REPUBLIC V. NLC EX PARTE MANTRAC GHANA LTD

JUDGMENT

DEKYEM, J.

Applicant is a company authorized to carry on business in Ghana. 1st Respondent  is a creature of statute established under section 135 of the Labour Act, 2003 (Act  651) mandated inter alia to settle industrial disputes. 2nd Respondent is a Labour  Union with some of Applicant’s employees as its members. This judgment is in  respect of application praying the court for an order for judicial review by way of  certiorari to quash an arbitration award on grounds that:

(i) the arbitration panel  exceeded its jurisdiction and

(ii) that the issue of jurisdiction may be raised at  anytime.  

The evidence placed before the court indicate that, following a deadlock at  collective agreement negotiation between 2nd Respondent and Applicant, parties  submitted to voluntary arbitration and consequently opted for a panel of three  arbitrators. Parties were heard and the panel delivered the award. It is against the  award that Applicant articulated its grounds for same to be quashed in the  following paragraphs of the affidavit in support: 

10. That one of the reliefs granted in part of the award, is an order that  applicant must pay bonuses to the non-management workers (unionized workers) for the year 2013 and 2014 and thus increasing remuneration  against the policy of the employer. That it follows that the arbitration panel  exceeded their jurisdiction. The arbitrators also increased the  Weekend/Public Holiday Allowance also contrary to section 8 of the Labour  Act, 2003 (Act 651) which gives the employer the right to formulate policies,  execute plans and programmes, to set targets. The award also made  changes in policy for the company by changing the targets to be used for  getting bonuses and made findings of discrimination contrary to law. Thus  the arbitrators acted beyond their jurisdiction. Annexed as exhibit A is a  copy of the award. 

18. That I am informed by Counsel and verily believe same to be true that the  jurisdictional error committed by the arbitrators cannot be cured by the  participation of the parties in the arbitration. 

The issues that fall for determination are

(i) whether or not the issue of  jurisdiction can be cured by the participation of parties in the arbitration process  and

(ii) whether or not the arbitrators exceeded their jurisdiction. 

On whether the issue of jurisdiction can be cured by participation of the parties in  the arbitration process; Applicant’s Counsel submitted that the issue of  jurisdiction can be raised at any time on the principle that, time does not run on  an act that is a nullity, citing among others the case of Mosi v. Bagyina [1963] 1  GLR 337 SC. The principle in the Mosi case was the scope of the power of the  court which gives a void judgment to set aside its own judgment. Acquah J. (as he  then was) stated in R v. Asogli Traditional Council and others; Ex parte Togbe  Amorni VII (No. 2) [1992] 2 GLR 367 – 367 that,

“…if the principle in Mosi v. Bagyina provided for a blanket limitless time for setting aside void judgments,  then the principle must apply in respect of whatever procedure one adopts to set aside such void judgments. And for that matter one need not even obtain leave  when he comes by prerogative orders. But certainly it does not apply to appeals.  To extend the limitless time outside the very court which gave the void judgment,  would, in my view, be doing violence to the procedural rules of those courts. To  my mind, therefore, the proper scope of the principle in Mosi v. Bagyina is that  where a court has given a judgment or made an order which is void or  unwarranted by any rule of law, that very court which delivered the void judgment  has an inherent jurisdiction to set aside its void order, either suo motu or on the  application of the party affected. And in the exercise of this inherent jurisdiction,  lapse of time is no bar to setting aside the void judgment.” (emphasis added).

In  the present application, the High Court has not given any void judgment which  Applicant is seeking to have same set aside thus the principle in the Mosi case (supra) would not apply. 

Section 58(4) of the Alternative Dispute Resolution Act, 2010 (Act 795) provides  that, an application to set aside an award may not be made after three months  from the date on which the applicant received the award unless the Court for  justifiable cause orders otherwise. Paragraph 9 of the affidavit in support  indicates that, an award following the arbitration process was delivered by the  panel on 31st August, 2015. Applicant therefore had three months thereafter to  make an application to set aside the award. The records show that, the instant  application was made on 22nd February, 2016, about six months after the award. Applicant did not demonstrate any special circumstances to warrant an extension  within which to bring the instant application. Further, section 25 of Act 795 on  objection to jurisdiction provides that:

“Objection to jurisdiction  

25. (1) A party that intends to object to the jurisdiction of an arbitrator shall  do so before taking the first step in the proceedings to contest the case on  its merits.  

(2) The appointment or the participation in the appointment of an  arbitrator by a party is not a bar to that party raising an objection on  jurisdiction.  

(3) Subject to subsection (1), a party who in the course of arbitral  proceedings intends to raise an objection that the arbitrator is exceeding  the arbitrator's jurisdiction shall do so immediately after the matter alleged  to be beyond jurisdiction is raised.  

(4) Despite subsections (1) and (3), the arbitrator may entertain an  objection made later than the prescribed time if the arbitrator considers  that there is sufficient justification to do so.” 

