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IN THE SUPERIOR COURT OF JUDICATURE FAST TRACK HIGH COURT SITTING AT ACCRA ON WEDNESDAY THE 15TH DAY OF FEBRUARY 2012 BEFORE HIS LORDSHIP MR. N. M. C. ABODAKPI J.

_________________________________________________         

SUIT NO. AC 293/2009

 

RISTISH CANADIAN INTERNATIONAL EDU. (BCIE): PLAINTIFF

 

VRS.

 

EDUCATION SOLUTION CONSULT                 :          DEFENDANT

__________________________________________________

 

PLAINTIFF – ABSENT

DEFENDANTS - PRESENT

 

 

 

 

JUDGMENT:

 

            On 28th day of July, 2009, plaintiff caused a writ of summons together with an accompanying statement of claim to be issued against the defendants.

Plaintiff’s case as gleaned from the pliant is that, it is a United Kingdom based student recruitment agency with offices in Ghana, Kenya Nigeria and the United Kingdom (U.K).

The 2nd defendant was described as the Managing Director of 1st defendant organization and that, she was in the employment of plaintiff as it’s office Manager from May, 2006, to May 2009.

Furthermore, it was alleged that, whiles, 2nd defendant was working for plaintiff, she had been given both verbal and written warnings to improve her performance but she failed or refused to do so.  And that as a result she was dismissed in April 2009.

It is plaintiff’s case that the 2nd defendant has breached the confidentiality clause contained in its contract with plaintiff by establishing the 1st defendant company within three (3) years after leaving plaintiff’s employment.

            On the other hand, the defence has alleged that following an advertisement in the Daily Graphic, a Ghanaian newspaper, by the plaintiff in 2005, advertising a vacancy for Office Manager, 2nd defendant applied and was invited for an interview.  It has been alleged that 2nd defendant was selected after the interview conducted by Directors of plaintiff company, and she was given the job of Office Manager, by word of mouth, and without a formal contract, with a promise that a formal contract will be worked on upon the arrival of the Directors in United Kingdom (U.K).

            Furthermore, 2nd defendant, alleged she started work without a formal contract, in May 2005, and that an unsigned letter was sent to her, offering her the job, and that upon reading the letter, she did not accept some terms in the letter, and this was made known to plaintiff, who withdrew the offer letter.  The fact that 2nd defendant’s name was wrongly stated, lack of provision of SSNIT – i.e. pension payments, as required by the National Pension’s Act, 2008, Act 766.  The requirement that 2nd defendant was to use her personal phone for official duties and unrealistic targets set in the letter, which 2nd defendant was asked to meet, the defence stated as the reasons for not signing or accepting the offer for the job contained in the letter.

            Still on the contract of employment, the defence alleged that, when, the first letter was withdrawn, another letter was sent to 2nd defendant, with a cover letter.

This second letter it was alleged was headed as a new contract, but did not remedy the deficiencies stated above, and was therefore, not accepted by 2nd defendant.

Then the allegation of a third letter on conditions of service was made and that even though there was no concluded contract, plaintiff’s Director spoke to 2nd defendant on phone and encouraged her to continue to work until a contract acceptable to all sides was made.

It is the case of the defence that, 2nd defendant continued to work on the mutual understanding reached which at best could be described as contract for services where her expertise were offered as an independent provider of services for remuneration and not as a contract of service, where she would have been seen as a bona fide employee of plaintiff/company placed on salary and strictly subject to the terms of a valid concluded employment contract as well as the code of the plaintiff organization.

            Further still, it is the defendants case that the Directors of plaintiff/company urged her to continue to work, and that it was based on her performance and output that plaintiff sought to renew her contract and also sponsored her daughter to U.K, and therefore the allegation of non-performance against her is borne out of malice.  It was alleged that plaintiff accused 2nd defendant of reporting it to Internal Revenue Service. And that she was a trade unionist and as a result, plaintiff sought to find fault thereafter with everything she did, are the other averments made.

The 2nd defendant averred that there is no valid contract between her, and plaintiff and that the confidentiality clause put in the last letter is unconscionable and constitute an infringement on 2nd defendant’s human rights.

            The under listed are the issues set down for determination, when direction was given by the court, after the close of pleadings:

1.         Whether or not the 2nd defendant was in the employment of the plaintiff organization from April, 2006 to April 2009.

