KWAME GYAN TAWIAH V. MANTRAC GHANA LIMITED

JUDGMENT

DEKYEM, J.

Defendant is a company whilst Plaintiffs are its former senior staff. By letter dated  22nd January, 2014 effective 23rd January, 2014, the appointments of Plaintiffs  were terminated. In a further letter of the same date, Plaintiffs were offered ex  gratia award of six months’ basic salary as goodwill for their services to  Defendant. In a memorandum dated 24th January, 2014 from Defendant’s  Managing Director to its staff, it was made clear that, as result of a HEADCOUNT  REVIEW, Plaintiffs’ were affected hence the termination of their employment  contracts. The letter also stated the names of Acting Employees who would cover  the positions Plaintiffs held until further notice. It is Plaintiffs’ case that, the HEADCOUNT REVIEW was an arrangement or programme under which the  Defendant undertook labour rationalization exercise in the result of which the  Plaintiffs were found either as being in excess of the needed staff strength or not  fit to be part of the Defendant’s new programme or arrangement. Plaintiffs  contend that, Defendant on completion of the arrangement or programme by  way of the HEADCOUNT REVIEW and identifying Plaintiffs as excess labour should  have engaged Plaintiffs individually or collectively to negotiate REDUNDANCY PAY  in the absence of specified redundancy pay contained in the Plaintiffs’ conditions  of service before terminating the Plaintiffs appointment and in addition paying  two months’ salary in lieu of notice. Plaintiffs are thus seeking the following  reliefs: 

a. A declaration that the termination of the Plaintiffs’ employment on  grounds of a HEADCOUNT REVIEW was an arrangement or a  programme undertook by the Defendant that rendered Plaintiffs  unemployed thus constituting a redundancy exercise carried out by  the Defendant. 

b. A declaration that the Plaintiffs having become unemployed as a  result of a HEADCOUNT REVIEW are entitled to REDUNDANCY PAY  and not a unilaterally imposed EX-GRATIA AWARD by the Defendant. 

c. An order to the Defendant to calculate the redundancy pay of the  Plaintiffs using 2 months basic salary for each completed year of  service pro rata using the Defendant/ICU Collective Agreement for  the Professional and Managerial Staff as a guide or in the alternative an  order to the Defendant to negotiate REDUNDANCY PAY with the  Plaintiffs in accordance with SECTION 65 (2 and 4) of Act 651. 

d. An order to the Defendant to change the content of the Plaintiffs  termination letter from termination simpliciter ie termination  without reason and paying in lieu of notice to termination ongrounds of a HEADCOUNT REVIEW or REDUNDANCY and payment of  two months’ salary in lieu of notice. 

e. Recovery of all accrued salaries and benefits from the date of  purported termination of Plaintiffs’ contract of employment  simpliciter till date of final payment. 

f. General Damages for wrongful termination of Plaintiffs employment  simpliciter instead termination of Plaintiffs employment as being on  grounds of a headcount review or redundancy. 

g. Costs. 

Defendant denied Plaintiffs’ claim and contended that, there has not been any re organization at Defendant’s. Further that, Plaintiffs were not unionized, they being management staff therefore are not entitled to redundancy package under  the Collective Agreement between the Defendant and the Industrial and  Commercial Workers Union (ICU). It is Defendant’s case that Plaintiffs’  employment contracts were terminated in accordance with clause 31(iii) of the  Mantrac Ghana/Delta Equipment Human Resources Manual for non- unionized Staff, a policy containing the conditions of service of the management staff of the  Defendant. Defendant states also that, the ex gratia award made to Plaintiffs were on goodwill grounds and that it was not obligated to do so. At directions  stage, the following issues were settled for trial: 

a. Whether the termination of the Plaintiffs employment on grounds of Head  Count Review was an arrangement or programme that rendered the  Plaintiffs redundant and thus entitling Plaintiffs to redundancy pay.

b. Whether by paying into Plaintiffs individual bank account on the Plaintiffs  Solicitor’s letter on the termination letter of Plaintiffs employment dated  30th January 2014 estops the Plaintiffs from instituting the instant action. 

c. Whether the INTER OFFICE MEMORANDUM dated 24/01/14 published  specifically on the Plaintiffs gave the grounds of termination of Plaintiffs  employment on 23rd January 2014. 

d. Whether the Plaintiffs are entitled to the reliefs endorsed on the Writ of  Summons.

