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Contract - Unexecuted document -
Termination of appointments -
Section 18 of the Labour Act,
2003 (Act 651). -
Conditions of service -
Whether documents on
terms of employment was
executed by both parties -
Whether documents bearing no
date can not be effective as a
contract.-
HEADNOTES
The parties herein are disputing
over a document which purports
to embody the terms and
conditions of their employment
relationship. Whereas the
plaintiffs/appellants/respondents,
called the plaintiffs, are
saying that the document
contains a binding contract, the
defendant/ respondent/
appellant, called the defendant,
says otherwise. The plaintiffs
were the employees of the
defendant for periods of over
twenty-five and five years
respectively. Upon the
termination of their
appointments for reasons which
are not in dispute, the
defendant calculated and paid
the plaintiffs various sums of
money which it considered to be
their just recompense. The
plaintiffs signed relevant
papers and received the
benefits. But soon thereafter
they caused their Solicitors to
write to the defendant to
complain about the amounts
awarded them which they believed
were inadequate, in the light of
the terminal benefits stated in
the document containing their
terms of employment. The
defendant insisted that the said
document was not executed by
both parties and was not
therefore legally operational as
to be enforceable.
-
HELD :-
The interest should be
calculated after the sum of
money already paid to each
plaintiff has been deducted from
the total sums found to be due
to each plaintiff in this
judgment. The defendant has put
the plaintiffs through
unnecessary and avoidable
expenses and should therefore be
mulcted in heavy costs.
STATUTES REFERRED TO IN JUDGMENT
Labour Act, 2003 (Act 651).
Evidence Act, 1975 (NRCD
323) section 26
CASES REFERRED TO IN JUDGMENT
BROGDEN v. METROPOLITAN RAILWAY
COMPANY (1877) 2 App. Cas 666
HL.
FREEMAN V. COOKE (1843-60) All
E. R. Rep. 185; 154 E. R. 652
SMITH V. HUGHES (1871), L. R. 6
Q. B. 597; (1861-73) All E. R.
Rep. 632.
EVEILLE INDEPENDENT LLC V.
ANOTECH INTERNATIONAL (UK) LTD.
(2015) EWHC 726 (Comm),
NARTEY-TOKOLI and Others v.
VOLTA ALUMINIUM CO LTD (No. 2)
(1989-90) 2 GLR 341 SC.
BOOKS REFERRED TO IN JUDGMENT
The English and Empire Digest,
Replacement Volume 12, 1973
Reissue, paragraph 277 at page
87
DELIVERING THE LEADING
JUDGMENT
BENIN, JSC:-
COUNSEL
EMMANUEL BECKLEY FOR
THE PLAINTIFFS/APPELLANTS/RESPONDENTS.
TERRY MORKEH FOR
THE DEFENDANT/RESPONDENT/RESPONDENT.
JUDGMENT
BENIN, JSC:-
The core issue raised in
this appeal is this: in what
circumstances, if at all, will
an unexecuted document give rise
to legal consequences? The
parties herein are disputing
over a document which purports
to embody the terms and
conditions of their employment
relationship. Whereas the
plaintiffs/appellants/respondents,
called the plaintiffs, are
saying that the document
contains a binding contract, the
defendant/respondent/appellant,
called the defendant, says
otherwise. The plaintiffs were
the employees of the defendant
for periods of over twenty-five
and five years respectively.
Upon the termination of their
appointments for reasons which
are not in dispute, the
defendant calculated and paid
the plaintiffs various sums of
money which it considered to be
their just recompense. The
plaintiffs signed relevant
papers and received the
benefits. But soon thereafter
they caused their Solicitors to
write to the defendant to
complain about the amounts
awarded them which they believed
were inadequate, in the light of
the terminal benefits stated in
the document containing their
terms of employment. The
defendant insisted that the said
document was not executed by
both parties and was not
therefore legally operational as
to be enforceable.
