GEORGE OSEI PARRY & 105 ORS. V. SOCIETE-GENERAL (SSB) GH LTD

JUDGMENT

ASUMAN-ADU, J.

Plaintiffs’ action against the Defendant which was filed on 25th July, 2008 was for the following reliefs:-

a. A declaration that Defendant’s so-called separation/redundancy entitlements under its reorganization exercise was wrongful and unlawful being inconsistent with and in contravention of the Labour Act, 2003.

b. Damages for refusal by Defendant to pay Plaintiffs their entitlements in accordance with law, or in the alternative an order of the Court directed at the Defendant to negotiate the separation/redundancy entitlements with Plaintiffs within a specific time.

c. Interest on Plaintiffs unpaid entitlements from the date of redundancy/separation until the date of final payment.

The Defendant per its solicitors entered appearance on 6th August, 2008 and filed its Statement of Defence on the same day denying the claim of the Plaintiffs.

In the attached Statement of Claim, Plaintiffs aver that until 1998 they were junior staff of the Defendant company. In 1998, as a result of a reorganization exercise, management of the Defendant company declared them redundant which was to be subject to a separation/redundancy entitlements to be negotiated between the parties. However, without negotiating with Plaintiffs, the Defendant unilaterally determined the redundancy package due the Plaintiffs. Defendant, therefore, paid Plaintiffs separation/redundancy entitlements not negotiated but imposed by the Defendant.

The Defendant on the other hand avers in its Statement of Defence that the Plaintiffs were rather employees of Social Security Bank Ltd now called SG-SSB Limited so the name of the company is not as stated on the writ. It contends that before the separation or redundancy and in accordance with the law in 1998 the necessary processes and steps were taken and exhausted and thereafter agreement reached on all issues and payment made in respect of the exercise to all affected staff including the Plaintiffs. The said Plaintiffs who were all members of the Industrial and Commercial Workers Union (ICU) had their lawful representatives comprising the national and local officers who negotiated for them as required by law. When agreement was reached the parties sought approval from the Labour Department to effect the redundancy. The approval was given by the Labour Department in May 1998.

Defendant, therefore, contends that the Plaintiffs were duly represented by their union representatives before an agreement was reached. So there was no imposition by the Defendant or any other person. The Defendant in good faith negotiated the agreement and discharged all obligations to the Plaintiffs individually.

The Defendant goes on to aver that the Plaintiffs’ claim is not valid so they are estopped from making the claim because of the following reasons:

a. It is statute barred as it is caught by Section 4(1) of the Limitation Act, 1972 (NRCD 54) among others,

b. The Labour Act, 2003 (Act 651) does not apply to such matter which arose in 1998 when a different law applied.

c. The Labour Act, 2003 (Act 651) cannot have a retrospective effect as it would be contrary to the 1992 Constitution.

The Defendant concludes its Statement of Claim by stating that upon conclusion of the redundancy agreement that separated the Plaintiffs from the Defendant company, all their entitlements were fully paid and so no cause of action arises against the Defendant. The action must, therefore, be dismissed.

On 21st April, 2010, the Plaintiffs filed an application for directions in which they listed down the following issues for trial:

a. Whether or not negotiations towards the separation of the Plaintiffs included representatives of the TUC.

b. Whether or not the redundancy package of the Plaintiffs was unilaterally determined.

c. Whether or not separation/redundancy entitlement of the Plaintiffs was thereby imposed by the Defendant.

d. Whether or not this action is statute barred.

e. Whether or not Plaintiffs are entitled to their claims.

f. Any other issue or issues that may arise on the pleadings.

On 11th May, 2010, the Defendant filed the following additional issues:

a. Whether or not Plaintiffs’ action could be based on the Labour Act, 2003 (Act 651).

b. Whether or not the action is statute barred under the Limitation Act 1972 (NRCD 54).

c. Whether or not Act 651 could apply retrospectively.

d. Whether or not Plaintiffs could commence a legal action in the High Court of Ghana by a Motion when the action was statute barred.

e. Whether or not the Labour Act 2003, (Act 651) is applicable to Plaintiffs’ cause of action which accrued in 1998 i.e. more than 4 years after the action arose,

f. Whether or not it could be issued out of time without indorsing the authority for issuing writ out of time.

g. Whether or not the separation or redundancy exercise complied with the applicable law in 1998.

h. Whether or not the Plaintiffs are 106 as on the writ of summons or 190 as shown by the Statement of Claim and who these are.

i. Whether or not Defendant satisfied the conditions for the separation or redundancy.

j. Whether or not the Labour Department gave any approval for the agreement reached at negotiation.

k. Whether or not the lawful representatives signed the agreement to signify their consent to the terms.

l. Whether or not Plaintiffs are estopped by the conduct or act in collecting their entitlement and turning round to sue from making any claim as per their writ of summons.

m. Whether or not if any cause of action arose in 1998, it would be justifiable upon a writ issued in 2008 i.e. after 10 years.

n. Whether or not the Labour Act 2003, Act 651 has any retrospective application to a cause of action that arose in 1998.

o. Whether or not after full payment of the entitlements any cause of action arises.

