KOJO KORANTENG AMOAKO V. STANDARD CHARTERED BANK

JUDGMENT

ASUMAN-ADU, J.

The Plaintiff, Kojo Koranteng Amoako who was a former employee of the Defendant commenced the instant action against the Defendant on 18th December, 2009 for the following reliefs:

a. Recovery of the sum of GH¢300,000.00 being severance package for the Plaintiff.

b. Interest on (a) above at the prevailing commercial bank rate from July 2009 to date of final payment.

c. An order directed at the Defendant to pay the Plaintiff balance of salary and allowances that were due to Plaintiff during his employment with the Defendant.

d. Interest on (c) above from April 2008 to date of final payment.

e. General damages for breach of contract.

f. Costs.

g. Any other reliefs the court may deem fit.

The Plaintiff entered appearance on 5th January, 2010 and went on to file its statement of defence on 20th January, 2010 denying Plaintiff’s claim. On 23rd March 2010, the Plaintiff filed a reply to the statement of defence and went on to file an application for direction on the same day in which the following issues were raised:

a. Whether the Defendant unilaterally imposed the sum of money contained in the letter dated 27th July, 2009 on the Plaintiff.

b. Whether the parties ought to negotiate the redundancy package with the Plaintiff.

c. Whether the Defendant underpaid the Plaintiff whilst the Plaintiff was in Defendant’s employment.

d. Whether the Plaintiff is estopped from raising the question of his underpayment whilst in the Defendant’s employment.

e. Whether the sum of money contained in the letter dated 27th July, 2009 to Plaintiff is discriminatory in relation to the Plaintiff vis-à-vis his colleagues who were affected by the GTO Restructuring.

On 7th April, 2010 the Defendant filed the following additional issues:

1. Whether the Plaintiff is entitled to the sum of GH¢300,000.00 claimed as payment for redundancy.

2. Whether the Defendant is bound by the recommendation of a consultant regarding what the Plaintiff is entitled in respect of the Plaintiff’s salary.

On 21st April, 2010 all the issues raised in the application for directions and the additional issues were set down by this court for determination.

Pursuant to an order of this court granted on 14th October, 2010, the Defendant filed an amended statement of defence on 19th October, 2010.

Plaintiff’s case is that he was employed by the Defendant on the 10th day of June, 1991 as Information Technology Officer and rose through the rank to the post of Regional Implementation Manager, Africa which is equivalent to Regional Manager in the Defendant’s employment. He was, therefore, a senior staff. Somewhere in March, 2009, the Plaintiff was informed by one Christopher Wingfield, the Defendant’s Chief Information Officer (CIO), Africa of restructuring of Group Technology and Operations (GTO) and the fact that his role in the Defendant’s employment would be affected by the said restructuring.

Consequently, the Plaintiff was served with a letter dated 28th March, 2009 captioned Notice of Separation which contained his redundancy package without prior negotiation with him as required by law. Plaintiff rejected the said redundancy package and complained to management of the Defendant as a result of which the Defendant convened a meeting to negotiate his redundancy package with him. At the said meeting the Defendant’s officers just informed Plaintiff about the contents of the letter. Plaintiff proposed a negotiable figure of GH¢300,000.00 as his settlement for his redundancy based on his salary, his age, length of service to the Defendant, loss of future employment and the need to lead a meaningful life.

The Defendant rejected Plaintiff’s proposal and served him with a letter dated 27th July, 2009 in which it unilaterally stated an amount of GH¢57,637.50 as his final payment for severance with his separation taking effect from 31st July, 2009. By a letter dated 30th July, 2009 written to Defendant by Plaintiff’s Lawyer, Plaintiff objected to the Defendant’s unilateral determination of his severance package and requested for further negotiation as same was not completed but the Defendant refused to negotiate further with him in order to ascertain the real quantum of Plaintiff’s severance award.

Whilst in the Defendant’s employment, the Plaintiff was paid salary and allowances lower than his rank and responsibilities which he protested and made attempts to get those anomalies corrected but to no avail. As Regional Implementation Manager for Africa, Plaintiff was entitled to be paid GH¢7,000.00 a month as his salary which was recommended by a Consultant engaged by the Defendant to review income levels in the Defendant’s employment. The Defendant’s deliberate refusal to pay him salary and allowances commensurate to his post, role, responsibilities and work is unlawful and a breach of his fundamental human rights.

