… company makes rest of workers redundant
An Accra High Court has thrown out a case brought before it by Ghana Community Network Services Limited (GCNet) seeking the nullification of an arbitration settlement for some 150 workers who were rendered redundant last year.
GCNet has been in a tango with the workers and the National Labour Commission (NLC) after an arbitration hearing ruled that the redundant staff are entitled to and must be paid what the company’s Human Resource (HR) Policy on redundancy clearly states.
The company has also served notice of redundancy letters to the remaining staff working on the GeGov Project to be laid-off by end of April 2021, following the non-renewal of GCNet’s Service Agreement with the Ghana Revenue Authority (GRA). The January 29, 2021 letter explained that management had to embark on a demobilisation exercise in operations of the GeGov Service, Infrastructure and Support Departments due to non-renewal of the service agreement.
“Per above, your employment contract shall be determined through redundancy. GCNet is hereby serving three months effective February 1, 2021. The effective date of your termination is April 30, 2021,” the letter in part read.
Affected staff, numbering over 50, are in deep shock and anxious over the letter’s silence on the stipulated redundancy package as enshrined in the company’s Human Resource Manual Policy, with some contemplating seeking legal redress should the suffering of redundant colleagues earlier experienced be visited on them.
In September last year, it came out that a three-member arbitration panel under the auspices of the NLC had ruled in favour of about 150 GCNet staff over a redundancy dispute with their company.
Consequently, the arbitration panel ruled that GCNet is under obligation to pay each of the staff a redundancy package in accordance with the company’s policy “without any adjustment or variation”, adding that: “The effective date for the redundancy is August 31, 2020; and this shall be the last day of employment of the affected staff with GCNet,” the panel held in a ruling dated September 4, 2020.
GCNet is an information technology firm that used to facilitate trade services at the country’s ports and had a contract with government until 2023.
In April last year, government terminated the contract, leading to a shutdown of its operations in May this year.
Government cancelled the contract to allow the full rollout of a new Customs clearing system, Uni-Pass – which according to the Ghana Revenue Authority (GRA) will centralise the processing and handling of all import and export documentations, a system known as a single window clearing system.
As a result of the contract’s termination, GCNET decided to lay-off some of its staff and accordingly notified the Chief Labour Officer of its intended redundancy plans.
Documents filed at the arbitration hearing showed that GCNet had an HR Manual that obliges it to use a certain formula to pay its staff during a redundancy exercise. In view of the redundancy exercise, management of GCNet and the Staff Association signed a Memorandum of Understanding (MoU) to implement the redundancy in conformity with the HR Manual.
As a result of the MoU, management of GCNet issued termination letters to the affected staff with the redundancy set to take effect on August 31 last year, but payment to be done on or before June 30, last year.
Two days before the deadline for payment of the redundancy package, management of GCNet asked for a renegotiation of the redundancy package as it could not pay the staff as stipulated in the HR Manual – leading to a dispute that ended up at the NLC.
According to GCNet, led by its labour consultant Austin Garmeh, the HR was a collective agreement but the Staff Association was not a registered labour union and hence – per the Labour Act, 2003 – it could not enter into a collective agreement with the company.
In view of this, GCNet argued that the MoU it signed with the Staff Association was null and void, and therefore not binding. GCNet also made a case to the effect that it did not have funds to pay the redundancy package as contained in the HR Manual, on the basis that the government of Ghana is yet to pay compensation for abrogating the contract; meanwhile, there is no guarantee that government will even pay the compensation.
The Staff Association, on the other hand, presented a case that the HR policy or manual was the conditions of employment developed by GCNet for its entire staff, which it had been implementing since it commenced operations; and therefore it was binding on the company.
Also, it argued that per Article 21(1) (e) and Article 24 (3) of the 1992 Constitution, freedom of association is guaranteed and there is no law that states that every association must be registered. It further contended that the government of Ghana had agreed to pay GCNet compensation for abrogating the contract, and that compensation would include the redundancy package for staff.
Just like the arbitration, the court agreed with the staff and held that GCNet must pay the redundancy package as contained in the HR Manual, because the redundancy package was already predetermined. It held that the case brought by GCNet had no merit, as the company had dealt with the Staff Welfare Association while well aware of its status and standing.