IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL
ACCRA - A.D 2018
SAMUEL M. K. ADRAH - (Plaintiff/Respondent)
ELECTRICITY COMPANY OF GHANA - (Defendant/Appellant)
DATE: 22 ND FEBRUARY, 2018
CIVIL APPEAL NO: H1/149/2017
JUDGES: V. D. OFOE JA (PRESIDING), SENYO DZAMEFE JA, MABEL AGYEMANG (MRS.) JA
GODWIN AKPADIE FOR PLAINTIFF/RESPONDENT
GEMIEMA IRRE ARYERE FOR DEFENDANT/APPELLANT
The plaintiff/respondent hereinafter referred to simply as the plaintiff issued this writ against the defendant/appellant (defendant’s) for the following claims:
An order that the severance pay be amended to include plaintiff’s salary at the current grade of SG2 Notch 14, utility allowance and car maintenance from July 2010 to May 2011.
Cash payment in lieu of 90 litres of petrol per month for the period October 2010 to May 2011.
Plaintiff’s outstanding provident fund entitlements from January, 1996 to May 2011.
Plaintiff’s 15 years long service award.
Interest on the total sum till date of final payment.
Any other orders that the court may deem fit.
The plaintiff in his statement of claim averred he joined the defendant company as a Technician Trainee in January 1996 and rose through the ranks to the position of Senior Technician Engineer in September 2003. In 2008, the defendant embarked on a productivity screening exercise and he took the opportunity to part ways with the defendant company.
Plaintiff said subsequent to that he received a memo dated 21st May 2010 from the defendant requesting him to proceed on a 249 days outstanding leave with effect from 24th May 2010 and to resume work on 20th May 2011 to which he complied. Plaintiff said while on leave, he received another memo from defendant dated 24th June 2010 severing his relationship with the defendant with effect from 1st July 2010 and also informing him that he was entitled to the sum of Gh¢21,027.39 as his severance package.
Plaintiff averred that after this letter his name was taken off the payroll, hence he did not receive his salary and allowances due him during his leave from 1st July 2010, save 90 litres of petrol he received from July to September. It is the plaintiff’s case that the defendant had denied him the benefits of his accrued leave and other entitlements during the period of his249 days leave, namely salary, utility allowances, car maintenance allowance from July 2010 to May 2011 and 90 litres of petrol per month from October 2010 to May 2011.
Plaintiff said he petitioned the defendant company on two occasions about his leave entitlements and on 26th August 2010 the defendant acknowledged that it did not calculate the leave entitlements in the in the severance package. He again petitioned the defendant in a letter dated 20th September 2010 stating his right to his earned leave entitlements but the defendant refused to respond to the letter nor address plaintiff’s concerns. The plaintiff says that he has suffered mental and psychological anguish as a result of the defendant’s lack of concern to his plight and their apparent disregard for his rights hence this suit.
The defendant in their defence averred in 2009 when their Manual of Staff Regulations and Conditions of Service for Senior Staff came into effect, it advised all its staff including the plaintiff who had accumulated leave days to go on leave before the end of 2011 because the accumulation of the leave violated the Labour Act 2003 (Act 657). Further, all those who could not take the leave before severing relationship with the defendant were deemed to have forfeited the remainder of the leave because of the constraint imposed by the aforementioned Labour Act.
The defendant contends that the plaintiff, knowing very well that his retrenchment was very incumbent refused or failed to apply to take his accumulated leave as advised by them until he was ordered to go on leave. The defendant aver that the plaintiff’s severance package included payment of two months’ salary in lieu of notice, the provident fund contribution and accrued interest therein minus the plaintiff’s indebtedness to the defendant. It is the defendant’s case that the plaintiff after voluntarily putting up his name for retrenchment, he was disabled from repudiating the agreement which was executed on his behalf by the Workers Union.
The defendant states further that the plaintiff ceased to be an employee of the defendant with effect from 1st July 2010 and therefore not entitled to any other benefits apart from the severance package which included all his legitimate entitlements. The defendant said the 90 litres fuel given the plaintiff from July to September was a gross oversight on their part and the plaintiff is liable to refund the monetary value. The defendant said as a policy it does not commute accumulated leave to cash because to do so will violate the Labour Act, 2003 (Act 657).
The defendant contends that the plaintiff is not entitled to any other benefits apart from the severance package which contained all the plaintiff’s legitimate entitlements.
The defendant’s allege that the Manual of Staff Regulations and Conditions of Service for Senior Staff which regulated the Conditions of Service of the plaintiff when he was an employee of the defendant provides that annual vacation leave shall be compulsory. The defendant therefore does not allow leave to accumulate or pay cash in lieu of accumulated leave because to do so will be contrary to the aforementioned collective agreement.
The defendants admit they did not calculate the annual leave entitlement of the plaintiff because paying cash in lieu of outstanding leave will violate the Labour Act 2003 (Act 657) and breach the Conditions of Service for Senior Staff. Defendant also denied paragraph 19 of the statement of claim saying if the plaintiff suffered mental and psychological anguish, same was self-inflicted because he elected to take part in the productivity screening exercise and subsequently, without any good reason whatsoever, refused to collect his severance package and therefore not entitled to his claim.
The plaintiff in his reply to the defence said it is not true he failed to take his accumulated leave as defendant is alleging but rather in compliance with the directive and well before the end of 2011 deadline stipulated by the defendant, he applied for his accumulated leave of 249 days in December 2009 but defendant granted only 30 days out of the 249 days. He again applied for his outstanding leave in 2010 but was advised by the Human Resource Manager to wait due to their ongoing productivity screening exercise.
