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J U D G M E N T
LARTEY, J.S.C.:
This is an appeal against the
majority decision of the Court
of Appeal, reversing the
decision of the High Court,
Accra which had entered judgment
for the defendant against the
Plaintiffs.
The brief facts
according to the respondents
(henceforth referred to as the
plaintiffs) are that they were
employees of the appellant
(henceforth also referred to as
the defendant) until on or about
April 1, 1995 they were
retrenched and declared
redundant at a time they had all
served the defendants for
varying numbers of years. They
averred they were all members of
the Teachers and Educational
Workers Union (TEWU) of the
Trades Union Congress of Ghana.
They alleged that in or about
1994 the defendant decided to
carry out a retrenchment
exercise, mandating the Minister
of Transport and Communications
to handle the exercise on its
behalf. According to the
plaintiffs TEWU negotiated on
their behalf with officials of
the Ministry of Transport and
Communications of Ghana whereby
an agreement was reached that
the plaintiffs would each
receive from the defendant two
and half months’ pay as
end-of-service benefits for each
completed year of service. In
the view of the plaintiffs, the
defendant having resiled from
the said agreement, was
insisting on paying the
plaintiffs a flat amount of
three months pay each regardless
of the number of years of
service rendered to the
defendant. On these facts the
plaintiffs on May 16, 1995
issued their writ of summons
claiming:
“(a) A declaration that the
plaintiffs are entitled to
end-of-service benefit
calculated at 2½ months salary
for each year of service to the
Defendant by the Plaintiffs.
(b) An order upon the
Defendant to pay the Plaintiffs
end of service benefit
calculated at 2½ months salary
for each year of service to the
Defendant by Plaintiffs.
(c) Interest on the sum
due to each Plaintiff from the 1st
day of April, 1995 to the date
of final judgment”.
In its defence the
defendant averred that the
Regional Maritime Academy is
governed by an agreement drawn
between the Government of Ghana
and the Ministerial Conference
of West and Central African
States on Maritime Transport.
And in accordance with article
6(2) of the agreement the terms
of contract of all employees of
the Academy is governed by what
is termed ‘International
Administrative Law’. Under
article 13(3) the salaries of
all regular employees are quoted
in US dollars but paid the cedis
equivalent of the quoted US
dollars. The defendant finally
averred that its action was
based on the decision of the
Board of Governors of the RMA
which in turn acted in
accordance with the
International Document of the
Academy which specifies the
conditions of service of its
employees.
At the trial the
plaintiffs called one witness to
give evidence on behalf of all
the plaintiffs. He testified
that as employees of the
defendant institution the
plaintiffs belonged to the
Teachers and Educational Workers
Union of T.U.C. According to
the witness at the end of the
restructuring exercise the
principal of the institution
gave the names of the workers
whose services were no longer
needed, and were to receive only
three months basic salary as
end-of-service benefit
notwithstanding the number of
years each of the plaintiffs had
served. In the course of their
evidence, the witness tendered
exhibit ‘A’, i.e. the
Collective Bargaining
Certificate, which in their
belief entitled them to conduct
collective bargaining on behalf
of its members. Exhibit ‘B’ was
a letter written by the local
union of TEWU to the General
Secretary of TEWU of T.U.C. in
which they complained of their
dissatisfaction with the outcome
of a previous meeting held on 12
October, 1994 in respect of the
retrenchment exercise of the
R.M.A. Exhibit ‘C’ reflects the
minutes of the meeting of 10th
January, 1995 on the same
redundancy exercise carried out
by the RMA. It is significant
to note from paragraph 8.0 of
the exhibit that the attention
of the meeting was drawn to the
Board’s rejection of the 2½
months salary for every
completed year of service agreed
upon during the negotiations on
the severance award. In
paragraph 8.1 the explanation
given was that the Board of RMA
at its 18th session
rejected the rate outright, and
further drew the attention of
the Ministry of Transport and
Communications to the Academy’s
Convention which spelt out the
conditions for such purposes.
After examining the
evidence assembled before her
the trial judge held that since
RMA is an institution with an
international status the terms
of its employees are regulated
by RMA conditions of service,
and that the plaintiffs have no
bargaining agreement with RMA.
She also held that the agreement
the plaintiffs were relying upon
for their claim has no binding
effect on the defendant
institution, and that whatever
bargaining power the plaintiffs
had with Ghana Nautical College
ceased when that college was
dissolved and replaced by RMA.