As a result of this
misunderstanding between the
parties, the plaintiffs brought
an action before the High Court
seeking this relief: “An order
compelling the defendant to pay
in full all
entitlements/benefits due to
plaintiffs’ cessation to be in
defendant’s employment as in
terms of the Conditions of
Service for Senior Staff of the
defendant company.”
At the trial court, a copy
of the document titled
‘CONDITIONS OF SERVICE FOR
SENIOR STAFF-GDC LIMITED.
REVIEWED 1ST AUGUST
1988’, was admitted in evidence
as exhibit F. On the signature
page, it is clear there is no
signature. Based on this, the
High Court rejected it as not
constituting a contract and held
that they were entitled to be
paid under section 18 of the
Labour Act, 2003 (Act 651). On
appeal to the Court of Appeal,
their Lordships went beyond the
bare document and considered all
the evidence on record,
especially actions taken by the
parties in giving effect to the
document, and came to the
conclusion that exhibit F was in
force, it was binding on the
parties and therefore
enforceable as a contractual
document. The defendant has
appealed to this court against
the decision of the Court of
Appeal on these grounds:
1.
That the judgment is
against the weight of evidence.
2.
That the Court of Appeal,
Cape Coast failed to consider
the case of the Respondent
3.
That the Court of Appeal,
Cape Coast erred when it held
that the trial judge did not
properly appreciate the import
of a conclusive presumption
4.
That the Court of Appeal,
Cape Coast failed to appreciate
that by signing Exhibits B and D
the
Plaintiffs/Appellants/Respondents
were estopped from asserting
otherwise.
5.
That the Court of Appeal,
Cape Coast confused the effect
of a written but unsigned
contract with an oral or verbal
contract.
6.
That the judgment of the
Court of Appeal, Cape Coast is
wrong in law.
All the grounds of appeal
will be considered together, as
they all boil down to a
resolution of the existence or
not of exhibit F, and if it
exists whether it is legally
enforceable. Certain ancillary
issues will be resolved in the
process. In arguing grounds 1
and 2 together, Counsel for the
defendant was of the view that
the evidence on record did not
support the existence of exhibit
F. But there was sufficient
evidence on record to confirm
the existence of this document
to the knowledge of the
defendant. The plaintiffs
claimed they got exhibit F,
being a copy of the original
document, from the defendant’s
own Personnel Manager called Mr.
Essien. The former Personnel
Manager Rev. Turkson testified
that the document was in the
custody of the Personnel Office.
They led evidence to show that
the defendant made some payments
under this document, notably a
funeral grant captured in
exhibit C, which defendant did
not disown. It was not prudent
for counsel to deny the
existence of exhibit F when his
client, the defendant does not
deny that. What they deny, per
the Deputy Managing Director,
Mr. Darko, under
cross-examination, was the
existence of an executed
contract containing the
conditions of service of senior
staff. According to him they
only made reference to it from
time to time on compassionate
grounds, on a case by case
basis. The finding by the Court
of Appeal on this issue cannot
therefore be faulted.
The next factual issue is
the effective date of exhibit F.
The defendant contends that it
bears no date and therefore was
not effective as a contract. The
Court of Appeal found that on
the face of the document it was
expressed to come into force on
1st August 1988. The
plaintiffs’ case was that the
parties had managed their
relationship on the strength of
this document ever since it came
into force on the date it bears.
The 2nd plaintiff was
appointed by letter dated 12th
June 2003, tendered in evidence
as exhibit A. In the said letter
of appointment, the defendant
states some conditions of
service, including his salary,
but states that his “other
service conditions shall be
stated in the existing Senior
Staff Conditions of Service.”
But according to the plaintiffs,
the only existing Senior Staff
Conditions of Service was
exhibit F. And the defendant
could have rebutted this
evidence by producing what they
referred to in exhibit A as the
“existing Senior Staff
Conditions of Service” if one
did indeed exist. In the face of
the serious conflict over this
question, the defendant would
have produced the senior staff
conditions of service if one was
in existence besides, exhibit F.