While he was waiting as advised he had a memorandum from the Acting Regional Director, Ashanti West to proceed on his 249 days accumulated leave with effect from 24th May 2010 and to resume work on 20th May 2011. That he duly complied and while on leave received the memorandum and discharge letter severing his relationship with the defendant company with effect from 1st July 2010.
The plaintiff also denied being a member of the Workers Union but rather Senior Staff Association and so the Workers Union cannot negotiate on his behalf as the defendant states.
Whether or not plaintiff refused/failed to take his accumulated leave before the end of the year 2011 as directed by Defendant Company.
Whether or not the severance package is a lump sum figure made up of two months’ salary in lieu of notice, provident fund and interest minus indebtedness to Defendant Company.
Whether or not accumulation of leave violates the Labour Act.
Whether or not termination of employment results in forfeiture of outstanding leave under the Labour Act.
Whether or not plaintiff is no longer entitled to his accrued leave benefits because of the termination of employment with the defendant Company.
Whether or not it is against the policy of Defendant Company to commute accumulated leave to cash.
Whether or not commutation of outstanding leave to cash is a breach of the Regulations and Conditions of Service for Senior Staff of the Defendant Company.
Any other issues determine on the pleadings.
The trial court in its judgment held that notwithstanding DW1’s testimony and Exhibit ‘H’, the evidence is abundantly clear that the severance package of the plaintiff did not include cash in lieu of outstanding leave – [page 125 ROA]. The court found that the defendants’ reason for its failure to pay plaintiff cash in lieu of his outstanding leave has not been made out as the provision it sought to rely on effectively frowns upon such conduct. Accordingly, defendant’s contention is not upheld as it is without legal basis.
The trial court held that “where in a collective agreement there are express provisions with respect to the terms and conditions for termination of the contract of employment which are more beneficial to the worker than the statutory provisions of the Labour Act, then the former prevails”.
That in the instant case the provision of the collective agreement between the parties appear to be more generous and beneficial to plaintiff than just a negotiated redundancy pay. Although the exercise which consequently led to the separation of the parties was termed productivity or performance screening exercise, its characteristics points to the fact that it as a redundancy situation. [page 126 of ROA].
The court held that the collective agreement being the contract of employment between the parties herein is explicit on the entitlements in the event of redundancy as follows:
Severance award negotiated with the Senior Staff Association.
Payment under the staff Provident Fund.
Commutation of any outstanding and/or current leave to cash.
Transportation expenses to enable staff relocate to the place of first employment or hometown.
This makes the plaintiff not only entitled to the negotiated package but among others commutation of his outstanding leave to cash. Plaintiff was enjoying his leave which was to end on 20th May 2011 when his employment was severed effective 1st July 2010.He was thus entitled to have his remaining leave from 1st July 2010 to 20th May 2011 commuted to cash. Issues a, b, c, d and e were all resolved in plaintiff’s favour. [page 127-ROA].
The trial court was also of the view that the condition of service which was in force at the time the parties severed relationship was exhibit “A” and not Exhibit “2” which came into force from 2012 when plaintiff had long ceased to be an employee of the defendant company. The plaintiff, the court held, had adduced sufficient evidence to prove that in termination of employment with defendant, accumulated leave is commuted to cash. Defendant failed to adduce sufficient evidence to prove its assertion that it is illegal or against defendant’s policy to commute to cash accumulated leaves.
The court also held that the plaintiff is not entitled to any fringe benefits as petrol, utility and car allowances when the employment relationship was severed. Plaintiff is thus not entitled to those reliefs and therefore liable to refund the 90 litres of petrol given him in error. The court held the plaintiff is entitled to the negotiated severance package of sixteen (16) months’ salary, payment of his Provident Fund, GH¢5400 transportation expenses to his home town and commutation of his outstanding leave into cash from 1st July 2010 to 20th May 2011, which makes it approximately 10.6 months’ salary.
The defendants dissatisfied with this judgment filed this appeal on the following rounds:
The learned judge erred when she gave judgment in favour of the plaintiff/respondent since the plaintiff/respondent did not have the capacity to bring the action as an individual to challenge a collective negotiated settlement under a redundancy exercise.
The learned judge erred when she failed to avert her mind to the fact that the plaintiff’s accumulated leave at the time he was compelled to take his leave was largely as a result of his refusal to obey lawful instructions of the defendant to take his accumulated leave as instructed.
The learned trial judge erred in her interpretation of Sections 30 and 31 of the Labour Act, 2003 (Act 651) when she held that cash could be lawfully paid in lieu of accumulated leave irrespective of those provisions.
The learned judge erred when by her judgment, she sought to impose a new agreement on the parties to the redundancy negotiations when the redundancy agreement itself was not in issue.
The learned judge erred when she awarded interest on the negotiated severance package, outstanding provident fund and transportation expenses, when those amounts had always been available for the plaintiff to claim/receive but for his own refusal to do so.
That the judgment is against the weight of evidence.
Further grounds of appeal would be filed on receipt of the judgment.
Relief sought is for this court to set aside the judgment of the High Court and giving judgment in favour of the defendant against the plaintiff.
Ground F - The judgment is against the weight of evidence:
The appellant is contesting the judgment of the trial court on the omnibus ground that the judgment is against the weight of evidence on record. And what is required of the appellate court when an appellant bases his dissatisfaction with the judgment of the trial court on that ground is now trite. The appellant on this ground is alleging that the trial judge failed in using certain pieces of evidence in his favour which would have tilted the judgment in his favour or used certain pieces of evidence against him that made the judgment go against him.
See (i) Djin vrs. Musah Baako [2007/08] SC GLR 686,
(ii) Tuakwa vrs. Bosom [2001/2] SC GLR 6,
(iii) Owusu-Domena vrs. Amoah [2015-16] SC GLR 790.
