Judgment - Issues - Extraneous or irrelevant - Judge must not raise suo motu extraneous or irrelevant issues in judgment.

Master and servant - Employment - Retirement - Whether employee entitled to fringe benefits for accumulated leave commuted to cash.

The plaintiff sued his employers for a declaration that his retirement without payment of his fringe benefits for house-help, driver, etc was wrongful. He claimed also to be entitled to payment in lieu of his accrued leave in addition to the fringe benefits for the period of leave. The employers contended that upon his retirement the plaintiff was not entitled to fringe benefits for his leave period. The High Court held that the employers erred in terminating plaintiff’s employment and that he was entitled to his retirement benefits for the period covering his accumulated leave or for a six months notice of termination of the employment. On appeal to the Court of Appeal,

Held, the trial judge erred in his appreciation of the real issue in dispute, and raised suo motu the extraneous and irrelevant issue whether the employment was terminated wrongfully. An employee whose employment had terminated could not claim fringe benefits. Once the leave entitlement of the employee was paid in cash he was not entitled to further fringe benefits. The decision of the trial judge would therefore be set aside. Wuaku v Attorney-General [1994-95] GBR 263, SC, Dam v Addo [1962] 2 GLR 200, SC referred to.

Cases referred to:

Dam v Addo [1962] 2 GLR 200, SC.

Wuaku v Attorney-General [1994-95] GBR 263, SC.

APPEAL from the judgment of the High Court to the Court of Appeal.

N K Kudjawu for the appellants.

LAMPTEY JA. Before the High Court, Accra, Frank Bannerman-Menson (hereinafter called the “plaintiff”) sued jointly and severally J V L Philips, and three other named persons, and the Ghana Employers Association (the “association”) and claimed a declaration “that his retirement from 5th defendant's services without payment of his fringe benefits from 1 April 1989 to 22 February 1990 was wrongful and that he was entitled to all such fringe benefits.” The claim was resisted by all five defendants. The trial judge dismissed the claim against J V L Philips and the three named persons. He entered judgment for each of them against the plaintiff. He failed and or omitted to award costs against the plaintiff in favour of each of these four defendants. The four defendants were aggrieved by the failure and or omission to award each of them costs.

In the circumstances they each appealed to this court on this issue. The trial judge felt satisfied that the plaintiff, in part, succeeded in his claim against the association. He entered judgment for the plaintiff for some only of the reliefs he had sought against the association. The association was dissatisfied with the judgment and appealed to this court. The plaintiff was also aggrieved by the dismissal of some of the reliefs he had sought against the association. He cross-appealed to this court.

I must begin this judgment by a brief narration of the matters that led the plaintiff to sue the defendants. The plaintiff was employed by the association on 1 January 1962. He rose through the ranks and reached the top-most position in the association as its chief executive. The association terminated the contract of employment with effect from 31 March 1989, at a time when the plaintiff was on leave. The association commuted the outstanding leave due to the plaintiff into cash payment which the plaintiff received and acknowledged. The payment to the plaintiff in cash did not include payment for fringe benefits for the period of his outstanding leave from 1 April 1989 to 31 January 1990. The position of the association was that the plaintiff was not entitled to payment in cash for fringe benefits for the period stated by him. The High Court Accra was therefore called upon to determine this issue.

The first ground of appeal argued by counsel for the appellant was that the trial judge misconceived the claim made by the plaintiff. He contended that the reliefs claimed by the plaintiff were for the payment to him of fringe benefits for the period stated in the writ of summons. He contended further that the claim by the plaintiff was not one for wrongful termination of employment or wrongful dismissal. He submitted that the trial judge erred in law when he held that the case before him was a case of wrongful termination of the plaintiff’s employment with the association. He took the court through the record of proceedings and read from various exhibits to prove and support his submission that the claim of plaintiff was for an order of the court for the payment to him of fringe benefits. In reply the plaintiff conceded that his claim was for an order of payment of fringe benefits to him and not a case founded on wrongful termination of his employment with the association. He submitted that the trial judge was right in Law when he held that he was entitled to be paid all the fringe benefits. In my opinion it is necessary to spell out the claim of the plaintiff as endorsed in the amended writ of summons as follows:

“A declaration that the retirement of the plaintiff from 5th defendant’s service without his fringe benefits from 1st April 1989 to the end of his terminal leave on 22 February 1990 is wrongful and that plaintiff is entitled to all such benefits up to the date of his terminal leave”.

With great respect to the trial judge I do not read into the above

claim as formulated a cause of wrongful termination of a contract of employment. I do not also understand the claim as one founded on wrongful dismissal. The claim as stated is simply one seeking an order for payment to plaintiff of fringe benefits for the stated period. I agree with the submission of counsel for the association that the trial judge erred in law when he held that “the defendants were certainly wrong in terminating plaintiff’s employment.”