They did not produce any because
there was none. The Court of
Appeal’s finding on this is thus
justified.
The next material piece of
evidence is exhibit C, dated 20th
May 2007 wherein the defendant
paid funeral grant to the 1st
plaintiff when he lost his wife.
The defendant admitted this
payment, and it was based on
clause 28(d) of the Senior Staff
Conditions of Service contained
in exhibit F. It was signed for
the defendant by its
Administrative Manager. There
was credible evidence on record
that this document had all along
been in the custody of the
Personnel Office. If the
Personnel Officer and
Administrative Manager did not
know what the service conditions
of staff were, we wonder who
else in the organization would
know better. And if what the
Administrative Manager ordered
to be paid was not authorized by
the staff conditions of service,
the accounts and the audit
departments would reasonably be
expected to have rejected the
proposal by the Administrative
Manager. The fact that the
payments were effected goes to
confirm the plaintiffs’ position
that the parties were operating
under exhibit F and the said
clause 28 of exhibit F justified
the payment effected under
exhibit C. Exhibits A and C and
the defendant’s conduct in
acting on it, albeit for
compassionate reasons, go to
confirm that the date 1st
August 1988 placed on exhibit F
was the effective date the said
document came into effect. The
Court of Appeal was thus
justified in finding that all
the terms of a valid contract
were present in exhibit F, with
the exception of signature of
the parties thereto.
The only outstanding issue
is the Court of Appeal’s
decision that exhibit F
constituted a valid contract
between the parties, despite the
fact that it was not executed by
either of them. As earlier
mentioned, the court came to
that conclusion based on the
facts and circumstances in
evidence.
Before delving into the core
issue, let us discuss some
points raised by counsel for the
defendant in the statement of
case. In respect of Grounds 3
and 4 of the Grounds of Appeal,
he cited section 26 of the
Evidence Act, 1975 (NRCD 323)
and said by accepting and
signing for the terminal
benefits, the plaintiffs were
estopped by conduct from going
back on their word. Counsel
“submitted that the Respondents
having signed exhibits B and
D…………………as their full payment
and entitlements are estopped
from asserting otherwise. The
Court of Appeal whilst
acknowledging the applicability
of section 26 of…….Act 323 held
that the trial judge’s
conclusion is wrong in
law………..Your Lordships, it is
rather the Court of Appeal’s
decision which is wrong in
law…………….as section 26 raises a
conclusive presumption as held
rightfully by the trial court
and not a rebuttable
presumption…..”
Counsel proceeded to state the
reasons for his submission in
these words: “………once a person’s
conduct makes another to believe
a thing to be true and acts upon
such belief, the truth of that
thing shall be conclusively
presumed against him from
asserting otherwise.
Having signed exhibits B and D
as final entitlements the
respondents are conclusively
presumed to have accepted that
as their full entitlement and
have also made appellant company
to believe in that fact.
If the respondents knew there
was some Conditions of Service
which should form the basis of
their entitlements, why did they
not object to same but went
ahead to sign to same and
accepted the said
entitlements......................
It is submitted that the
exhibits B and D are conclusive
evidence of the full
entitlements of the
plaintiffs/respondents when they
have signed same and cannot be
corrected by any evidence.”
Section 26 of Act 323 provides
that:
Except as otherwise provided by
law, including a rule of equity,
when a party has, by his own
statement, act or omission,
intentionally and deliberately
caused or permitted another
person to believe a thing to be
true and to act upon such
belief, the truth of that thing
shall be conclusively presumed
against that party or his
successors in interest.