This means the appellate court is being called upon to review the entire record to find out whether the conclusion of the trial court is reasonably supported by the evidence on record. In doing so, the appellate court must restrain itself against disturbing findings of fact made by the trial court even if the appellate court would have come to a different conclusion, unless the findings of fact made by the trial court wholly lacked support from the evidence on record. This is so because the trial court had the advantage of following the proceedings and watching the reactions and demeanour of the parties and their witnesses.
This ground also makes it imperative for the appellant to demonstrate to the court the lapses he is complaining about in the judgment.
Counsel for the appellant failed to make submission on the ground “F”. He just repeated the ground in his submission and said the entire decision is flawed and same ought to be set aside in its entirety. Albeit it is our duty to review the entire record of proceedings to find out whether the trial judges’ conclusions are reasonably supported by the evidence on record.
The appellant in this ground attacked the capacity of the plaintiff to bring the action as an individual to challenge a collective negotiated settlement under a redundancy exercise.
Capacity to institute an action is a precondition to the institution of an action in court. Capacity is fundamental and goes to the root of every case and where the capacity of a party is challenged, especially the plaintiff, such as in the instant appeal, the court must first resolve that issue because a person without capacity cannot be given a hearing even though he may have an iron cast case.
See Yorkwa vrs Duah [1992/3] GBR 278.
Counsel for the appellant in his submission argued that benefits that were to be enjoyed by all the staff under this retrenchment programme was negotiated by the Senior Staff Association at the standing joint negotiating meeting and therefore all staff including the plaintiff/respondent were bound by the agreement entered on their behalf.
This argument was objected to by counsel for the respondent who submits that the plaintiff has been consistent in his evidence that apart from the redundancy or severance packages the Senior Staff Association has no right or mandate to negotiate on his behalf any other there under. Plaintiff made it abundantly clear that his provident fund could not be a subject of negotiation at all neither could his computation of outstanding leave into cash nor transportation expenses. In cross examination respondent was asked [page 76 ROA]:
Q -Mr. Adrah, do you agree that as a Senior Staff of ECG you are bound by the decision of SSA.
A -My lord I am not bound by the decision of SSA but I am bound by a regulation which is normally referred to as SSA manual so my lord nobody can decide behind the rules and regulations of the company.
Q -Mr. Adrah I put it to you that your retrenchment or compensation packages was bargained by the SSA and some other persons within the company and the reason why payment of accumulated leave was not included was because members of that committee which included representatives of the SSA knew very well that paying monies for accumulated leaves was unlawful per the labour act even though the SSA manual provided for it and so it was in the light of this that the circulars encourages staff who had accumulated leaves were given out.
A -My lord that is totally untrue; if what is in the SSA manual is unlawful then my lord the company is a lawless company. First my lord exhibit A with your permission I read (he reads) and paragraph 12, my lord it is only the first point that is severance award negotiated with the SAA that is the only thing to be negotiated with any representative of the senior staff, number 2,3 and 4 can be negotiated. Nobody can negotiate my provident fund I have it already, my accumulated leave if I have it or transportation to my hometown, if I am in my hometown, I can’t take any transportation so this 2,3, and 4 are all non-negotiable except the first one. My lord computation of outstanding leave is not only for redundancy, paragraph 1 point 15,16 17, 3 point 5 point 5 and 3 point 19 my lord all talks about computation of leave to cash. With your permission 1.15 I will like to read (he reads) 1 point 16, 1 point 17 all these are benefits and outstanding leaves to be computed to cash.
The respondent insisted that the Senior Staff Association had no right to negotiate his provident fund, outstanding leave and transportation to his hometown except the severance package.
It is trite when an opponent in a civil case denies the allegation of the other, the onus shifted onto that party to lead positive and cogent evidence to controvert the denial. Section 12-14 of NRCD 323. In the instant appeal the onus shifted onto the appellant to establish this allegation that the respondent was bound by the decision of the committee on his emoluments and therefore had no capacity to institute this case. They do not have to go into the box to repeat same averments on oath.
In Re Ashalley Botwe Lands, Adjetey Agbosu & Ors vrs Kortey Ors [2003/4] SC GLR
The burden of producing evidence in any given case was not fixed but shifted from party to party at various stages of the trial, depending on the issues asserted and or denied.
A party whose pleading raises an issue essential to the success of the case assumes the burden of proving such an issue, it was incumbent on the party to have produced admissible and credible evidence so as to avoid a ruling against him and the absence of that proof will attract or earn such a ruling.
See also Ababio vrs Akwasi II [1994-95] GBR III 174.
We are of the opinion that the respondent was able to establish the fact that the committee set up was only to negotiate their severance package and not the other established entitlements as according to the Senior Staff Association Manual. The manual in effect was the 2009-2011 manual which covered the Conditions of Service for the Senior Staff Association. The appellants saying even though the Senior Staff Association manual said leave allowance could be commuted into cash but is against the Labour Law is neither here nor there. ECG laid their bed and must lie in it.
We hold that the respondent has the capacity to institute this action since his complaint is not about the severance package but other entitlements due him which were going to be denied him. That ground of appeal fails and same is dismissed.
The learned judge erred when she failed to avert her mind to the fact that the plaintiff’s accumulated leave at the time he was compelled to take his leave was largely as a result of his refusal to obey lawful instructions of the defendant to take his accumulated leave as instructed.
There is no evidence on record that the respondent was instructed nor ordered to take his accumulated leave which he disobeyed as the appellant is alleging. We cannot tell from the evidence on record how the respondents leave days became accumulated.