All the issues were set down for trial on 18th May, 2010.

At the trial Plaintiffs’ case was presented by Jeffrey Kingsley Mensah and Alfred Nyadie. Jeffrey Kingsley Mensah told the Court that in 1998 he and the other Plaintiffs were declared redundant by the Defendant company without proper negotiations between them. He claims that they later realized that the negotiations were not properly done so they sent the case to Court. This is because the parties did not sit down to negotiate the redundancy payment. Even they did not involve the TUC in the negotiations. The Defendant unilaterally decided redundancy payment to be paid the Plaintiffs. So the amount paid to them was not sufficient. In embarking on the exercise, the Defendant did not abide by provisions in its own collective agreement on the appointment of a standing committee to negotiate the redundancy payment. Rather it was an ad hoc committee that sat on it. A copy of the minutes of the committee was tendered in evidence as Exhibit A. He further tendered in evidence copies of his appointment letter, redundancy letter and the Collective Agreement as Exhibits B, C and D respectively.

He denied that the action is statute barred. He claims that they filed for extension of time at the Fast Track Court. He tendered in evidence proceedings on the said extension of time as Exhibit E.

Alfred Nyadie who gave evidence as PW1 told the Court that he was also an employee of the Defendant company from 1975 to 1998. He claims he was the Chairman of the local union from 1992 to 1994. He told the Court that when the Defendant is undertaking reorganization exercise the normal practice contained in the Collective Agreement and also the Labour Law is that it will write to the TUC that they want to carry out that exercise. The TUC will then nominate at least two officials to meet management to negotiate on how much to pay the affected staff. He said that to the best of his knowledge the Defendant did not write to the TUC in the current exercise so it did not take part in the negotiations.

He claims that in the current exercise the joint negotiation committee did not meet. Rather, it was a body solely organized by the Defendant that met to decide on what to pay the affected staff.

The Defendant’s case was presented to Court by Mrs. Rose Fosu and Joseph Dziwornu Amegashitsi. Mrs. Rose Fosu who gave evidence on behalf of the Defendant told the Court that she was the Head of the Human Resource and Management Department of the Defendant company during the reorganization exercise in 1998 so she played a key role in the negotiations in respect of the exercise. She told the Court that the negotiations involved management, the senior staff association, the local union and ICU of the TUC. The representatives of the various groups met to negotiate on the benefits to be paid to those who were affected as a result of the exercise. After that they went to the Labour Office to secure a fiat for the implementation of the exercise. She tendered in evidence the first and the second fiats received from the Labour Office and a letter inviting the ICU of TUC to a meeting in connection with the exercise as Exhibits 1, 2 and 3 respectively. Her evidence that management, the senior staff association, the local union and the ICU of TUC met to negotiate on the exercise was corroborated by Joseph Dziwornu Amegashitsi.

Though several issues were set down by this Court for trial, from the pleadings and the evidence before the Court the issues pertinent to the determination of this suit may be grouped as follows:-

a. Whether or not Plaintiffs’ action is statute barred.

b. Whether or not the negotiations towards, and the payment of entitlements under, the separation/redundancy or reorganization exercise were done in accordance with the approved procedure.

c. Whether or not Plaintiffs are estopped by their conduct or act in collecting their entitlement and turning round to sue from making any claim as per their writ of summons.

d. Whether or not Plaintiffs are entitled to their claims.

On the first issue which is whether or not the Plaintiffs’ action is statute barred, the Defendant argues that by section 4(1) of the Limitation Act, 1972 (NRCD 54) Plaintiffs’ action is statute barred since the action arose in 1998. Plaintiffs are, therefore estopped from commencing this action in 2008 that is about 10 years after the action arose.