Counsel is saying that the
plaintiffs should not have
signed exhibits B and D for
their terminal benefits if they
believed they did not represent
their full benefits. And once
they have signed them, they are
estopped from asking for more
benefits having led the
defendant to believe that they
had been fully paid. This
argument is untenable, for the
reason that the terminal
benefits were not calculated by
the plaintiffs. It is the
defendant who did that. And for
a person who had ceased to be
employed, it is reasonable for
them to accept what was offered
by the defendant in the first
place, without prejudice to
demanding extra payment if they
later found they had been
short-changed. That is the
prevailing practice in labour
and industry. Hence in the Valco
workers case, cited below, the
workers had all signed and
received final benefits upon
redundancy, but when they
realized they were not fully
paid in accordance with the
prevailing conditions of
service, they went to court and
succeeded. The Supreme Court
ordered that they should be paid
their full benefits, less what
they had already received.
Therefore where the employment
was not lawfully terminated, the
employee was entitled to receive
his full benefits under the
employment contract or statute,
whichever was applicable. The
same principle applies in cases
of lawful termination also. If
the employer prepares a document
paying him what he is entitled
to and the employee signs for
it, the employer cannot claim
estoppel against him, because
receipt of part-payment in total
satisfaction must be made
knowingly by the party with full
knowledge of the consequences.
There must be mutual
understanding before or at the
time of signing for the package
offered by the employer. The
burden of persuasion rets with
the employer, but he failed to
discharge same.
More importantly, the defendant
was duty bound to calculate the
full benefits applying the
material provisions in exhibit F
before calling upon the
plaintiffs to sign. If the
defendant did the wrong
calculation, it cannot invoke in
aid estoppel by conduct against
the plaintiffs. Section 26 of
Act 323 does not apply as the
plaintiffs by signing exhibits B
and D did not state they were
abandoning any other claim they
had against the defendant.
Exhibits B and D would be
construed as final entitlement
and full-payment only if the
calculation was based on the
terms of the conditions of
service. Being the author of
exhibits B and D, it was rather
the defendant who had
misrepresented to the plaintiffs
that the benefits had been
properly calculated in terms of
their conditions of service.
Estoppel would not arise when
the facts giving rise thereto
were deliberately induced by the
person seeking to rely on it, or
was the result of a mistake or
misrepresentation. It would be
unreasonable to allow defendant
to profit from such
misrepresentation, which was
deliberate since they had
refused to calculate the
terminal benefits applying the
provisions in exhibit F.
Next, counsel for the defendant
made reference to exhibits 1 to
3 series being copies of
resignation letters and/or
acceptance of resignation of
members of staff between 2000
and 2001 and said none of them
was referable to exhibit F.
Counsel referred to the fact
that when the second plaintiff
resigned from his post at the
defendant company in the year
2000, he did not claim any
benefit under exhibit F and this
was a clear indication that
exhibit F did not exist. The
same reasoning goes for Reverend
Emmanuel Turkson (PW1) who was
also not paid terminal benefits
under exhibit F when he left the
job in 2001. It is difficult to
appreciate this kind of
reasoning. If PW1 and the second
plaintiff in the past did not
insist on their rights, does it
follow that it was because
exhibit F was non-existent? That
is a perfect non sequitur, for
the evidence on record shows it
was all the time in the custody
of the Personnel Office. And if
in the past the second plaintiff
did not act on his rights under
exhibit F, nothing prevents him
from doing so this time around.
Moreover if other members of
staff did not insist on their
rights it is no bar against the
first plaintiff; there are
persons who are prepared to
forego their rights no matter
what the circumstances are, but
such forbearance cannot be
relied upon as a defence in
action brought by other members
of staff against the company.
Those exhibits have no probative
value in the light of the issues
raised in this matter. The Court
of Appeal therefore rightly
ignored them, even though it
would have been better for them
to have commented on them.
Thirdly counsel made this
argument: “It is also noteworthy
that whilst the 2nd
respondent indicated that his
appointment was terminated under
exhibit F, the said Letter of
Termination was never tendered
to let the Court of Appeal come
to the conclusion it came
to……………Neither did the 1st
respondent also tender his
resignation letter which showed
that it was referable or
pursuant to exhibit F.