There is also no evidence on record that the plaintiff was queried nor questioned as to why he does not take his annual leave. The respondent told the court he did not take his leave because of lack of staff and because of his job. The appellants failed to controvert this explanation given by the respondent. The appellant never tendered any letter from the company to the respondent compelling him to take his annual leave which he disobeyed as alleged. The law is clear, he who alleges must prove especially when the opponent denies same.
· Bisi & Ors vrs Tabiri @ Asare [1987/8] 1 GLR 360
· George vrs. Hlodjie Pt III  3 MLRG 179.
· Section 11 of Evidence Decree NRCD 323.
The maxim is clear he who asserts a matter must prove it, but he who denies it need not disprove – “ei qui affirmat, non ei qui negat, incumbit probatio”. – Fynhout Production Ltd vrs. Kwayie & Anor  1 GLR 475.
When a party leads evidence which is not challenged by his opponent in cross examination, nor does the opponent tender evidence to the contrary, those facts deposed to are deemed to have been admitted by the opponent and must be accepted by the court.
The appellants failed to lead any evidence to establish their assertion that the respondent’s leave accumulation was largely as a result of his refusal to obey lawful instructions of the defendant to take his leave. If they allege the respondent was instructed, there must be some evidence to that effect. Failure to produce any such evidence, that ground of appeal fails and same is dismissed.
The learned trial judge erred in her interpretation of Sections 30 and 31 of the Labour Act, 2003 (Act 651) when she held that cash could be lawfully paid in lieu of accumulated leave irrespective of those provisions.
Section 30 of the Labour Act is entitled “Termination of Employment not to affect Leave Entitlement Earned” & provides that (1) where the employment of a worker is terminated, the worker is entitled to annual leave in proportion to the period of service in the calendar year.
(2) The worker shall not be deprived of any other grants or awards to which the worker is entitled including payment in lieu of notice of termination”
Section 31 of the Labour Act provides “any agreement to relinquish the entitlements to annual leave or to forgo such leave is void”
Our understanding of these provisions are that the termination or severance of the employment relationship does not affect earned leave. We are of the opinion that a worker’s appointment or employment can always be terminated for stated reasons but the law is clear that does not affect his earned or accrued leave prior to the termination.
The learned trial judge cited Taylor JSC in Nartey-Tokoli & Ors vrs. Valco (NO.2) [1989-90] 2 GLR 341 that “when the legislature has devised mandatory and imperative provisions for the protection of any employee or any person, an argreement that the provisions can be lawfully ignored is one that a common law judge should not countenance. It is an invidious and dangerous argument subversive of the legal order”.
Exhibit B & C clearly show that management of ECG are aware of the respondents accumulated leave days. The Human Resource Manager, Ashanti Region himself calculates the days and put same on record. Exhibit D is the official request by the appellant to the respondent to proceed on 249 days leave with effect from 24th May 2010 and to resume 20th May 2011.
Section 3.5.1of the Senior Staff Manual on Annual Leave states “(a) Annual leave is compulsory and all staff shall be expected to go on annual vacation leave. Paid annual leave of 30 days shall be granted to all Senior Staff every year. Leave is however granted at the convenience of the company”.
Exhibit “IA” tendered by the appellant clearly shows that management of 1st defendant company was aware of staff with accumulated leave days. Management produced a table to take care of all such accumulations. Those with 201-300 days, for example the respondent, must enjoy all the days by December 2011. The respondent applied and took his leave by 24th May 2010. He was thus within the stipulated period. The exhibit states “Managers should ensure that staff who are due for retirement take their leave before they proceed”.
While the respondent was on leave he received a letter terminating his employment with the defendant. We are of the opinion that since respondent was on leave legitimately before the termination, coupled with the fact that he earned the leave prior to the termination he is entitled to be paid cash in lieu.
Respondent referred the court to Section 1.12 of the Senior Staff Manual on redundancy. It states among others that “(iii) Commutation of any outstanding and/or current leave to cash”.
Section 1.15 also states “that staff who retire or resign from the service of the company shall: - (iii) take current leave or have it commuted to cash”.
Section 1.16 on Dismissal states, “staff in this situation have their outstanding leave and any proportionate current leave commuted to cash”.
Thus even those dismissed from the company shall have their outstanding leave commuted to cash.
Vacation of post, Section 1.17 also talks of “commutations of outstanding leave and proportionate current leave (if any) to cash”.
These are provisions in the Senior Staff Manual of the defendant company confirming the plaintiff’s assertion that leave could be commuted into cash payment contrary to the appellant’s position that it cannot be done and that its contrary to the Labour Act. ECG cannot play hot and cold at the same time. They cannot provide for same in the Senior Staff Manual and again say it is against the Labour Law. It is contradictory. The company’s negligence and mistakes cannot be visited on the innocent employee.
We hold that the trial judge was right in holding that respondent’s accumulated leave days be commuted into cash. We shall not disturb that finding by the trial court and that ground of appeal fails and same is dismissed.
That the learned judge erred when she awarded interest on the negotiated service package, outstanding Provident Fund and transportation expenses when those amount has always been available for the plaintiff to claim/receive but for his refusal to do so.
The trial judge in the judgment awarded interest at the commercial rate on all the amounts from 1stJuly 2010 till date of final payment.
We think the award of interest is the courts discretion taking several factors into consideration. For example, the court never awarded cost after the trial to the plaintiff. The court may also take the delay in payment of the money and obviously the value of the money would have reduced due to inflation as we know in Ghana. We think the trial court was fair in awarding interest on the monies due the plaintiff. The trial judge never erred in so doing.
The judge exercised that discretion fairly and judiciously and same in upheld and that ground of appeal dismissed.
On the totality of the evidence before us, we are of the candid opinion this appeal lacks merit. It is therefore dismissed in its entirety as unmeritorious.