The judge was of the opinion
that the plaintiffs’ claim is
based on nothing and cannot be
sustained. Consequently she
dismissed the claim and entered
judgment for the defendant.
At the Court of
Appeal by a majority of two to
one the trial court’s judgment
was overturned. It is against
the majority judgment of the
Court of Appeal that the
defendant launched the instant
appeal to this court on a number
of grounds and which were filed
on different occasions. The
first in time to be filed was on
8 August, 2001, which featured
in the notice of appeal and
which included the usual omnibus
ground of the judgment being
against the weight of evidence.
Then came the next group of
grounds of appeal numbering not
less than seven and which were
described as additional
grounds. The last group, termed
further additional grounds of
appeal, was said to be in
substitution for the earlier
grounds filed on 8 August, 2001
and 28 March, 2002. In reality
only the omnibus ground and
three of the latter grounds were
together argued. Those three
were couched as follows:-
“1A The learned majority at
the Court of Appeal erred in law
when they held that there was
valid agreement by the
Defendant/Respondent/Appellate
(SIC) to pay 2½ months salary
per each year of service at the
Regional Maritime Academy, to
the
Plaintiffs/Appellants/Respondents.
1B. The learned majority at
the Court of Appeal erred, when
it held that there was a
conclusive agreement between the
parties, in the light of Exhibit
‘A8’ tendered by the Plaintiffs
as fresh evidence in the Court
of Appeal.
1C. The learned majority of
the Court of Appeal erred in
their conclusion that the
Defendant/Respondent had
admitted expressly that it
agreed to the 2½ months salary
per each year of service at the
Regional Maritime Academy and
therefore also erred when they
had held that the burden fell on
the
Defendant/Respondent/Appellant
to establish that
Plaintiffs/Appellants/Respondents
had rejected the said
agreement”.
I desire to dispose
of this appeal briefly by
calling in aid the law which
brought into existence the
Regional Maritime Academy, the
defendant herein, since many of
its provisions bear direct
relevance to certain aspects of
the instant litigation. That
law is of course the Regional
Maritime Academy Law, 1982
(P.N.D.C.L. 33), which repealed
the Regional Maritime Academy
Decree, 1979 (A.F.R.C.D. 70) and
revoked the Ghana Nautical
College Instrument, 1970 (L.I.
677). It further dissolved the
Ghana Nautical College
established by the said L.I.
677. The importance of section
7 of P.N.D.C.L. 33 deserves to
be reproduced in part as
follows:
“7(1) The Board which shall
be the governing body of the
Academy shall be autonomous and
accorded full international
status.
(2) Without derogation
from its functions under
subsection (1) the Board shall
have power –
to determine and supervise the
finances of the Academy”.
The language of section 7 is
very clear and unambiguous. It
singles out the Board of the
Academy to be its governing
body. It also guarantees the
Board’s autonomy in all matters
affecting the Academy and
accords it an international
status. It categorically gives
power and authority to the Board
to determine and supervise
financial matters of the
Academy. If therefore there
arises the need to determine
severance pay as end-of-service
benefit to its employees, for
instance, it is the Board which
bears full legal responsibility
to undertake such exercise.
Section 17 of P.N.D.C.L. 33 also
reads:-
“17(1) The rates of
remuneration and other
conditions of service of members
of staff and of all employees of
the Academy shall be determined
by the Board.
(2) The Board may make
bye-laws to provide for the
contribution by the Academy to
any superannuation or other
similar fund instituted for the
benefit of the staff and
employees of the Academy”.
It is my view that these two
provisions quoted above need to
be highlighted to demonstrate
the international nature of the
defendant/institution, its
autonomy over academic,
financial and administrative
matters, the extent of the
Board’s functions as well as the
exclusive or unique authority of
the Board in relation to
remuneration and conditions of
service of the Academy’s
employees. I venture to suggest
that it is in the light of the
foregoing that a proper and
effective evaluation of the
plaintiffs’ claim can be made.
The crux of the plaintiff’s case
is that following the
retrenchment of staff exercise
in or about 1994, their end of
service benefit was calculated
at three months’ salary and paid
to them irrespective of the
number of years each had been
employed by the defendant. They
were dissatisfied with the
quantum whereupon TEWU of TUC
entered into negotiations with
officials of the Ministry of
Transport and Communications as
well as other stakeholders. An
agreement was reached whereby
the defendant was to pay to each
of the plaintiff an award
calculated at two and a half
months salary for each year of
service to the defendant. The
defendant has reneged on the
agreement and has refused or
ignored to pay the end of
service benefit.