It is trite law that in cases of
this nature there is the need to
tender the termination or
resignation letter which the
respondents claim is contrary to
the alleged Conditions of
Service to warrant the payment
of the full entitlements based
on the termination and
resignation. Without any
evidence of the said resignation
and termination letter referable
to exhibit F, the Court of
Appeal with all due respect
erred in coming to the
conclusion it came to in
relation to the respondents.”
With all due respect to learned
counsel, he drew wrong
inferences from the proven
evidence. The second plaintiff
had testified that he was issued
with an appointment letter
exhibit A by the defendant
before he started work. In the
said exhibit A it was stated
that part of his terms of
appointment were contained in an
existing Conditions of Service
for Senior Staff. These are
undisputed facts. His further
testimony, supported by other
evidence on record, was that as
at the time of his appointment
up to the end of his tenure the
only document containing the
Conditions of Service was
exhibit F; in his testimony he
stated his resignation was based
on exhibit F. Even without him
stating this, it was only a
logical deduction from the
evidence that his resignation
could only have been made under
the existing Conditions of
Service, exhibit F, which was in
force all through his tenure.
Therefore the failure to tender
the resignation letter did not
in any way diminish his
credibility and the reliability
of the plaintiffs’ case. These
were the main points in
counsels’ submissions, besides
the fact that the Court of
Appeal relied on the unsigned
document, exhibit F. The focus
then will be shifted to that
exhibit F and its effect on this
case.
It would have been desirable for
the Court of Appeal to have
stated the principle of law upon
which it arrived at its decision
to enforce the terms of exhibit
F even in the absence of due
execution. English common law
has always recognized the
principle that the signature of
the parties to an agreement is
not a prerequisite to the
presence or existence of
contractual relations. It has
been established in a long line
of cases and by text writers
that the conduct of the parties
could be indicative of
acceptance of the contract and
an intention to be bound by it,
even if not formally executed.
But such acts as would
constitute acceptance by conduct
must be clear, unambiguous and
unequivocal. An objective test
is applied, which the authors of
The Law of Contract, published
by Lexis Nexis, Fourth Edition,
at paragraph 2.225; page 527
explain to mean “whether a
reasonable person in the
position of the offeror would
think that the offeree was by
his conduct intending to accept
the offer.” The same principle
is put in another way by the
authors of The English and
Empire Digest, Replacement
Volume 12, 1973 Reissue,
paragraph 277 at page 87 in
these words:
“If a person to whom an offer is
made so conducts himself that a
reasonable man would believe
that he is accepting that offer
and the offeror acts upon that
belief the offeree will be held
to have accepted the offer and
therefore, to have contracted on
the terms proposed.”
A classic example of acceptance
by conduct is provided by the
case of BROGDEN v. METROPOLITAN
RAILWAY COMPANY (1877) 2 App.
Cas 666 HL. The facts of the
case were as follows. For some
time Brogden had been supplying
coal to the Railway Company. The
parties decided to enter into a
formal contract. The parties
therefore began negotiating an
agreement for the supply of coal
on a ‘requirement’ basis at a
fixed rate or price for
twelve-month duration. The
company sent a draft agreement
to Brogden who inserted further
provisions, signed it and posted
it back to the company. The
company did not formally execute
the contract, neither did it
communicate acceptance of the
terms inserted by Brogden. They
just put it away in a drawer.
However, the parties proceeded
to order and supply coal which
was delivered and paid for in
terms as contained in the draft
contract document. A dispute
arose and Brogden sought to say
there was no contract. The House
of Lords whilst recognizing that
the company had not communicated
any acceptance to Brogden, and
also the agreement was still a
draft which had not been
executed by the company,
nevertheless held there was a
binding contract based on the
order and supply of coal.. It is
significant to understand the
underlying reason for this
decision, as the parties had
acted on the basis that there
was a binding contract between
them.