(JUSTICE OF APPEAL)
I have read the lead judgment of my brother His Lordship Senyo Dzamefe and I am in agreement with the conclusion that the appeal be dismissed. I present my supporting opinion.
Plaintiff was a staff of the defendant company who took advantage of a staff productivity screening exercise implemented by the defendant company to severe his relationship with the defendant company. The facts of the case can be briefly stated as follows:
On the 21st of May 2010 plaintiff received a memo requesting that he proceeded on his outstanding leave of 249 days with effect from the 24th of May 2010 and to resume 20th May 2011. A month within his leave period ie on the 24th of June 2010 he had another letter severing his relationship with the defendant company with effect from the 1st of July 2010 and offering him a severance pay of Gh¢21,027.39. This letter did not only cut short his leave but offered a severance pay which plaintiff found unacceptable. His petition to the defendant to review this monetary award was rejected. This led him to the trial court with a claim couched as follows:
“ (a) An order that the severance pay be amended to include Plaintiff’s salary at the current grade of SG2 Notch 14, utility allowance and car maintenance from July 2010 to May 2011.
b. cash payment in lieu of 90 litres of petrol per month for the period October 2010 to May 2011.
c. Plaintiff’s outstanding provident fund entitlement from January, 1996 to May, 2011.
d. Plaintiff’s 15 years long service award.
e. Interest on the total sum till date of final payment.
f. General damages
h. Any other cost that the court may deem fit”.
Paragraph 11 and 12 captures in substance plaintiff’s case. I will quote the paragraphs:
“11. Plaintiff says his name was taken from the payroll, hence he did not receive his salary and allowances due him during his leave from 1st July 2010 save 90 litres of petrol he received from July to September
12. Plaintiff says that defendant company has denied him the benefits of his accrued leave and other entitlements during the period of his 249 days leave, namely salary, utility allowance, car maintenance allowance from July 2010 to May 2011 and 90 litres of petrol per month from October 2010 to May 2011”.
By these pleadings the plaintiff claims he was entitled to all the benefits mentioned therein during the accumulated leave period which should exceed the payment of GH¢21,027.39 to him.
The defendant company admitted that the amount of GH¢21,027 paid the plaintiff did not include any payments within the accumulated leave period because every staff was enjoined to take his leave compulsorily and not accumulate as demanded by the Manual of Staff Regulations and Conditions of Service for Senior Staff. Also any such payment will be against the Labour Law. This view of the defendant is captured in paragraph 14 and 15 of the statement of defence. It reads:
“14. The defendant says the Manual of Staff Regulations and Conditions of Service for Senior Staff which regulated the conditions of service of the plaintiff when he was an employee of the defendant provides that annual vacation leave shall be compulsory. The defendant therefore does not allow leave to accumulate or pay cash in lieu of accumulated leave because to do so will be contrary to the aforementioned collective agreement.
15. Paragraph 16 is admitted. In explanation, the defendant says that parties to the negotiation on the severance package did not calculate the annual leave entitlement because paying cash in lieu of outstanding leave will violate the Labour Act, 2003, (Act 657) and breach the Manual of Staff Regulations and Conditions of Service for Senior Staff”.
The defendant avers that what was paid the plaintiff included his provident fund entitlements. And that on the 1st of July 2010 the plaintiff ceased to be an employee of the defendant company and could not therefore be entitled to any salaries.
The plaintiff and the Industrial Relations Manager of the defendant company, Mr. Steven Opuni Sekyire, were the only persons who testified during the trial. I will recount in brief their evidence relevant to the determination of this appeal.
The evidence of the plaintiff was that whether a staff of the defendant company could take the whole of his annual leave entitlement for the year or not was a discretion of the defendant company. The staffs’ duty was only to state the month they wanted to go on leave in the year but the leave duration was a determination of the defendant company. Plaintiff referred the court to section 1.12 of the Senior Staff Conditions of Service, tendered as exhibit A which permitted outstanding leave to be commuted to cash. He testified that in the year 2008 and 2009 when he applied for his leave he was given only a part. In support of this evidence he tendered exhibits B,B1 and C. By a 21st May 2010 memo, tendered as exhibit D, he was instructed to take the whole of his accumulated leave of 249 days and to resume on the 20th of May 2011. He complied. About a month into this leave period he was called and given exhibit E which had computed his entitlement with an attached discharge note for him to sign. He refused to sign the note because the computation did not meet his expectations and he did not want to be bound by its contents. When his petition to the defendants to review their decision on the amount to be paid him failed, he instructed his lawyers to go to court. Asked whether he was aware that the benefits to be paid him and all who opted for the Productivity Screening Exercise was a decision of a committee that met for that purpose, plaintiff answered in the affirmative. He maintained however that that committee was not to breach the terms of the Senior Staff Conditions of Service, specifically clause 1.12 (i)(ii)(iii)(iv) which allowed the committee to negotiate only his severance package and nothing else.
At the end of Mr. Opuni Sekyere’s evidence it became clear that the defendant’s view of the matter was that the plaintiff was not only bound by the total amount determined for him by the committee but also his claim for benefits under his accumulated leave was against the Labour Act and therefore not maintainable. Somewhere in Mr. Opuni’s evidence he wanted the court to find that it was the plaintiff who refused to take his leave leading to the accumulation. I think an early answer can be given to this issue whether it was the plaintiff who refused to take his leave leading to the accumulation. The answer is an obvious no. Not only was there no evidence that the plaintiff refused to take his leave but that it cannot be imagined how the plaintiff could defy the defendant’s instruction that he vacates the office and attend to his leave. Who assigns plaintiff work? It is the defendant. Is the defendant contending that the plaintiff refused their instructions and continued to come to office against their wish to work when his schedule had been assigned to somebody else, as is usually the case in in employer/employee leave administration? In any case the evidence on record is rather that the plaintiff applied for his leave and was given part and that it was the defendant company that decided when the employees, including the plaintiff, took their leave.