It follows from the above that, a party who wishes to raise an objection that the  arbitrator has exceeded his or her jurisdiction shall do so immediately after the  matter alleged to be beyond jurisdiction is raised. Or a party who intends to  object to the jurisdiction of an arbitrator does so before taking the first step in the  proceedings to contest the case on its merits. The objection is made to the  arbitrator who considers the objection and rules upon it. There is no  demonstration that, following the delivery of the award on 31st August, 2015,  immediately thereafter, Applicant raised an objection to jurisdiction with the  arbitration panel. There is also demonstration that, when parties had agreed  issues, Applicant raised any objection as to jurisdiction but participated fully to  the end of the process. The Supreme Court in Boyefio v. NTHC Properties Limited [1997-98] 1 GLR 768-786 (holding 3) held that, where an enactment had prescribed a special procedure by which something was to be done, it was that  procedure that was to be followed. 

Section 27 of Act 795 provides that,

“(a) party who takes part or continues to take  part in an arbitral proceeding, knowing that,

(a) the arbitrator does not have  jurisdiction;

(b) the proceedings are improperly conducted;

(c) the arbitration  agreement or this Act has not been complied with; or

(d) there is an irregularity in  respect of the arbitrator or proceedings and who fails to promptly or within the  time specified in the arbitration agreement or under this Act to object to the  proceedings shall be deemed to have waived the right to raise the objection.” 

In the light of the above, the court will hold that, Applicant waived its right to  object to the jurisdiction of the panel when it participated fully in the arbitral  process and also failed to raise any objection within the three months’ period  stipulated by Act 795. It is not for nothing that statutes set time limits within  which specific things ought to be done. 

The holding above notwithstanding, I would like to deal with the second issue  which is whether or not the arbitrators exceeded their jurisdiction. In other words  did the panel lack the mandate to deal with the matter at issue with the resultant  award? It was argued on behalf of Applicant that, part of the award, ordering  Applicant to pay bonuses to non management workers (unionized workers) for  the year 2013 and 2014, thus increasing remuneration was against the policy of  the employer. Applicant’s Counsel submitted that, per section 8(b) of the Labour  Act, 2003 (Act 651), emoluments are the prerogative of the employer and same  cannot be the subject of arbitration. He argued further that, going to arbitration does not mean Applicant agreed to confer jurisdiction where the law does not  confer same. Section 8(b) of Act 651 provides that, “the rights of an employer  include the right to formulate policies, execute plans and programmes to set  targets” The provision does not speak of emoluments being the prerogative of  the employer, rather section 9(b) of Act 651 which outlines the duties of the  employer provides inter alia that,

“(W)ithout prejudice to the provisions of this Act  and any other enactment for the time being in force, in any contract of  employment or collective agreement, the duties of an employer include the duty to  pay the agreed remuneration at the time and place agreed on in the contract of  employment or collective agreement or by custom without any deduction except  deduction permitted by law or agreed between the employer and the worker.” (Emphasis added).  

It is noted that, what an employer is duty bound to pay is the agreed  remuneration implying that same is agreed by both employer and employee or  their representative on their behalf, eroding the very element of exclusive right. It  is unfathomable to think that, in an employment contract, one party would have  the prerogative to impose the emolument without the option to accept or refuse  by the other party to the contract. Contents of a collective agreement also show  that, the legislature did not intend that, emolument should be the prerogative of  the employer. Section 96 of Act 651 provides inter alia that, “…a collective  agreement may include provisions on the following matters: (c) the remuneration  and the method of calculating the remuneration of the workers; (g) the principles  for matching remuneration with productivity…..” Parties to an employment  contract have the right by way of the collective agreement to not only negotiate and agree on emolument but also the principles for matching remuneration with  productivity such as salaries, commission, bonuses, targets and the like. These are clear demonstration that, issues regarding emoluments are not the prerogative of  the employer sanctioned by statute so as to exclude it from the scope of  arbitration. Where the legislature intended a right not to be compromised, it was  made clear in the provisions of the statute such as any agreement to forgo annual  leave would be void. 

In the instant application, parties were negotiating a collective agreement which  reached a deadlock hence the submission to voluntary arbitration. The parties  agreed on the issues to be settled by the panel giving the scope of jurisdiction. Applicant was ably represented by its Counsel (Applicant Counsel herein). Parties  made their respective submissions which were considered by the panel before  making the award. The award covered the issues settled for determination. The  decision of the arbitrator or a majority of the arbitrators shall constitute the  award and shall be binding on all the parties. Section 50 of Act 795 mandates  that, an arbitrator may within the scope of the arbitration agreement grant any  relief that the arbitrator considers just and equitable including specific  performance. I am of the opinion that, that was what the arbitrators did in  formulating the award. Subject to the right of a party to set aside an award, an arbitration award is final and binding as between the parties and any person  claiming through or under them. The award which is unanimous is thus binding on  the parties. 

In the light of the foregoing, the application is refused. Two thousand Ghana Cedis  is awarded in favour of Respondent.

[SGD] 

Justice Gifty Dekyem (Mrs) 

Justice of the High Court

Labour Division I, Accra

COUNSEL

Martin Kpebu ESQ for Applicant (holding brief of Willie Fugar)

Afiba Amihere ESQ for 1ST Respondent (Absent)