after the divestiture, their salary levels lagged behind that of employees of defendant/appellant. So if after the divestiture, plaintiff/respondent and his fellow workers could not negotiate with the management of the divested PBC Ltd., for higher wages and improved conditions of service, should the defendant/appellant he held liable? Supposing by dint hardwork coupled with sound management, PBC Ltd. became economically enable, and the workers were enjoying higher levels of salary and better conditions of service than in 2000, the year of divestiture, will after his retirement? We do not think so. Therein lies the absurdity of the claim. The claim we hold is too remote in the circumstance to be tenable in law. We do not think so. The claim of the plaintiff/respondent and his fellow workers is too remote in the circumstances to be tenable in law.

35. In my view, the complaint that the trial judge failed to give defendant’s evidence due consideration is very legitimate. I find and hold that the judgment is indeed against the weight of evidence on the record. This is because the findings/conclusions reached by the trial judge were clearly not supported by the evidence on the record. The conclusion of the trial judge that the plaintiff/respondent and his fellow workers suffered diminished terms and conditions of service as a result of the divestiture is contrary to plaintiff/respondent’s own admissions. Finally, the trial judge’s acceptance of plaintiff/respondent’s interpretation of severance of legal relationship between a parent company and a subsidiary company as amounting to severance of employer-employee relationship is contrary to the law on redundancy and entitlement to redundancy payment thereunder. For all the reasons above, we have no option than to interfere with the judgment of the trial court – see Gregory v. Tandoh and Hanson [2010] SCGLR 971. Accordingly, we set aside the judgment and uphold the appeal in its entirety.

SGD

E.K AYIBA JA

JUSTICE OF THE COURT OF APPEAL

SGD

GERTRUDE TORKORNOO (MRS) JA

JUSTICE OF THE COURT OF APPEAL

SGD

ANGELINA M. DOMAKYAAREH (MRS.) JA

JUSTICE OF THE COURT OF APPEAL

COUNSEL

AKWASI OPOKU FOR DEFENDANT/APPELLANT

MR. JOHN BREFO FOR PLAINTIFF/RESPONDENT