At the close of pleadings 7 issues were set down for trial but the trial judge, rightly in my view, identified the main issue between the parties being whether the plaintiff was entitled to his salary, utility allowance, car maintenance allowance, 90 Litres of petrol per month from July 2010 to May 2011, that is during this accumulated leave period?
Since it was one of the main defences of the defendant throughout the trial that the Labour Act disentitled the plaintiff to his claim, the trial judge sought an understanding of the relevant provisions in this Act whether the defendant’s contention that it was unlawful to consider plaintiff’s accumulated leave can be sustained. The relevant sections referred to and considered at the trial court were 30 and 31 of the Labour Act.
In respect of these sections the trial judge said:
“Defendant contended throughout its testimony before the court and per exhibit H that it failed to pay the plaintiff cash in lieu of outstanding leave because it was contrary to section 31 of the Labour Act. The said section 31 provides that “ Any agreement to relinquish the entitlements to annual leave or forgo such leave is void”.
“The provision is capable of one meaning which simply means that one’s entitlement to leave is not relinquished by any agreement to the entitlement itself or to forgo as to do so will be void”.
If I understood the trial judge, her understanding of the provision is that in so far as any agreement to relinquish leave entitlements is void all administrative steps the defendant took which denied the plaintiff his leave entitlement was void and therefore plaintiff was entitled to the accumulated leave.
As regards section 30 she quoted and interpreted it as follows:
“Termination Not To Affect Leave Entitlement Earned
1. Where the employment of a worker is terminated, the worker is entitled to annual leave in proportions to the period of service in the calendar year.
2. The worker shall be deprived of any other grants or awards to which the worker is entitled including payment in lieu of notice of termination”.
The implication is that the termination or severance of the employment relationship does not affect earned leave. Taylor JSC cited the dictum of Lord Loreburn L.C in Attorney General vrs Birmingham (1912) AC 788 at 795 H.L in Nartey Tokoli vrs Volta Aluminium Company Ltd (No. 2) (1989-90) 2GLR 341 that ‘when a legislature has devised mandatory and imperative provisions for the protection of any employee or any person, an argument that the provisions can be lawfully ignored.. is one that a common law judge should not countenance. It is an invidious and dangerous argument subversive of the legal order’
The court therefore finds that the defendant’s reason for its failure to pay plaintiff cash in lieu of his outstanding leave has not been made out as the provision it sought to rely on effectively frowns upon such conduct. Accordingly, defendant’s contention is not upheld as it is without legal basis”.
“Where in a collective agreement there are express provisions with respect to the terms and conditions for termination of the contract of employment which are more beneficial to the worker than the statutory provisions of the Labour Act then the former prevails”.
She alluded to sections 18 and 19 of the Labour Act and found that the provisions in the Collective Agreement between the parties were more generous and beneficial to the plaintiff than just a negotiated redundancy pay. She made reference to clause 1.12(iii) of the Collective Agreement and concluded that plaintiff was therefore not only entitled to the negotiated package but, amongst others, also to commutation of his outstanding leave to cash from the 1st July 2010 to 20th May 2011 commuted to cash.
To the plaintiff’s claim for long service award for 15years with the defendant company the trial judge found that he was entitled to 14 and half years not 15. We have no problem with this finding.
In respect of utilities, car maintenance award and petrol the trial judge found that these were fringe benefits that were rightly excluded when commuting leave into cash, relying on the authority of Bannerman Mensah vrs Ghana Employers Association (1996-97) SCGLR 417 where the court stated that in commuting leave to cash it is only the employees basic salary that was to be considered and not the fringe benefits. She concluded that the petrol, utility and car maintenance were fringe benefits which plaintiff must cease to enjoy when the employment relationship was severed on the 1st of July 2010. She ordered the plaintiff to refund the 90 litres of petrol given him. Here again we are in agreement with the trial judge.
After examining exhibit 1, 1A,1B and exhibit 2 which is the Manual of Staff Regulations and Conditions of Service for Senior Staff she found that deferment of leave for the year was possible where it was done officially and by that the creation of accumulated leave was also possible where it was carried over to the next year and that was why by exhibit D the defendant wrote to the plaintiff to proceed on his 249 accumulated leave. She held that since the defendant was not able to point to the specific provision in the Labour Law that outlawed commuting accumulated leave to cash the plaintiff was entitled to benefits during the accumulated leave period.
She concluded her judgment thus:
“ In conclusion, plaintiff is entitled to the negotiated severance package of sixteen months’ salary, payment of his Provident Fund, GH¢400 transportation expenses to his home town and commutation of his outstanding leave into cash from 1st July 2010 to 20th May 2011 which makes approximately 10.6 months’ salary. The salary to be used to compute his outstanding leave into cash must be the value as of the date of the severance. Plaintiff is awarded interest at the commercial rate on all the amounts from 1st July 2010 till date of final payment. Cost of GHC4,000 in favour of plaintiff...”
The foregoing findings and conclusions of the trial judge is the subject of the 6 grounds of appeal I reproduce hereunder.