Relying on the decision in
FREEMAN V. COOKE (1843-60) All
E. R. Rep. 185; 154 E. R. 652,
Blackburn J. rehashed the
principle thus:
“If, whatever a man’s real
intention may be, he so conducts
himself that a reasonable man
would believe that he was
assenting to the terms proposed
by the other party, and that
other party upon that belief
enters into the contract with
him, the man thus conducting
himself would be equally bound
as if he had intended to agree
to the other party’s terms.”
That was in the case of SMITH V.
HUGHES (1871), L. R. 6 Q. B.
597; (1861-73) All E. R. Rep.
632.
This principle has been
consistently applied in
appropriate cases. One of the
recent cases in which it was
invoked was the case of REVEILLE
INDEPENDENT LLC V. ANOTECH
INTERNATIONAL (UK) LTD. (2015)
EWHC 726 (Comm), where it was
decided that the conduct of the
parties amounted to a waiver of
the requirements of acceptance
and communication of the
acceptance. In that case the
plaintiff had entered into what
was described as a ‘deal
memorandum’ with the defendant,
whereby the plaintiff would
license to the defendant certain
intellectual property rights and
promote the defendant’s products
in its television series. The
deal memorandum was expressly
stated not to be binding until
it was signed by both parties
and it was intended to be
replaced by a long term
agreement which was never
concluded as negotiations broke
down. On these facts the
defendant claimed that it was
not bound by the terms of the
deal memorandum, on grounds,
inter alia, that the plaintiff
had not signed the document and
therefore had not accepted its
terms. The question for the
court’s determination was
whether the plaintiff’s conduct
was sufficient to amount to a
waiver of the requirement for
signature and whether acceptance
by conduct had occurred and been
communicated to the defendant.
On the facts the court found
that the plaintiff had waived
the requirements by integrating
the defendant’s products into
their television episodes as
required in the deal memorandum
and had given the defendant the
right to use of the intellectual
property rights. The defendant
had also marketed its products
by using the intellectual
property rights licensed by the
plaintiff.
The court held that the acts
carried out by both parties were
significant enough to go beyond
any reasonable steps taken in
anticipation of an agreement
being reached and were clear
evidence of the plaintiff’s
acceptance and communication of
this to the defendant. Since the
terms of the deal memorandum had
been carried out, this
demonstrated an acknowledgment
by both parties that they were
contractually bound, the court
concluded.
The decision was appealed
against to the English Court of
Appeal whose decision is
reported under the same title in
(2016) EWCA Civ. 443. The
appellate court affirmed the
trial court’s decision. The
following important points were
highlighted in the decision:
a. Offer may be accepted by
conduct where that conduct
evidences, on an objective
analysis, a clear and
unequivocal intention to accept
the terms of the offer.
b. It is possible to accept an
offer on terms set out in a
draft agreement that is never
actually signed.
c. If a party has a right to
sign a contract before being
bound, it is open to him to
waive that requirement and
conclude the contract without
insisting on signature.
d. Subsequent conduct of the
parties is admissible to prove
the existence of a contract and
its terms.