Since senior staff workers have no written conditions of service, any severance award involving a senior staff must go through a complete negotiation for a fair award to be determined. In view of that the unilateral imposition of GH¢57,637.50 as Plaintiff’s severance package is unlawful.

The Defendant’s case on the other hand as captured by its amended statement of defence filed on 19th October, 2010 is that the Plaintiff’s redundancy package was negotiated between him and the Defendant at various meetings and the Defendant at all material times made serious and genuine attempts at reaching a consensus with the Plaintiff but all attempts at an agreement were thwarted by the Plaintiff’s unreasonable demands and behavior. The Defendant rejected the Plaintiff’s proposed figure of GH¢300,000.00 because the Plaintiff could not justify the basis on which he arrived at that figure which the Defendant considered exorbitant and unreasonable in all the circumstances.

The Defendant contends that in calculating Plaintiff’s redundancy package, it used a formula accepted by the union as a guide and same has been used by the Defendant in the computation of all redundancy packages for all its former senior managers. It denies that it unilaterally stated GH¢57,637.50 as the Plaintiff’s final payment for severance. The amount was the net payment to the Plaintiff after his liabilities to the Defendant had been deducted. The actual amount paid to the Plaintiff in respect of his redundancy package was GH¢124,497.92 but the Defendant had to deduct a loan amount owed to the Defendant by the Plaintiff leaving a balance of GH¢57,637.50.

According to the Defendant the Plaintiff has at all material times not shown genuine commitment at negotiating his severance pay and all attempts at reaching a compromise agreement had failed because the Plaintiff had taken an entrenched position, insisting on his GH¢300,000.00 demand, thinking that he can unjustly enriched himself by virtue of the Defendant’s unavoidable redundancy exercise.

The Defendant denies that the Plaintiff was paid salary and allowances not commensurate to his position. At all material times, the Plaintiff received salary that was commensurate to his position, role and responsibilities. It says the recommendation by the Consultant was only meant to be a survey and the Plaintiff knew or should have known that a recommendation is not binding on the Defendant and the Plaintiff is estopped from relying on the said recommendation.

The Defendant contends that Plaintiff’s claim is frivolous, vexatious and an abuse of the process of the court because there has been no genuine attempt by the Plaintiff to exhaust the Defendant’s internal mechanisms at resolving the issue of redundancy package.

Having reviewed the evidence before the court, I will go on to evaluate the evidence vis-à-vis the issues this court has been called upon to determine. Issues (a), (b), (e) of the application for directions and additional issue 1 relate to the redundancy payment so they will be taken together.

From the evidence before the court as presented by the Plaintiff, when he was declared redundant, he was given a letter captioned “Notice of Separation” dated 28th March, 2009 which was tendered in evidence as Exhibit A in which his redundancy package was stated as follows:

1) One and half months’ salary for each year of service.

2) One month’s salary in lieu of notice.

3) One month Basic Gross Salary for Retraining/Resettlement.

4) A Bonus of GH¢150.00 for every completed year of service.

5) Repatriation allowance of GH¢750.00

6) A loan write-off of 20%.

The Plaintiff contends that the Defendant did not negotiate with him the redundancy package to be paid to him as required by law so he rejected the package and insisted that there should be a negotiation between him and the Defendant. In view of that the Defendant had two separate meetings with him. The Defendant was represented by Laing Khunay, the Head of Human Resource of the Defendant Bank, Ama Owiredu and Paul Sagnia, the Acting Head of Shares Service Centre who joined the meeting by telephone. At the meeting the Plaintiff was asked to quote a figure as his redundancy package and he quoted GH¢300,000.00 which the Defendant’s representatives objected to and asked the Plaintiff to give an explanation which he did. In spite of the explanation given by the Plaintiff, the Defendant did not accept Plaintiff’s figure so the meeting was postponed.