“a. The learned Judge erred when she gave judgment in favour of the Plaintiff/Respondent since the Plaintiff/Respondent did not have the capacity to bring the action as an individual to challenge a collective negotiated settlement under a redundancy.
b. The learned Judge erred when she failed to avert her mind to the fact that the Plaintiff’s accumulated leave at the time he was compelled to take his leave was largely as a result of his refusal to obey lawful instructions of the Defendant to take his accumulated leave as instructed.
c. The learned trial judge erred in her interpretation of sections 30 and 31 of the Labour Act, 2003 (Act 651) when she held that cash could be lawfully paid in lieu of accumulated leave irrespective of those provisions.
d. The learned Judge erred when by her judgment, she sought to impose a new agreement on the parties to the redundancy negotiations when the redundancy agreement itself was not in use.
e. The learned Judge erred when she awarded interest on the negotiated severance package, outstanding provident fund and transportation expense, when those amounts had always been available for the Plaintiff to claim/receive but for his own refusal to do so.
f. That the judgment is against the weight of evidence.
g. Further grounds of appeal would be filed on receipt of the judgment”.
Counsel for the defendant decided to argue out his appeal beginning with grounds (a) and (d). At the end of his submissions however he appeared to have abandoned grounds (a).
On this ground of appeal (d) he argued that the severance award that was arrived at for payment to the affected workers was negotiated by the Senior Staff association represented by its President and some other key members together with the Public Utility Workers Union headed by the General Secretary and Management. That being the case the plaintiff, who like some of his colleagues opted to join the exit from the company, were bound by the outcome of the negotiations and cannot now seek to question the package arrived at by the committee. Counsel submitted that plaintiff’s contention that he was not bound by the negotiated results of the committee but bound only by the provisions of the Staff Manual is untenable. He contended that on the authority of Volta Aluminium Co Ltd vrs Tetteh Akuffo and others reported in (2003-2004) SCGLR at 1167 it is true that a worker can have rights under the collective agreement but those rights can be varied or waived by a trade union in negotiations on behalf of its membership. And that is exactly what the committee did when it decided not to include commutation of the outstanding leave of 249 days in favour of the plaintiff because it would have been contrary to the Labour Act. Such agreement by the committee cannot be interfered with, as the trial judge did, counsel submitted.
Counsel for the plaintiff in disagreement with the contention of the defendant relied on exhibit A, the Collective Agreement between the senior staff association and the defendant company, particularly clause 1.12 already referred to but I will reproduce it for emphasis
“Staff affected by the exercise shall be entitled to the following
i. Severance Award negotiated with the Senior Staff Association
ii. Payment under the staff Provident Fund
iii. Commutation of any outstanding and/ or current leave to cash
iv. Transportation expenses to enable staff to relocate to the place of first employment to his hometown”.
It is his argument that reading this provision carefully item (i) is specific that it is only severance award that can be negotiated. All others cannot be part of negotiations as was done by the committee. He disagreed with the contention of the defendant that the trial judge had interfered with an agreement validly negotiated. He argued that all that the trial judge did was to apply exhibit A which allowed only severance package to be negotiated with the senior staff.
From the record of appeal and submissions made by both counsel what I think comes out for our determination is the interpretation we put on sections 30 and 31 of the Labour Act which to the defendant denies the plaintiff any entitlements to his accumulated leave. We are also to determine whether the plaintiff was bound by the negotiated outcome of the committee.
That there was accumulate leave for the benefit of the plaintiff cannot be doubted on the records. What cannot also be doubted is the fact that the defendant has been administering the right to leave entitlements to its workers in a manner that allowed deferment and consequent accumulation of leave. It is worth mentioning also that the defendant’s witness in court was very clear in his evidence that the committee did not put any monetary gains on the accumulated leave for the benefit of the plaintiff because it would have been unlawful for the committee to have done so in view of the Labour law.
There is no dispute there was this committee made up of the Senior Staff Association, The Public Utility Workers Union and Management of the Defendant company which came out with the severance package that the plaintiff is in disagreement with. On reading the cases of Nartey Tokoli vrs Volta Aluminium Company and VALCO vrs Tetteh Akuffo(2003-2004) SCGLR 1158 referred to in the submission of both parties, I came to the conclusion that the committee had the competence to negotiate the severance award of the workers. By section 96 of the Labour Act a collective agreement relating to the terms and conditions of employment of workers may be concluded between trade unions and representatives of employers. Trade union has been defined as any association of workers whose main objective is to promote and protect the economic and social interest of its members. The committee that did the negotiation on behalf of the workers is a trade union by this definition. The evidence before us creates no doubt that it was a senior staff association and management that brought into existence exhibit A, the conditions and terms of employment of the senior staff of the defendant company. Not in dispute also is the fact that it was this same body referred to as the committee which conducted negotiations determining the severance award now in contention for the plaintiff and other employees. It appears obvious to me therefore that this committee had the power to negotiate whatever rights its members had. Having the power to negotiate severance awards and other matters relating to the employees, the committee had the duty to come to any decision it considered fair for its constituents and the fairness or unfairness cannot be a subject matter of complain by the plaintiff or anybody, unless in coming to its decision the committee violated or misapplied any law. And any such decision is binding on all its constituents including the plaintiff. This was the thinking of His Lordship Date Bah in the case of Valco vrs Tetteh Akuffo(supra). Unless the committee has violated any law or misapplied any law in arriving at its negotiated results its members are bound. The plaintiff has argued that the clear meaning of sub(i) of clause 1.12 is that it is only severance award that can be a subject of negotiation and nothing of sub (ii), (iii), and (iv). The question is, did the committee violate or misapply any law in its negotiations? If it did not, then the plaintiff is bound by the committee’s negotiated results, even if it applied clause 1.12 in a manner not acceptable to the plaintiff. I will answer this question shortly.
The contention of lawful or unlawfulness of the accumulation of earned leave and its deferment and conversion to cash was discussed under sections 30 and 31 of the Labour Act. These sections come under the heading:
“Termination of employment not to affect leave entitlement earned”
“30. (1) Where the employment of a worker is terminated, the worker is entitled to annual leave in proportion to the period of service in the calendar year.