By “agreement” I presume the
plaintiffs are referring to the
contents of exhibit ‘A8’ dated
13 October, 1994 and exhibit ‘C’
dated 10 January, 1995. In
exhibit ‘A8’ there is a
paragraph at page 109 of the
record of appeal which states
that the Principal confirmed
that he would be in a position
to pay the amount involved, i.e.
¢93 million provided the payment
is spread over a period of
time. Even though this was
attributed to the Principal,
there is no evidence that the
Principal was mandated by the
Board of Governors to make a
commitment to pay. In exhibit
‘C’ there is no evidence of any
agreement on the part of the
defendant to pay anything to the
plaintiffs as a consequence of
the alleged negotiation. The
case of OBENG V. MFRAMAH
[1987-88] 1 G.L.R. 548, C.A. is
one of negotiations for a
settlement. Although I concede
that it was decided under
customary law, I believe the
principle is flexible enough to
apply to the instant case. At
page 551 thereof the relevant
portion of the proposition as
quoted from ZOGLI V. GANYO
[1977] 1 G.L.R. 298 pp. 300-301
reads thus:-
“It is well known that the
result of a negotiation for
settlement is not binding on the
parties until it is accepted by
both. But once it is accepted,
it is as binding on them as an
arbitration award”.
In the case before us there is
nothing to show that the Board
as the governing authority of
the defendant accepted the
outcome to any negotiation and
therefore it cannot be bound by
the contents of the two
exhibits.
It is also arguable that
although the Principal attended
the meetings called by the
Ministry of Transport and
Communications in the instant
case there is no evidence to
show that the Board delegated
its powers to negotiate with the
plaintiffs. On the authority of
NARTEY-TOKOLI V. VOLTA
ALUMINIUM CO. LTD. [1987-88]
2 G.R.L. 533, C.A. it is safe to
hold that the Principal lacked
the capacity to act for the
Board, and whatever agreement he
might have reached at those two
meetings was a nullity and
unenforceable against the Board
and the defendant.
What irresistibly flows from the
meetings as per exhibits ‘C’ and
‘A8’ is that, no conclusion was
arrived at. The so-called
negotiations never ripened into
fruition. In exhibit ‘A8’
appears the rubric “Chairman’s
Remarks”, and under it
appears the following words:
“The Chairman thanked members
for a fruitful discussion and
promised to communicate the
outcome of the meeting to the
Minister for the Board of
Governors consideration and
approval”.
Indeed there is no evidence on
the record that the Minister
communicated the outcome of the
meeting to the Board; and even
if he did, there is nothing to
show that the Board gave any
approval to what transpired at
the meeting. The legal effect
of such a scenario is
demonstrated in KOGLEX LTD.
V. FIELD [1998-99]
S.C.G.L.R. 451 where Atuguba,
J.S.C. had this to say:-
“The plaintiffs stressed the
fact that all the terms of
agreement were thrashed out at
the meeting of 14 September,
1985 … But the crucial matter to
consider is not whether the
terms of agreement were settled
but rather when were the
terms intended to have
contractual effect … The
parties, on the facts of this
case, intended only a written
and signed agreement to bind
them as a contract”. (emphasis
mine).
Therefore the issue
which arises is even if the
so-called negotiations were
effectively concluded, the terms
of those negotiations can never
come into effect until the Board
gives its approval. As long as
the Board failed to give its
approval, whatever terms were
arrived at remained moribund and
unenforceable.
It is on account of
the foregoing that I think the
Court of Appeal erred in its
majority decision. I will allow
this appeal and restore the
judgment of the trial High Court
and the minority decision in the
Court of Appeal. I enter
judgment for the defendant in
this appeal.
F. M. LARTEY
JUSTICE OF THE SUPREME COURT
W. A. ATUGUBA
JUSTICE OF THE SUPREME COURT
S.A.B. AKUFFO(MS)
JUSTICE OF THE
SUPREME COURT
J. ANSAH
JUSTICE OF THE SUPREME COURT
R. T. ANINAKWA
JUSTICE OF THE SUPREME COURT
COUNSEL:
Mr. David Kudaadzi for
Appellants.
Mr. William Addo for
Respondents.
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