AN Accra Fast Track Court has ruled that the Labour Act, 2003 does not compel employers in Ghana to provide reasons when they terminate the employment of employees.
The court said since a contract of employment was not like that of servitude, the former could be “severed at anytime and for any reason or none”, subject only to the service of the appropriate notice.
Mrs Justice Irismay Brown, the judge, gave the ruling in the case in which the National Labour Commission (NLC) sought an order to compel Ghana Telecommunications Limited (GT) to make payments to a former employee of GT in accordance with the commission’s orders.
The employee, Ms Afua Yeboah, lodged a complaint of unfair termination of appointment at the NLC when her employment as Corporate Communications and General Manager was terminated in February 2006.
She was employed in September 2003 as an Assistant Manager and rose to the position of Chief Manager in April 2005 and subsequently became the Head of Corporate Communications and General Manager.
The commission, after considering the dispute, said the “reservation of the right to dismiss without reason was contrary to Sections 15 and 63 (4) of the Labour Act, 2003”.
Section 15 of the act, among other things, states that “A contract of employment may be terminated by mutual agreement between the employer and the worker.”
Section 63 (4), which labour experts say must be read with Section 15 for the right interpretation, states that “A termination may be unfair if the employer fails to prove that the reason for the termination is fair or the termination was made in accordance with a fair procedure of this act.”
The commission added that GT’s submission that the employee’s rise to the position of chief manager was under a new contract of employment that had within it the provision on the terms of the termination of a contract could not be upheld, since that contract was not a contract of employment but rather a “mere notice of promotion”.
The GT challenged the NLC’s orders and refused to comply with it, citing unfairness and a breach of the rules of natural justice in its defence.
In her ruling, however, Mrs Justice Brown did not uphold the charge of unfairness against the NLC but said the findings of the NLC were “flawed, erroneous at law and at variance with the evidence adduced before it and, therefore, un-enforceable”.
According to her, the interpretation by the NLC of Sections 15 and 63 (4) of the Labour Act, 2003 that employers were mandated to assign reasons for the termination of contract, making GT’s action in terminating the employment contract of Ms Yeboah unfair, was not the right interpretation.
She said the law made a distinction between dismissal, which connoted misconduct, and termination, which did not necessarily impute such connotation.
Whereas dismissal without justification amounted to wrongful termination of contract and rendered an employer liable for damages, in the case of termination of contract brought before the courts no reason had to be given, but an employer, when sued, had to justify a dismissal to avoid liability, Justice Mrs Brown said, citing other rulings as examples.
She said GT’s “contract of re-employment” contained clauses, among which was the clause on the manner of the termination of the employment contract by both parties which was duly agreed to by both parties and signed.
“Consent was absolutely essential to the validity and enforceability of the new agreement. The petitioner willingly signed and worked under the new contract from April 29, 2005 without protestation,” Mrs Justice Brown said.
That clearly manifested the intention of the parties to work under the newly agreed terms of employment and the NLC, therefore, could not declare that agreement as a “mere promotion letter”, she said.
The trial judge said whatever condition of service existed before the complainant’s promotion had, by mutual consent, been discharged.
She said the NLC also erred when it proceeded to use the provisions in the new employment document to calculate her redundancy pay, after having decided that the document did not incorporate new terms of employment.
Mrs Justice Brown was also not happy that the NLC, when considering the case, substituted “termination on grounds of redundancy” as a reason for GT’s termination of employment with Ms Yeboah, on the basis that the company had, during that period, embarked on a restructuring exercise.
It said redundancy was more than how the NLC interpreted it in the case and that no evidence was found of redundancy to warrant the award made by it.
According to labour experts interviewed on the decision, the court's decision contradicted International Labour Organisation (ILO) Convention 158, which provided that the termination of employment at the instance of the employer must be backed by valid reasons.
Article 4 of ILO Convention 158 says, “The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.”
Conventions of the ILO, labour experts say, influence local labour legislation.
Ghana has consistently ratified those ILO conventions and expressed its willingness to adhere to international norms and best practices.
DAILY GRAPHIC, WEDNESDAY, FEBRUARY 13, 2008