Additional issue: 

1. Whether the plaintiffs’ employments were terminated or the plaintiffs  were declared redundant? 

On the burden of proof, Takoradi Flour Mills v. Samir Faris [2005-2006] SCGLR 882  -885 held at holding 4 that: “Since it was the plaintiff, …… who made a claim …….,  he had to adduce evidence sufficient to establish a prima facie case. When the  plaintiff has been able to discharge the burden of proof on him and has by his  evidence, established facts from which an inference can reasonably be drawn in  his favour, then the onus would shift on the second defendant company, the  appellant, to dispute that inference, not by a mere denial, but by reasonable  inference.” In Attorney-General v. Sallah [1970] CC54, it was held that, “…where the facts are controverted as in the instance application, they must be proved. 

The standard of proof required should at least reach that required in civil cases.” The provisions regarding standard of proof in civil cases are found in the following  sections of the Evidence Decree, 1975 (NRCD 323) which make it plain that the  onus of proof is on the Plaintiff who made the claim in the first instance.

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. 

Whether the termination of the Plaintiffs employment on grounds of Head Count  Review was an arrangement or programme that rendered the Plaintiffs redundant  and thus entitling Plaintiffs to redundancy pay? Section 65 of the Labour Act, 2003  (Act 651) on redundancy provides as follows: 

(1) When an employer contemplates the introduction of major changes in  production, programme, organisation, structure or technology of an  undertaking that are likely to entail terminations of employment of workers  in the undertaking, the employer shall 

a. provide in writing to the Chief Labour Officer and the trade  union concerned, not later than three months before the contemplated changes, all relevant information including the  reasons for any termination, the number and categories of  workers likely to be affected and the period within which any  termination is to be carried out; and 

b. consult the trade union concerned on measures to be taken to  avert or minimize the termination as well as measures to  mitigate the adverse effects of any terminations on the  workers concerned such as finding alternative employment. 

(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. 

Plaintiffs testified per their witness statement that: “having lost our employments  on grounds of headcount review exercise which was an arrangement or major  change or programme undertaken by the Defendant to all intent and purposes  constituted a redundancy exercise and thus entitled us to payment of “redundancy  pay” as mandated by SECTION 65 (2) (a and b) of the Labour Act, 2003, Act 651  which we understand provide as follows;..” Section 65 (2) (a) and (b) provides that  where an undertaking closes down, undergoes arrangement or amalgamation  which results in the termination of the employment of the employee, the latter is  entitled to ‘redundancy pay’. The question to ask is whether the headcount  review amounted to a close down, arrangement or amalgamation? The inter  office memorandum informing of the reason for the termination of Plaintiffs’  employments as being due to a headcount review in the same breadth indicated  that, their positions were to be taken over by other named employees. A safe  inference can be made that, Defendant had not closed down but was still in  operation before and following severance of the employment relationship  between parties herein. Section 229 of the Companies Code, 1963 (Act 179)  define both ‘arrangement’ and ‘amalgamation’ as follows: 

“(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.” 

From the statutory definitions of arrangement and amalgamation, the facts  placed before the court do not in any way suggest that, the said headcount review was an arrangement or amalgamation. Plaintiffs testified that the  headcount review was an arrangement or major change or programme without  more to demonstrate how the headcount became an arrangement or  amalgamation within the intendment of section 65 (2) of Act 651. Plaintiffs have  thus failed to discharge the burden they assumed when they made the assertion  that the head count review amounted to an arrangement or amalgamation. 

The word “programme” was used in Section 65 (1) of Act 651 which requires  an employer to notify both the Chief Labour Officer and the relevant trade union  when it contemplates major changes in production, programme, organisation,  structure or technology of an undertaking that are likely to entail terminations of  employment of workers in the undertaking. The question to ask is, did the  headcount review leading to the termination of Plaintiffs’ employment amount  to major changes as described under section 65 (1) of Act 651 to warrant the  notification of both the Chief Labour Officer and the trade union to which the  employees belong? 1st Plaintiff was cross examined thus: 

Q At the time of your termination did you know the total number of the  working force of the Defendant?