(2) The worker shall not be deprived of any other grants or awards to which the worker is entitled including payment in lieu of notice of termination.
(3) Subsection (1) and (2) do not apply to cases where the employer has the right to dismiss a worker without notice Agreement to forego leave to be void
31. Any agreement to relinquish the entitlement to annual leave or to forgo such leave is void.”
I have earlier stated that the interpretation the trial judge put on these sections of the Labour Act. She said “the provision was entitled to one meaning which simply means that one’s entitlement to leave is not extinguished by any agreement to the entitlement itself or to forgo as to do so will be void”. Can this be the intended meaning of these provisions? I think we have to read the statute as a whole and apply the purposive interpretation to unearth the intention of the law makers as we are enjoined to by section 10(4) of the Interpretation Act. What is the mischief that is sought to be cured by the repeal of the Industrial Relations Act which has been replaced by the Labour Act? Refer to the Supreme Court cases of Re. vrs High Court, Accra, ex parte Expendable Polystrene Products Ltd(2001-2002)1 GLR 98, Danso Acheampong vrs. Attorney General and Abodakpui ( 2009) SCGLR 358.
Reading sections 20 to 32 of Sub-Part 1 of the Labour Act with the heading “Annual Leave with Pay”, I find a clear purpose of the Act calling for a mandatory enjoyment of annual leave entitlements by workers. This sub part provides detail rules governing annual leave, including minimum leave period that the worker is entitled to, when leave can be interrupted and the employer bearing the cost of the interruption, the employer bound to keep records on leave enjoyment by its workers, sick leave days. From the effective date of the Act, 2003, workers were enjoined to take their annual leave and employers were never to refuse workers their leave entitlements under any conditions or terms contrary to what the Act itself provides. Having in mind the provisions of the Act, specifically Part IV sub part 1, it appears to me that section 31 should be understood and interpreted as simply nullifying any agreement between the employer and worker to forego leave. The agreement to forgo leave is void with no benefits accruing to the benefit of the employer or employee under such void agreement, unless there are any equitable grounds to the contrary. Introduction of equity will become obvious by the end of this delivery. The worker before the passage of the act could agree with the worker to forgo his leave and in several cases accumulate his leave for the purpose of converting this accumulated leave into cash payments to him, not having any regard to the health consequences of the worker. It is this practice that the Labour Act has declared wrongful and therefore void. The worker is denied the right to sell his leave and the employer is prevented from buying the leave. There is no doubt on the records that clause 1.12 of the conditions of service contains commutation of accumulated and current leave into cash. This provision in the collective agreement, exhibit A, is such type agreement that Section 31 declares void. It would appear then that unless equity or any other considerations come up, the plaintiff cannot make any claim against the defendant based on clause 1.12 which clearly from my point of view is void and therefore unenforceable per section 31 of the Labour Act.
The courts are not in the business of applying law in a vacuum. Neither are they there to apply the law strictly even if the result will be unconscionable, grossly unfair and manifest injustice or fraudulent. In this case before us the evidence is not disputed that it was the defendant who was in charge of leave administration of its employees. It determined when and for how long a worker was to enjoy his leave. Exhibit B tendered by the plaintiff is an example of the employer dominance. By this exhibit even though the plaintiff was entitled to 30 days leave and applied for same he was given 14 days with the reason that there was shortage of staff. This was in March 2008. It is such practice of the defendant compulsorily deferring the leave entitlement of its workers that, I believe, kept the defendant company honouring its mandate to its customers. It is this same practice (which the defendant benefitted from) that resulted in the plaintiff’s accumulated leave which the defendant acknowledged and asked him to proceed to enjoy. Plaintiff was about a month in the enjoyment when he was written to severing his relationship with the defendant at the time he had 249 days leave unexhausted. Should the defendant, a commercial entity, who had traded its products to its customers and whose wrongful administration of the leave days of its employees to its benefit, but health loss of its employees, now be allowed to flag section 31 of the Labour Act to deny the plaintiff these accumulated leave entitlements? Should the defendant be allowed to deny the plaintiff whose leave deferment also contributed in this commercial enterprise, his share of the benefits with the only reason that the Labour Act says so? I give these questions a negative answer. To allow the defendant to succeed in this defence using the Labour Act will be permitting statute to be used as an engine of fraud. Not only will it be unconscionable and clearly unjust to allow such defence in a court that combines both jurisdictions of law and equity, but allowing defendant to use statute as an engine of fraud. I must emphasize the facts of this case that the plaintiff dutifully applied for his leave but it was the defendant who refused to grant him all the leave entitlement. Other factual situations may provide different outcomes.
By my delivery I hold the view that legally it is not every agreement to forego leave that is void simpliciter and for which accumulated leave yields no benefits for the worker.
Now was the committee therefore right in its decision not to apply this leave accumulation provision when it held that to do that will be unlawful? The defendant was clear in its evidence that the committee did not consider the plaintiff’s accumulated leave because to do that will be unlawful against the labour Act. By my consideration of section 31 above this position taking by the committee was a wrong appreciation and application of the law, their denial of the plaintiff his accumulated entitlement was wrongful. I have earlier in this delivery stated that the plaintiff is bound by the negotiation entered into by the committee unless the committee acted wrongly or misapplied any law. The committee has mis-appreciated and misapplied the law the plaintiff cannot be bound by the committee’s award.
It is for the forgoing reasons I supported the lead judgment.
JUSTICE VICTOR OFOE
JUSTICE OF APPEAL
AGYEMANG, I also agree MABEL AGYEMANG (MRS)
(JUSTICE OF APPEAL)