2.         Whether or not the employment contract between the plaintiff and 2nd defendant contained a confidentiality clause preventing the 2nd defendant from working for or trading as a competitor agency for a period of three (3) years commencing from the date of termination of the contract of employment.

3.         Whether or not the 2nd defendant has breached the confidentiality clause in the contract of employment between her and the plaintiff.

4.         Whether or not the 2nd defendant has formed a competitor agency or organization (i.e. the 1st defendant) within three (3) years from the termination of the 2nd defendant’s contract with plaintiff in April, 2006.

5.         Any other issues that may emanate from the pleadings filed.

            The first issue listed above, which is about the status of 2nd defendant when she worked for plaintiff, shall be taken first.  It is very fundamental, and the resolution it will affect the other issues.

Evidence adduced by plaintiff’s representative and its only witness shall be reviewed, this will include answers they gave whiles under cross-examination.

Plaintiff has alleged that 2nd defendant was its employee, it follows that, it must tender cogent evidence that is sufficient, so as to have a favourable finding made in its favour.

In other words, plaintiff has to discharge the burden of proof on issue one (1), which shall be considered first.  This is an issue which is capable of positive proof. Therefore, plaintiff is under a legal duty to prove the issue.

The defence will also be required to establish the converse of issue (1) one, because it is their case that 2nd defendant was never an employee of plaintiff.

            Martha Quainoo Amankwah, representing plaintiff, testified as plaintiff, she described herself as the Office Manager and that 2nd defendant – Mrs. Appaih-Agyekum who was formerly the Office Manager of plaintiff is known to her.

            Her first material assertion on the status of 2nd defendant as an employee, took the form of EXHIBIT “A”, which she tendered to support the fact that she was such an employee as alleged.

EXHIBIT “A” entitled “LETTER OF EMPLOYMENT WITH BICE – IN REPRESENTATIVE INTO” it is addressed to Brandford Bervell Jnr. of Achimota – Accra, Ghana.

It is clear, it is not 2nd defendant’s letter of appointment that has been tendered.  Somehow, plaintiff succeeded in tendering EXHIBIT “A” again as EXHIBIT “B” on the blind side of the court.

            In continuation, the plaintiff testified to the effect that, 2nd defendant started work in June 2005 as Acting Manager and served a period of probation and was later confirmed in 2007, and EXHIBIT “N” was tendered on this.

            The next significant assertion made is not on how the 2nd defendant became an employee, but rather on how her appointment was alleged terminated.  EXHIBIT “C” was tendered, and plaintiff asserted, it was due to absenteeism, lack of performance, her behaviour, as a person who cannot work as team player.

The reason stated supra are in EXHIBIT “C” indeed, the evidence showed that, 2nd defendant has been dismissed, and was ordered to refund £2,000.00 to Mr. Nartey. EXHIBITS “K” written by one Mikel Avoke, and “M” written by one Noah Kwao, contains complains about 2nd defendant, who was described as not being polite to colleague workers and clients/students.

            Furthermore, the testimony of Theophilus Tettey Nartey (PW1), showed that he is the Country Manager of plaintiff/organization, and 2nd defendant is known to him, because she had worked as an employee of plaintiff until in 2009, when her appointment was terminated.

He anchored his assertion that 2nd defendant was their employee, on EXHIBIT “N”, which is dated September 2007.

            The next consideration is what plaintiff’s representative and PW1, said whiles under cross-examination on (issue one) under consideration.

Martha Quainoo Amankwah was tested on her assertion that 2nd defendant was an employee of plaintiff, she admitted, EXHIBIT “A” she tendered is not her (2nd defendant’s) appointment letter.  And promised to furnish same later on.

When it was put to her, 2nd defendant was not formally appointed as an employee of plaintiff, she stated, she had worked for plaintiff.

EXHIBIT “1” was tendered through plaintiff’s representative, and she was confronted with the fact that 2nd defendant did not sign the contract or offer of appointment letter.  It has been gleaned from the record that, plaintiff’s representative said, she does not know why, she refused to sign the contract.

She also said she will not give any other comment on EXHIBIT “1” and failed to produce before the court 2nd defendant’s appointment letter as promised earlier on in the trial.