In the light of these
principles, the Court of Appeal
was right in dismissing the
trial court’s conclusion that
exhibit F was not binding simply
because it was not signed by the
parties. The defendant’s case
was that the document was an
offer made by the workers to the
management of the defendant
company which they did not
accept. However, the evidence on
record clearly did not support
the defendant’s stand. The
defendant had made reference to
an existing Conditions of
Service for Senior Staff in
exhibit A, the second
plaintiff’s letter of
appointment. The evidence
established that the only
document containing the
conditions of service was
exhibit F, which was in the
custody of the defendant’s
Personnel Office. The second
plaintiff had accepted the
appointment believing that most
of the terms of his engagement
were contained in an existing
document, and according to his
evidence exhibit F was the only
available document containing
the conditions of service whilst
at post. So was the defendant
deceiving the second plaintiff
when they issued him the letter
of appointment? In the absence
of exhibit F, there was no other
document detailing the service
conditions mentioned in the
letter of appointment, exhibit
A. The fact that the defendant
was referring to exhibit F and
no other contractual document
was subsequently confirmed by
exhibit C. By this exhibit the
defendant made reference to
clause 28(d) of exhibit F as the
basis for paying the first
plaintiff funeral grant on the
demise of his wife. These pieces
of evidence demonstrate a clear
and unequivocal acceptance of
the terms of exhibit F. At the
time of making payment of the
funeral grant to the second
plaintiff, the defendant did not
enter any reservation nor did
they say they were paying it on
compassionate grounds. Mr. Darko
admitted under cross examination
that the defendant paid the
funeral grant to the first
plaintiff under clause 28 of
exhibit F. Exhibit C speaks for
itself as it makes reference to
the relevant clause of exhibit
F. The parties by their conduct
had exhibited an intention to be
bound by the terms of the draft
or proposed contract, contained
in exhibit F. The workers were
entitled to negotiate a
collective bargaining agreement
with their employer under the
existing Labour law of this
country. But with the defendant
implementing the terms of
exhibit F, it was reasonable for
them to think that such a
contract was in force, albeit
unsigned. The former Personnel
Manager of the defendant
company, called Rev. Turkson,
who tendered exhibit F said
during his tenure the senior
staff were regulated by exhibit
F which at all material times
was in the custody of the
Personnel Office. He said the
former Personnel Manager Andy
Mensah was paid his terminal
benefits based on exhibit F. But
he himself was not paid terminal
benefits on these conditions but
he took no action. The fact that
he did not take any action to
recover his benefits under
exhibit F does not detract from
the relevance of his testimony,
which was to the effect that
exhibit F did exist and was in
the custody of the defendant and
that senior staff were required
to be paid under its terms. We
hold the view that the parties’
reliance on, and implementation
of, provisions of exhibit F
constitute clear and unequivocal
acts of acceptance and
communication of acceptance of
the contract.
The defendant sought to downplay
their reliance on exhibit F to
pay some benefits to the staff
saying they were done on
compassionate grounds on a case
by case basis. Assuming but
without admitting this practice
to be true, it would still not
entitle the defendant to resile
from that practice when they had
led the workers to believe that
they were entitled to the
benefits stated in exhibit F,
and they had actually enjoyed
them.
Even though the facts of this
case and those in the Valco
workers case are not on all
fours, there is a striking
element in that case which we
cannot gloss over. The Valco
workers case is reported as
NARTEY-TOKOLI and Others v.
VOLTA ALUMINIUM CO LTD (No. 2)
(1989-90) 2 GLR 341 SC. There
was in existence an executed
document which contained all the
terms of engagement between the
workers and Valco. On
humanitarian grounds, Valco also
gave the workers certain
benefits which were referred to
as gentleman’s agreement since
they were not negotiated and
agreed upon by the parties, but
were unilaterally granted by
Valco. Following a dispute, the
workers brought an action
against Valco and claimed
payment of their benefits,
including the packages or
benefits referred to as
gentleman’s agreement. The trial
High Court rejected the claim
founded on the gentleman’s
agreement, which decision was
affirmed by the Court of Appeal.
When the matter finally landed
at the Supreme Court the point
concerning the gentleman’s
agreement was strenuously
argued.. The majority of the
Court held the view that it was
enforceable. The reasoning is
simple: once the workers were
made to enjoy those benefits,
they had become part of their
entitlements. Employers offer
all kinds of incentive packages
to motivate existing staff to
produce more or to retain the
services of staff or even to
attract new personnel. And once
such incentives have been
introduced they cannot be
withdrawn without a mutual
understanding. Applying the
underlying reasoning in that
case to the instant, even if the
defendant unilaterally paid
funeral grant to the first
plaintiff and terminal benefits
to Andy Mensah and made terms in
existing conditions of service
part of second plaintiff’s
employment contract, they had
become part of the service
conditions which all other
senior staff were entitled to
enjoy. It would be unjust to
deny others, for that would be
plainly discriminatory and such
discriminatory practices do not
encourage industrial harmony.