The Plaintiffs on the other hand argues that having realized that the action was statute barred they applied to the Fast Track High Court for extension of time to file the suit out of time. So per Suit No AHR 50/2007 which was tendered in evidence as Exhibit E they were granted extension by the Court to sue out of time Section 4(1) of the Limitation Act notwithstanding. So the question that this Court will have to resolve is whether by the proceedings in suit No AHR 50/2007 the Plaintiffs could sue out of time so Section 4 (1) of the Limitation Act is not applicable to this action?

By Section 4(1) of the Limitation Act, 1972 (NRCD 54) since this action arose in 1998, Plaintiffs had up to 2004 to institute action against the Defendant. That is they had up to six years time to take action in the case. Having waited up to 2008, the Plaintiffs are out of time and cannot bring an action against the Defendant except where they are granted extension of time by a Court of competent jurisdiction. In the current case the Plaintiffs claim that by Exhibit E they had a Court order to sue out of time. For the avoidance of doubt I will want to quote the whole of Exhibit E in this judgment.

“IN THE HIGH COURT OF JUSTICE GHANA, AUTOMATED COURT 2 HELD IN ACCRA, ON WEDNESDAY THE 23RD DAY OF JULY 2008, BEFORE HIS LORDSHIP JUSTICE K. A. OFORI ATTA

HIGH COURT JUDGE.

SUIT NO. AHR 50/2007

GEORGE OSEI PARRY and 155 ORS

VS

SG-SSB BANK

1ST APPLICANT PRESENT

OTHER APPLICANTS ABSENT

RESPONDENTS ABSENT

KOBINA DARKO ASIEDU FOR APPLICANTS PRESENT

COUNSEL FOR RESPONDENTS ABSENT

XX XX XX XX XX XX XX XX XX XX XX

BY COURT: Application granted. The writ to be issued by Friday 25th July 2008.

(sgd) K. A. OFORI ATTA

JUSTICE OF THE HIGH COURT”

The Court observes that whilst in Exhibit E the Plaintiffs are George Osei Parry and 155 others in the current suit the Plaintiffs are George Osei Parry and 105 others. Also the writ and the Statement of Claim filed by the Plaintiffs on 25th July 2008 made no reference to suit No AHR/50/2007 indicating that though the suit had been filed out of time they had an order of the Court to do so. There is, therefore, no connection between Exhibit E and the current suit. One would have thought that since the Plaintiffs are out of time they would have made reference to the order granted them to sue out of time in the current suit. Having failed to make reference to Exhibit E in the current suit, Exhibit E becomes irrelevant to the current suit. More so the Plaintiffs in that proceedings and the current suit are not the same so there is nothing to show that that order was granted as a result of the current suit. This Court cannot, therefore, rely on it to accept that the Plaintiffs were right in filing the current suit out of time. In view of that the Court agrees with the Defendant that this suit, having been filed out of time is statute barred by the Limitation Act, 1972 (NRCD 54). It is, therefore, of no legal effect.

Though the Court has held that the action is statute barred I will want to consider the other issues before coming out with my final decision on the case.

The next issue to consider is whether or not the negotiations towards, and the payment of entitlements under, the separation/redundancy or reorganization exercise were done in accordance with the approved procedure.

On this issue the Plaintiffs claim that the Defendant did not follow the normal procedure in embarking on the reorganization exercise. They claim no standing negotiations committee was set up to negotiate the redundancy pay. Rather it was the Defendant itself that set up an ad hoc committee which was not done in accordance with the collective bargaining agreement. The TUC was, therefore, not involved in the negotiations. The Defendant on the other hand claims the exercise was conducted in accordance with the approved procedure. It claims it wrote to the ICU of the TUC and they nominated their representatives. So management, the ICU of the TUC, the senior staff association and the local union met to negotiate on the redundancy pay. After that they applied to the Labour Office for a fiat to undertake the exercise which was granted. They, therefore, satisfied the requirements for the exercise.

In civil cases, the general rule is that the party who in his pleadings or writ of summons raises issues essential to the success of his case assumes the onus of proof. See Faibi v. State hotels Corporation (1968) GLR 471 and Bank of West Africa Ltd v. Ackun (1963) 1 GLR 176. The burden of proof cast on the Plaintiff in such matters, has been laid recently by the Supreme Court in the case of Don Ackah v. Pergah Transport Limited and 2 Ors, Civil Appeal No J4/5/2009, 21st April, 2010 (unreported) where Adinyira JSC at page 5 of the certified copy of the judgment stated as follows:

“It is a basic principle of the law on evidence that a party who bears the burden of proof is to produce the required evidence of the fact in issue that has the quality of credibility short of which his claim may fail”

Since the current case borders on employer-employee relationship the burden of proof imposed on the Plaintiffs is for them to lead sufficient evidence to prove the terms of their employment on redundancy and that the way the Defendant conducted the exercise breached their terms of employment or contravenes some statutory provisions for the time being regulating their employment as far as the issue of redundancy is concerned. If Plaintiffs fail to satisfy the Court on these points they cannot succeed on that issue. See Kobi v. Ghana Manganese Co. Ltd. [2007-2008] SCGLR 771.