I find that the trial judge further misdirected himself on the issue of the claim of the plaintiff when he expressed the opinion following:

“The decision to terminate his employment which enabled the defendants to avoid payment of fringe benefits therefore amounted to a serious breach of contract of employment with the plaintiff. That decision was definitely wrongful”.

With respect the plaintiff had not challenged nor disputed the right and power of the association to terminate his contract of employment. Indeed, there was not a shred of evidence to show that the association had breached the contract of employment with the plaintiff because it terminated the contract of employment. Having proceeded on a complete misconception of the relief sought by the plaintiff, the trial judge concluded that the plaintiff had successfully proved his first claim. This conclusion was not based on the evidence before the court. The appeal on this ground succeeds.

I now consider whether the plaintiff was on the evidence before the court entitled to be paid fringe benefits for the stated period.

The plaintiff was retired from the employment of the association on 31 March 1989. It was the case of the plaintiff that if he had not been retired on that date, he would have continued to enjoy his earned and accrued leave up to 22 February 1990. He therefore claimed that he was entitled to be paid cash in lieu of leave for the period. The short but effective answer of the association to this demand was that since the plaintiff retired on that date he was not therefore in the employment of the association after 31 March 1989. He was not entitled to be paid fringe benefits for that period. On this issue, counsel for the association drew the attention of this court to the following observation of the trial judge himself during the hearing.

“By Court: I have already stated that when an employee is on terminal leave he cannot justifiably claim to be paid his fringe benefits” 

The trial judge again expressed this opinion in the course of the examination-in-chief of DW1, to the effect that some of the claims made by the plaintiff were not maintainable. This would be found in the record as follows:

“By Court: For the claim on the houseboy, drivers, and all claims of plaintiff related to his fringe benefits enjoyed with his salary were not payable by the 5th defendant, so long as they relate to the period after 31 March 1989 for the reason that plaintiff was no more in the employment of the 5th defendant after 31 March 1989.”

I understand these statements to mean that an employee whose employment is formally terminated cannot claim fringe benefits after due termination of his employment. Understood in this way the trial judge correctly stated the law on the issue. Counsel for the association referred to and relied on the very recent Supreme Court case entitled Wuaku v Attorney-General [1994-95] GBR 263, SC which stated the principle of law on this issue. The plaintiff contended that the Wuaku case involved a public officer hence that case can be distinguished from the present one. I find that this contention is plainly misconceived. The Wuaku case involved an issue arising out of a contract of employment, namely, a dispute between an employer and an employee in the matter of rights and duties, on the termination of a contract of employment. In my opinion the Wuaku case is helpful in considering the instant appeal.

The trial judge was finally of the view that the claim of the plaintiff was misconceived even before the reception of evidence had been completed. He nevertheless permitted the hearing of the case to proceed to a conclusion. Contrary to his earlier opinion that the action was not maintainable when he stated as follows:

“I have no doubt in my mind that when leave is commuted to cash only basic salary is paid. The employee is not paid fringe benefits....”

He then proceeded to justify the opinion he had expressed as follows:

“…it follows logically too that there is no basis for the payment of fringe benefits while the employee is no longer at post. If an employee is on terminal leave he will not be at post and so it is reasonable to assert that he cannot be paid fringe benefits”

In spite of the opinion he had succinctly expressed in the above passages the trial judge nevertheless saw the case as one of compulsory retirement of the plaintiff by the association. He proceeded in this mistaken belief to examine the case of the plaintiff in that light and reached the following conclusion:

“In my view the plaintiff was entitled to be paid his retirement benefits for the period covering the accumulated leave after he had been retired from 31 March 1989 or for six months that the defendant should have given him notice before terminating the contract.”

Clearly and plainly the trial judge erred in his appreciation of the real issue in dispute between the parties. In my opinion that conclusion of the trial judge cannot be supported.

I must observe that the trial judge, suo motu raised and considered extraneous and irrelevant matters. See on this Dam v Addo [1962] 2 GLR 200, SC. One such issue raised by him was whether the termination of the contract of employment by the association was wrongful. In my opinion these extraneous and irrelevant matters, to a very large extent, unduly influenced his appreciation and perception of the claim made by the plaintiff against the association. The trial judge substituted a case entirely different and inconsistent with that of the plaintiff. He erred in law. His decision must be set aside.

The plaintiff cross-appealed against the dismissal of some of the reliefs he had sought. In arguing the cross-appeal failed to demonstrate that the trial judge was wrong in the application of the facts to the terms in his contract of employment. He contended that some of the claims he had made were based and founded on terms and conditions which were implied in his contract. He did not cite any authority to support his submission. I have not been able to find any authority to support the submission. I must add that the trial judge dutifully considered each and every item of claim and gave reasons for rejecting the particular head of claim. He has not shown that the trial judge was wrong in the conclusion he reached. I have not found any fault with the trial judge’s rejection of the heads of claim. I am satisfied that the cross-appeal fails.