Be that as it may there is
sufficient evidence, as already
explained, to support the Court
of Appeal’s decision that
exhibit F was binding on the
parties. The only legitimate
inference to be drawn from the
accepted facts is that there was
willingness on the part of the
parties to be bound, and once
the document embodying the terms
of the contract was accepted, it
was not afterwards competent to
repudiate it.
For the foregoing reasons, we
dismiss the appeal. We have
decided to vary the orders of
the court below as we hold that
the plaintiffs were entitled to
be paid under the terms of
exhibit F. The plaintiffs
pleaded in paragraph 6 of their
statement of claim filed on 23rd
January 2009 that they worked
with the defendant company for
over twenty-five (25) and five
(5) years respectively. This
averment was admitted by the
defendant in paragraph 2 of its
amended statement of defence
filed on 5th March
2009. The plaintiffs also
pleaded they were receiving
basic monthly salary of
GH₵231.42 and GH₵264.87
respectively, which averment was
also admitted by the defendant.
End of service benefits are
stated in Clause 25 of exhibit
F. Both plaintiffs did not
retire from service, neither
were they terminated summarily,
they left voluntarily and their
departure was accepted by the
defendant. So they were both
entitled to be paid under clause
25 (b)(i)(ii)and (iii). They
were also entitled to be paid
under Clause 25(d)(ii) and
(iii), applicable to the second
and first plaintiffs
respectively. Consequently, the
first plaintiff is adjudged to
recover the following:
i.
Travelling
allowance to his home town, if
not already paid.
ii.
Gratuity at the
rate of three months basic pay
for each completed year of
service, that is (GH₵231.42 x 3
months x 25 years), totaling
GH₵17, 356.50.
iii.
End-of-service benefit at
the rate of six months basic pay
for each completed year of
service (GH₵231.42 x 6 months x
25 years) totaling
GH₵34,713.00
For the second plaintiff, he is
adjudged to recover the
following:
i.
Travelling allowance to
his home town, if not already
paid.
ii.
Gratuity at the rate of
three months basic pay for each
completed year of service, that
is (GH₵264.87 x 3 months x 5
years, totaling GH₵3,973.05)
iii.
End-of-service benefits at
the rate of 2 months basic
salary for each completed year
of service, that is (GH₵264.87 x
2 months x 5 years), totaling GH₵2,648.70
On 17th November 2008
the plaintiffs caused their
Solicitors to write a letter of
demand, exhibit E, to the
defendant to pay them their
benefits in accordance with
exhibit F but the defendant did
not oblige. The plaintiffs are
entitled to interest at the
current bank rate on the amounts
found due above from the date of
demand 17 November 2008 to date
of final payment. The interest
should be calculated after the
sum of money already paid to
each plaintiff has been deducted
from the total sums found to be
due to each plaintiff in this
judgment.
The defendant has put the
plaintiffs through unnecessary
and avoidable expenses and
should therefore be mulcted in
heavy costs.
A.
A. BENIN
(JUSTICE OF THE SUPREME COURT)
S. O. A. ADINYIRA (MRS)
(JUSTICE OF THE SUPREME COURT)
ANIN YEBOAH
(JUSTICE OF THE SUPREME COURT)
N. S. GBADEGBE
(JUSTICE OF THE SUPREME COURT)
V. AKOTO-BAMFO (MRS)
(JUSTICE OF THE SUPREME COURT)
COUNSEL
EMMANUEL
BECKLEY FOR THE
PLAINTIFFS/APPELLANTS/RESPONDENTS.
TERRY MORKEH
FOR THE
DEFENDANT/RESPONDENT/RESPONDENT.
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