In the current case the first relief endorsed on the writ of summons states as follows:

“A declaration that Defendant’s so called separation/redundant entitlements under its reorganization exercise, was wrongful and unlawful being inconsistent with and in contravention of the Labour Act 2003.”

So by the said endorsement this Court is being called upon by the Plaintiffs to declare that the reorganization exercise undertaking by the Defendant was in contravention of the provisions on redundancy in the Labour Act, 2003 (Act 651). The exercise was undertaking in 1998 and at that time the Labour Act was not in existence. The Act came into existence in 2003 and by Article 107(b) of the 1992 Constitution of the Republic of Ghana the Labour Act has no retrospective effect. So this Court cannot declare that the way the exercise was conducted contravenes the Labour Act, 2003 (Act 651). If anything at all, the relevant law at the time of the exercise in 1998, was the Labour (Amendment) Decree, 1969 (NLCD 342), which has been repealed by the Labour Act, 2003 (Act 651). However, since Plaintiffs never made reference to that law in their claim this Court cannot substitute the Labour Act in the said relief with the Labour Amendment Decree. See the case of Dam v. J. K. Addo and Brothers (1962) 2 GLR 200.

In that case the appellant sued the respondents in the High Court, Kumasi, for accounts and for money due and owing to him. After due consideration of the respective cases of the parties, the trial judge resolved the issues as set out in the summons for directions and thereby rejected the respondents’ case. He did not, however, give judgment for the appellant but gave judgment for the respondents, basing himself on details on which no evidence had been adduced since they did not form part of the respondents’ case as disclosed by the pleadings. The Supreme Court held at page 203 as follows:

“the process of consideration and weighing up the respective cases of the parties by which the learned judge arrived at the conclusion at which he did arrive, would appear to have involved the substitution of him proprio motu of a case substantially different from, and inconsistent with, the case put forward by the respondents and the ultimate acceptance by him of that substituted case which was not the respondents’ case at all. This acceptance in favour of a party of a case different from and inconsistent with that which he himself has put forward in and by his pleadings, has been held to be unjustifiable and fundamentally wrong both by the English Superior Courts and our local Superior Courts”.

On the authority of the case referred to above, this Court cannot substitute the Labour Act, 2003 in relief 1 with the Labour (amendment) Decree, 1969 (NLCD 342) and declare that the exercise was in contravention of the Labour Amendment Decree. That will be unjustifiable and fundamentally wrong. Since the Labour Act was not in existence at the time of the reorganization in the Defendant company it cannot be declare that the way the exercise was undertaken was inconsistent and in contravention of the Labour Act, 2003 (Act 651).

The Plaintiffs tendered in evidence the revised Collective Agreement, dated August, 1991 as Exhibit D. However, the said Collective Agreement has no provision on redundancy so it is not clear the reason for which that exhibit was tendered in evidence. The Plaintiffs have, therefore, failed to prove that the way the Defendant undertook the exercise was in breach of its terms of employment or contravenes any statutory provisions that regulate employment. Meanwhile, the Defendant has tendered in evidence documents showing that the Defendant involved both the National Union and the Local Union in the negotiations. This is confirmed by Exhibits 1 and 2. Exhibit 3 also shows that the Defendant involved the National Union by writing to the ICU of TUC. Even though the Plaintiffs claim that the fiat issued to the Defendant was issued after the Defendant had declared the Plaintiffs redundant and paid them their redundancy pay which was unilaterally determined, the totality of the evidence before the Court shows that the Plaintiffs have not been able to discharge the burden on them, therefore, making Defendant’s case more probable than the Plaintiffs’ case. It is, therefore, the opinion of the Court that since the Plaintiffs have not been able to prove to Court that the Defendant breached the terms of their employment or statutory provisions regulating employment but the Defendant has proved that management met the National Union, the Local Union and the Senior Staff Association to negotiate the amount to be paid and was subsequently given a fiat by the Labour Office it follows that the exercise was conducted in accordance with the required procedure and I so hold.