In conclusion I allow the appeal by the association and dismiss the cross-appeal of the plaintiff.

LUTTERODT JA. I have read the judgment of my learned brother and have only these few words to add. This is one of those exceptional cases in which both parties are not entirely happy with the judgment given and so have appealed against those portions they are dissatisfied with.

Because my learned brother has so ably set out the facts leading to this case as well as the reliefs sought by the plaintiff-respondent-cross appellant in the court below, I do not think it at all necessary to repeat them here. At the hearing, as far as reliefs (a) and (b) are concerned, the court identified the main point in controversy as this, whether in the commutation of the respondent’s leave into cash, he was entitled to only his basic salary or all fringe benefits additional to his salary and which he has spelt out in reliefs (a) to (d). The court had little difficulty in arriving at the conclusion that he was not so entitled.

Nevertheless, the court however, in another breath found that the “retirement of plaintiff from the defendant’s services was wrongful and ordered the payment of his benefits together with interest thereon to the plaintiff. The learned trial judge based this decision on the fact that his employment was wrongfully terminated, and as a natural consequence caused him to lose those benefits. In the result, the trial judge found for the plaintiff with respect to relief (a)-(b), (xi) and dismissed all the other claims for the reasons stated in the judgment. Of the eleven grounds of appeal which were filed on behalf of the 5th defendant-appellant, the most important which were urged before us were grounds (a), (b), (e), (f), (g) and (c). Grounds (a), (f) and (g) read as follows:

“(a) The learned trial judge misunderstood the plaintiff’s case and thereby misdirected himself by putting forward on his own motion a different case for the plaintiff by holding that the plaintiff was retired in circumstances amounting to wrongful termination of his employment when in fact the plaintiff’s claim was not for wrongful retirement or termination of employment.

(f) The learned trial judge having found that the plaintiff’s remaining 200 working days of accumulated leave had been commuted to cash and paid to the plaintiff at the date of his retirement ought to have dismissed the plaintiff’s claim for fringe benefits in respect of the said accumulated leave after the 31 March 1989.

(g) That having regard to the fact that the plaintiff’s claim was in respect only of the non-payment of fringe benefits to him for his commuted leave the learned trial judge erred by formulating as the main bone of contention between the parties “the unpaid commuted leave on the plaintiff.”

The argument urged upon us with regard to these grounds was that since the respondent by his claim was not complaining that he had been wrongfully retired but simply that in commuting his earned leave to cash the fringe benefits he normally enjoyed ought to have been taken into account, the learned trial judge ought to have dismissed his claim the minute he came to the conclusion that in the commutation of leave into cash the employee was entitled only to his basic salary and not the fringe benefits. Counsel’s further argument is that by proceeding further to determine the wrongfulness of the termination of the employment the learned trial judge fell into error in that he proprio motu substituted for the respondent a case he had never set up.

I am in entire agreement with the appellant’s counsel that the claim the respondent put up was firstly, for a declaration that paying him his basic salary without the fringe benefits for the period his accumulated leave was commuted into cash was wrongful. Secondly that he be paid these monies.

I am of the opinion, that, looking at both his amended writ of summons and statement of claim his complaint is not that the appellant has wrongfully terminated his employment or even that the commutation of his leave was wrongful or even that it was imposed on him. The issue which did then arise for determination and which the trial judge rightly in my view identified is whether when leave is commuted into cash only the basic salary is paid. I agree with the learned trial judge’s finding on this issue. The record shows that the respondent who asserted the fact, led evidence on the conditions of service generally and so was able to demonstrate that while on leave he was entitled to enjoy fringe benefits. He failed to lead evidence on the practice whereby leave was converted into cash.

Indeed the conditions of service, which was tendered in evidence as exhibit O is completely silent on this matter of commuting leave into cash and the modalities for doing so. Thus the respondent’s insistence that he was on the basis of the exhibit entitled to his fringe benefits also was untenable. On the other hand, the appellants led evidence to show what the established practice was in labour relations. When asked in his evidence in chief thus: “This commuted leave what does it comprise of?” His answer was: “It comprises of only basic pay... it takes only the basic pay into account but does not take fringe benefits into account. I will like to add that I have already told the court that for senior staff we were paid commuted leave in cash for all cases … take account only of the basic pay.”

This assertion was not challenged. It was confirmed by DW1 who had been the head of administration for a number of establishments. He also served on the Board of Ghana Employers’ Association and represented them on the National Apprenticeship Council and the Labour Advisory Committee. The letters commending him to serve