On the second meeting, the Defendant was represented by the same people as the previous one. At the meeting they still asked the Plaintiff why he had quoted that figure and once again they rejected the figure and concluded the meeting by saying that the Plaintiff would hear from them. Following the said meeting between the Plaintiff and the Defendant, the Plaintiff was served with another letter by the Defendant dated 27th July, 2009 and captioned “SEPARATION” which was tendered in evidence as Exhibit B. The contents of the said letter are as follows:

“Further to our letter to you dated 28th March 2009 on the above subject and subsequent to discussions held with you on various dates in July, we would like to advise that an amount of GH¢57,637.50 is the final payment of your severance award. Your separation with the bank takes effect from 31 July, 2009.

The break-down of your severance award is as follows:

1) One and a half months’ salary for each year of service, the total of which should not exceed 45 months gross salary.

2) One month Basic Gross Salary for Retraining/Resettlement.

3) A Bonus of GH¢150.00 for every completed year of service.

4) Repatriation allowance of GH¢750.00.

5) A loan write-off of 20%.

Please note that the final payment of GH¢57,637.50 is net of all your outstanding loans as at 16th July 2009.”

The Plaintiff claims that the contents of Exhibit B were imposed on him by the Defendant since he never agreed with it on those contents. He, therefore, referred the matter to his counsel who wrote to the Defendant requesting that they go back to the negotiating table or the matter referred to the ADR Centre in Accra for arbitration. In its reply the Defendant insisted that at that stage of the negotiation it is unable to offer more than the amount stated in Exhibit B.

From the evidence before the court, attempts were made by the parties to negotiate the redundancy package of the Plaintiff. They could, however, not agree on the actual amount to be paid. Whilst the Plaintiff insisted on a package of GH¢300,000.00, the Defendant insisted on paying the Plaintiff an amount of GH¢57,637.50 after it had deducted the amount owed to it by the Plaintiff. The Plaintiff has, therefore, come to court for an order to compel the Defendant to pay him the figure he had quoted. So the question is whether the Plaintiff is entitled to be paid that amount by the Defendant.

Section 65 of the Labour Act, 2003 (Act 651) provides for how redundancy exercise should be undertaking in work places. 65(1) provides that when an employer contemplates the introduction of major changes in production, programme, organization, structure or technology of an undertaking that are likely to entail termination 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.

In the instant case the Plaintiff was informed of the intention of the Defendant to restructure the Group Technology and Operations (GTO) of the Defendant and the fact that the restructuring had affected his role in the Defendant’s employment. Considering the nature of the restructuring and the fact that it affected just about three officers, there was no point in involving the Chief Labour Officer of the exercise. However, the Plaintiff was entitled to be paid redundancy award which was to be negotiated between the Plaintiff and the Defendant. See Section 65 (2) of the Labour Act which provides as follows:

“Without prejudice to subsection (1) where an undertaking is closed down to 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, composition, in this section referred to as “redundancy pay”.

From the said provision the fact that the Plaintiff is entitled to be paid redundancy pay is not in doubt.

Section 65 (3) of the Act provides that 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.

Section 65 (4) of the Act goes on to provide that 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. This clearly shows that the redundancy pay agreed upon between the Plaintiff and the Defendant is subject to negotiations.

Section 65 (5) of the Act explains what should be done where there is a dispute on the quantum of redundancy award to be paid to the redundant worker. It provides that any dispute that concerns the redundancy pay and the terms and conditions of payment may be referred to the National Labour Commission by the aggrieved party for settlement, and the decision of the Commission shall subject to any other law be final.

In the current case the evidence clearly shows that attempts were made by the parties to negotiate the quantum of the redundancy award to be paid the Plaintiff. However, each of them went to the negotiating table with a hard stand. The Plaintiff insisted that he was entitled to be paid GH¢300,000.00 as redundancy award and the Defendant also insisted that it was ready to pay GH¢57,637.50 to the Plaintiff as redundancy award. There was, therefore, a dispute on the amount to be paid to the Plaintiff. since there was a dispute, by the provision in the Labour Act the matter should have been referred to the National Labour Commission for determination and not to rush to court at this stage. This court has no jurisdiction to determine the case without given the parties the opportunity to negotiate on the amount to be paid.

SGD

ASUMAN-ADU KWABENA J

JUSTICE OF THE HIGH COURT

COUNSEL

MR. GEORGE ABOGAH FOR THE PLAINTIFF/RESPONDENT

MR. YAW ESHUN FOR THE DEFENDANT/APPLICANT