The next issue to consider is whether or not Plaintiffs are estopped by their conduct or act in collecting their entitlement and turning round to sue from making any claim as per their writ of summons. On this issue the evidence before the Court as presented by the Defendant is that the exercise was conducted in accordance with the required procedure and they were paid whatever was due them. So the question is since the Plaintiffs have already been paid their redundancy pay, do they have any cause of action against the Defendant? The principle on this is provided in the case of Ashun v. Accra Brewery Ltd. (2009) SCGLR 81.

In that case the Plaintiff was in the employment of the Defendant company as chief of security. On 29th November 1996, the Plaintiff received a letter from the managing director of the company, informing him that his services would no longer be required as from 2nd December 1996 because his post in the company had been declared redundant as a result of manpower rationalization exercise by the company. The letter also offered the Plaintiff a monetary compensation package consisting of salary up to 2nd December 1996 plus three months’ salary in lieu of notice; severance award of two and half pay for each year of service commencing from 1st January 1991; and accrued leave entitlements.

On 5th December 1996, the Plaintiff collected the monetary compensation package offered by the Defendant company. However, on 29th January 1997, barely some six weeks later, the Plaintiff (per his lawyer) wrote to the Defendant company complaining that the applicable Senior Staff Conditions of the company contained no provision covering payment for redundancy; and that the Defendant’s action declaring him redundant was unlawful and smacked of arbitrariness and injustice. On the other hand, the stance taken by the Defendant company was that the redundancy exercise was in accordance with contractual terms implied by practice and usage.

In the event, the Plaintiff sued in the High Court, Accra claiming, inter alia, that: (i) he had been unlawfully declared redundant; (ii) damages for unlawful termination of employment; and (iii) “an order for payment of all salaries, increments and all other benefits for the remaining six years service with the Defendant company.” The trial judge granted the Plaintiff’s claims but refused to award general damages for wrongful termination of contract. He, however, ordered the parties to negotiate over the severance award within one month. Both parties appealed to the Court of Appeal from the decision of the trial Court, the Plaintiff complaining that the trial judge should have awarded him general damages for wrongful termination of his contract. The Court of Appeal dismissed the appeal by the Plaintiff. He further appealed to the Supreme Court on the grounds, inter alia, that the Court of Appeal had erred in failing to appreciate that the Plaintiff’s right to negotiate for an appropriate severance award had not been extinguished by the mere receipt of the monetary package offered by the Defendant company.

The Supreme Court held that under general contract principles, the Plaintiff, by accepting the package offered him, entered into a compromise agreement which appeared to extinguish any claims that he had against his employer in respect of the wrongful termination of his employment. At the very least, he should have indicated at the time he accepted the package that he was doing so, without prejudice, or under protest. It was, however, open to the Plaintiff to reject the redundancy package, if he was so minded. By accepting the package, he made the termination one by mutual agreement, not unilaterally determined by the employer. Furthermore, the acceptance by the Plaintiff of the redundancy package offered him by the employer, meant that the termination of his employment was not unlawful or wrong.

Even though in that case the Plaintiff sued that he had been declared redundant so he was demanding damages for unlawful termination of employment which is different from the reliefs being sought by the Plaintiffs in the current case, the principles outlined by the Supreme Court in that case are applicable to the current case. These are:

Under general contract principles, the Plaintiffs, by accepting the package offered them, entered into a compromise agreement which appeared to extinguish any claims that they had against the Defendant in respect of the redundancy exercise undertaken by it.

At the very least the Plaintiffs should have indicated at the time they accepted the package that they were doing so without prejudice or they were doing so under protest.

It was open to the Plaintiffs to reject the redundancy pay offered them if it was not properly negotiated for. By accepting the package, they made the redundancy exercise undertaking by the Defendant one by mutual agreement, not unilaterally determined by the employer.

The acceptance by the Plaintiff of the redundancy package offered them by the Defendant without protest, meant that the redundancy exercise undertaken by the Defendant did not breach their terms of employment or contravene statutory provisions regulating their employment.

It is, therefore, my opinion that by accepting the redundancy package paid to them by the Defendant without protest they are estopped by conduct from suing against the Defendant per the endorsement on their writ of summons and I so hold.

In view of the foregoing the Plaintiffs are not entitled to the reliefs endorsed on their writ of summons so I accordingly dismiss their action and enter judgment for the Defendant.

The Defendant’s costs are assessed as GH¢3,000.00.

COUNSEL

MR. KWABENA DARKO ASIEDU FOR THE PLAINTIFFS; MR. J. A. AYITTEY FOR THE DEFENDANT.