In July 2020 , Golden Star Resources (GSR) announced the sale of its subsidiaries, Golden Star Bogoso Prestea Limited, to Future Global Resources (FGR) in a Share Purchase Agreement (SPA).
Caystar Holdings owns 100 percent shares in Bogoso Holdings and Bogoso Holdings in turn owns 90 percent shares in Golden Star Bogoso Prestea Limited. The deal, therefore, came after Caystar Holdings agreed to sell its entire stake in Bogoso Holdings to Future Global Resources(FGR), which gives FGR the opportunity to own the 90 percent control /interest in Golden Star Bogoso Prestea Limited (GSBPL).
Per the transaction details sighted by the B&FT, the SPA was to take effect 30th September, 2020 (closing date) subject to such terms as: FGR would neither vary the conditions of service of any of the employees of GSBPL nor terminate anyone’s employment as result of share purchase and a grant of no objection to FGR becoming the controller of GSBPL.
Meanwhile, before closing date, FGR in compliance with section 52 of Minerals and Mining Act, `2006 (Act 703) applied to Minister, Lands and Natural Resources through the Minerals Commission for approval to become the CONTROLLER of GSBPL. On 30th September, 2020, the Minister upon the recommendations of the Minerals Commissions granted his approval to FGR becoming the controller of GSBPL.
Beginning of staff agitation
Following the announcement of the SPA, some workers formed the opinion that the intended SPA meant severance of their employment relationship with GSBPL and therefore were entitled to severance pay.
In an attempt to clarify the details of the deal to workers and the fact that it will not impact employees negatively, GSR and FGR through many engagements with the employees explained and held the position that the SPA secures continuity of employment and prohibits any variation of or diminution in conditions of employment.
On the issue of severance pay obligations, the two firms insisted that since the transaction was on SPA basis, it will not affect employment, hence the employees are not entitled to severance pay.
Not satisfied, the workers formed a group outside of the employee Unions called ‘ELAPSE’ and notified GSR that they were putting together a legal team to engage GSR on their behalf on issues relating to the sale of Bogoso Prestea Mine.
Again, GSR advised the workers to continue engaging management by following laid down procedures and policies. It subsequently did not recognise ELAPSE as a group in the company since the workers belonged to unions.
The collective agreement between company and unions, states that “the company recognizes the union as the appropriate representative to conduct collective bargaining on behalf of the class of workers speciﬁed in the collective bargaining certiﬁcate and the sole negotiating body for all matters connected with employment and/or non-employment and/or with their conditions of workers.”
The workers ignored the advice by appointing a legal team and a labour consultant outside the remit of the collective agreement with the unions.
Consequently, the workers’ legal team wrote to GSR requesting for negotiation on the severance matter but GSR directed the letter to the Ghana Mine workers Union (GMWU) and Golden Star Bogoso Prestea Based Union (GBEBU) asking them to confirm their knowledge of the said legal team.
Whilst the GMWU replied that GSR refrain from engaging the lawyers since they remain the only representatives of the workers, GBEBU refused to reply. Subsequently, GSR did not reply to the legal team.
The aggrieved workers then took the matter to court and same is pending.
When contacted, the Group Corporate Affairs Manager of Golden Star Resources, declined to comment as the matter is pending before the law courts.
What the law says
The Labour Act (2003) Act 651, section 65, states that severance/redundancy packages or compensations are paid in the event that workers’ employment were terminated or they suffered diminution in their terms of conditions of service owing to a close down, arrangement or amalgamation.
Per available evidence, since the assumption of FGR’s control over the operations of GSBPL two months ago, employees’ salaries and allowances have been paid in full.
Additionally, negotiations for a 5 percent salary increment plus US$400 lumpsum payment was concluded on Friday 6th November 2020, to take retrospective effect from January 2020 and to be paid to each employee of GSBPL.
The transaction has also not led to a variation in employees’ bonus scheme, with the employer assuring that accrued bonus up to 3rd Quarter of this year will be paid in November and that of the 4th Quarter to be paid in January 2021 which has always been the practice, while all other conditions of service are being met by FGR.
Further more, GSBPL remains the employees’ employer and is still operating as it was prior to the share purchase. Assuming the employees’ appointments are to be terminated as is being demanded by the aggrieved workers, the termination will be done by GSBPL and if they are to be re-engaged it will be the same GSBPL that will re-engage them.
Meanwhile, the aggrieved workers, in buttressing their point, cited the sale of Bogoso Gold Limited in 1999 where workers were paid severance package. The difference however is that, in that transaction, the company terminated all appointments by paying the redundancy compensation and reengaged those they wished to. In the case of this sale, no appointment has been terminated to warrant payment of redundancy compensation.