EXHIBIT “1” consists of a covering letter, which gave an indication that a new letter of employment was being put before 2nd defendant.

The exhibit has not been signed either by the Directors of plaintiff/organization or 2nd defendant.

            It is plaintiff’s case that 2nd defendant was dismissed for lack of performance, and its representative insisted that, that was the case.

The cross-examination of PW1 – Theophilus Tettey Nartey also revealed that, it is plaintiff’s case that 2nd defendant has a contract with plaintiff.  He attributes his position to the fact that he has personal knowledge of the fact he was asserting because of his personal involvement in it.

This witness’s answers are to the effect that 2nd defendant has a conclusive contract with plaintiff, even though the record also showed that he admitted there were some deficiencies with the agreement.  But he expressed surprise about reasons defendant gave for not signing the contract.

            Besides the line of defence disclosed when the outline of answers given by plaintiff and PW1 were stated, it is the case of the defence that neither was EXHIBIT “A” the letter of appointment relevant to the issue under consideration nor, has there been any evidence offered to support the assertion.

The defence cross-examined to the effect that, the letter of employment, were not conclusive and therefore, do not represent a valid contract of employment it was asserted, the offer of employment letter was defective as it had no provision on pension, SSNIT payment, had the name of defendant spelt wrongly, and required of defendant to use her personal phone for official business, hence defendant rejected same.

            Another significant assertion made by the defence is that 2nd defendant left the job in frustration but not because she was incompetent and lacked also, leadership qualities.

            The examination also showed what the defence described as a contradiction, where in evidence-in-chief of plaintiff it was said 2nd defendant started work in 2005, and yet 2006, was mentioned in cross-examination.

            Furthermore, it was said, because defendant insisted on her rights, she was tagged by plaintiff a trade unionist and an agitator, and the work environment as filled with hostility, due to the unresolved complaints she raised with the offer letter.

The defence hinted that, there is evidence which showed that on 8th April, 2009, 2nd defendant was acknowledged as a successful worker, then in May 2009, plaintiff purport to terminate her employment citing incompetent as reason.  And EXHIBIT “6” series with 8th April, 2009 and EXHIBIT “7” are the confirmations of the assertions of defendant.

It was asserted malice and hostility was what led to that decision, where a successful worker became an incompetent worker, just within thirty (30) days.

And that defendant left the job, before plaintiff sought to dismiss her.

            The next stage in the review and assessment of evidence led, is what 2nd defendant said about her status as a worker of plaintiff, in terms of the contract of employment.

Her evidence showed that, she saw the advertisement for job of Office Manager  of BICE, she applied, and was invited for an interview, and later given an offer of employment contract, she recounted the defects, (as has been reviewed supra) with the offer letter, and the reason for rejecting same.  She tendered EXHIBIT “2” as her application.

She testified to the effect that there was a second offer of employment letter, which she rejected for same reasons as the first one.

And then, a third one, which was also rejected, because she refused to sign.

            EXHIBIT “3” dated September, 2006, is a covering letter and another offer of employment letter, it has terms and conditions of service, stated therein.  And EXHIBIT “4” is dated September, 2007, it is entitled, Letter of Employment with BICE – Ghana Office Manager.

In it the plaintiff wrote as follows:

“We hereby confirm that we have extended your contract for a period of 3 years ending November 2010”

This exhibit, is just a letter, when its form is examined from its beginning as well as its concluding part. But in terms of content, conditions of service have been enumerated.  It has neither been signed nor executed by any party.  And presupposes there was a valid contract, which was being extended.

            In continuation of her account defendant stated EXHIBIT “4” was also rejected because it did not only fail to remedy her complaints but contain for the first time a confidentiality clause.

            Whiles under cross-examination, when plaintiff stated defendant worked for it, and so she was in its employment, 2nd defendant asserted she was encouraged to work even without a contract, and so she pressed on and worked for plaintiff.

            When questioned on the duration she worked for plaintiff, and the length of relationship being offered as basis for stating she was in plaintiff’s employment, 2nd defendant answers showed that for two years she had worked for plaintiff, then the confidentiality clause was inserted.

            Furthermore, these primary facts were raised with defendant, and with them plaintiff sought to show she was a bona fide employee.