A No 

Q It is the Defendant’s case that at the time of your termination, there  were over 800 employees on the defendant’s pay roll. 

A I didn’t say so and I couldn’t contest that statement.  

Q Are you aware that the positions that the five of you plaintiffs  occupied were filled in with different employees after your  termination? 

A I am aware that employees were temporarily placed in that  positions…. 

From the above, the number of employees affected by the headcount being  Plaintiffs as compared to the workforce which was over 800 could not be  described as major. Plaintiffs’ positions were filled up by other employees, an  indication that their positions are still on the organogram of the Defendant’s thus  no major change can be said to have occurred. In the circumstances, Plaintiffs  have been unable to demonstrate that, the headcount review was a major change  in programme or indeed in production, organisation, structure or technology of  the Defendant. 

Defendant averred at paragraph 11 of the statement of defence that, there has  not been any re-organisation or change in their methods of production. This  assertion was admitted by Plaintiffs in paragraph 7 of the Reply. It is trite as held  in In Re Asere Stool; Nikoi Olai Amontia IV (substituted by Tafo Amon II) v. Akotia  Oworsika III (substituted by) Laryea Ayiku III [2005-2006] SCGLR 637 at holding 2  that: “Where an adversary has admitted a fact advantageous to the cause of a  party, the party does not need any better evidence to establish that fact than by relying on such an admission, which is an example of estoppel by conduct. It is a  rule whereby a party is precluded from denying the existence of some state of  facts which he had formerly asserted.” On this principle alone, the Court is  entitled to come to the conclusion that, there has not been any re-organisation or  change in the methods of production at Defendant’s which could have resulted in  the termination of Plaintiffs’ appointments. 

Further, the unchallenged evidence of Defendant is that, the headcount was a  monthly occurrence which Defendant used to manage its affairs. The headcount  review cannot therefore be a major change in programme to trigger compliance  of section 65(1) of Act 651. The undisputed evidence placed before the court is that, Plaintiffs were not unionized members thus section 65(1) of Act 651 did not  apply to them as no trade union could be written to or consulted as stipulated  under the said section assuming there was a major change in production,  programme, organisation, structure or technology at Defendant’s. Plaintiffs have  been unable to prove that, the headcount review, being reason for the  termination of their employment was an arrangement or programme within the  intendment of section 65 of Act 651 to entitle them to redundancy pay. Their  claim for redundancy pay fails accordingly. 

Whether the plaintiffs’ employments were terminated or the plaintiffs were  declared redundant? The Termination of Appointment letters which were  identical stated inter alia thus: 

“We hereby advise you that effective 23rd January 2014 your appointment  has been terminated as per your conditions of service.

…..You will be paid two (2) months basic salary in lieu of notice plus your  salary till 23rd January, 2014…..” 

The termination letters dated 22nd January 2014 stated clearly that Plaintiffs’  employment were terminated in accordance with their conditions of service by  payment of two months’ salary in lieu of notice and nowhere in the said letter  were Plaintiffs declared redundant. Defendant’s Human Resource Manual for  Non-Unionised Staff tendered as exhibit 1 provides inter alia as follows:

24. REDUNDANCY 

When the Employer contemplates a redundancy exercise, the provisions of  the Labour Act 2003, (Act 651) shall apply.

31 (iii) TERMINATION 

The Company may terminate the employment of a staff without assigning reasons. However such termination will come with the required notice or  payment in lieu of notice. 

Exhibit 1 states in the event that, Defendant contemplates a redundancy exercise, the provisions of Act 651 shall apply. The relevant provision being section 65 of Act 651 has been discussed above and found that, Plaintiffs are not entitled to redundancy pay. The contents of the letters terminating Plaintiffs’ appointments indicate that, the terminations were made in accordance with clause 31(iii) of exhibit 1. The Court thus finds that, Plaintiffs were not declared redundant by Defendant but that, the appointments of Plaintiffs were terminated in accordance with their employment contract and will so hold. In conclusion and in the light of the above, Plaintiffs are not entitled to their claim and same is dismissed in its entirety. There will be 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 Plaintiff