It was said the contract with defendant was valid, that she accepted the confidentiality clause in the contract, that she gave same contract to others (or other employees) and further still, the acceptance of salary/income was cited as evidence that defendant had accepted the contract in the offer of employment sent to her.

            The following are the responses offered by the defendant.  She denied that there was a valid contract, and that she did not communicate her acceptance of the offer, and in respect of her giving the same contract she is rejecting to others, defendant stated she did so just because that was her schedule and that indeed, she signed FOR the Directors (Nazmina Panju and Cliff Dedynski).

This is how defendant explained further the issues raised with her:

“The contract was never accepted.  That is not true I never accepted it, to me accepting that contract was for me selling or forfeiting my birth right, and my human right, aptitude, skills, experience that I got over the years.  I will not accept to throw away…..

I did not accept the contract the confidentiality clause I did not accept it.”

            The defendant abhorrence of the confidentiality clause, and the other provisions or clauses in the offer letter is evident in the answer quoted above.

            As noted already plaintiff has to prove that it has a valid and subsisting contract of employment with 2nd defendant.

In that regard, plaintiff has raised facts from which its desires that a presumption of 2nd defendant being its worker, must be made, in its favour.

            A valid contract must be rooted in the common law principles of OFFER and ACCEPTANCE, CONSIDERATION and an INTENTION to CREATE LEGAL RELATIONS.

Therefore, a mere request for information or an indication of good intent in respect of a future conduct, as well an invitation to treat or an invitation to make an offer, will not ground a valid contract.

The other important characteristics of a valid contract are that one party must agree to perform an undertaking and the other party must accept the performance.

The agreement must be supported by consideration, which is reciprocal.  And the parties must have the requisite capacity to enter the agreement, and the object of the agreement must be legal, and giving rise to legally recognized obligations.

            Plaintiff has made averments and assertions of having employed 2nd defendant and EXHIBIT “A” and “B” [which are the same] proffered in support are most irrelevant and have no evidential value.  EXHIBIT “N”, dated September 2007, sought to extend an existing contract, but it is a document that has neither been signed nor executed.  It could be seen that the document is meant to be an employment letter, as distinct from an appointment letter.

            In rebuttal the defence has tendered EXHIBIT “1” part of which is a letter of employment dated September, 2006, it sought to offer conditions of service contained therein to the 2nd defendant, it is not signed by any of the parties.

EXHIBIT “3” is the same as EXHIBIT “1”, and the covering letter gave an indication as to some complaints that the 2nd defendant has raised, which the plaintiff sought to address by the offer of employment letter.

In EXHIBIT “4”, tendered by the defence, the point was made that, it was not signed, and a confidentiality clause was introduced into the offer of employment document.

            The defence denied signing or accepting the various offers made, and reasons for the rejection have been reviewed supra.

            I have found that all these documents that relate to the offer of employment to 2nd defendant have not been signed, and are therefore not binding on 2nd defendant.

Besides, plaintiff must convince the court that its offer of employment document is in conformity with the Labour laws of Ghana. The Labour Act, Act 651/03 in sections 12 (1) and 12(2) provides:

“Contract of employment -

12(1) The employment of a worker by an employer for a period of six months or more or for a number of working days equivalents to six months or more within a year shall be secured by a written contract of employment.”

 

      “12(2) A contract of employment shall express in                   clear terms the rights and obligations of the parties.” 

Furthermore, section 13 is also relevant to the issue under consideration.

The section provides:

“Subject to the terms and conditions of a contract of employment between an employer and a worker, the employer shall within two months after the commencement of the employment furnish the worker with written statement of the particulars of the main terms of the contract of employment in the form set out in schedule 1 to this Act, signed by the employer and the worker.”

            The offer of employment document has flouted the essential requirement of a valid employment contract as provided for by statute. Therefore, how can plaintiff insist that it has a valid contract with 2nd defendant?

Plaintiff’s intent is to employ, 2nd defendant on contract for a specified period as could be gleaned from the various employment contract, tendered (i.e. EXHIBIT “N”, EXHIBIT “1” and EXHIBIT “3”)

But even that type of contract should be accepted by both sides with the material terms particularized, and the document signed, signifying approval on both sides.

            Assuming there are some extenuating factors in favour of plaintiff, even though it failed to comply with the statute, can there be a presumption of worker, employer status, in favour of the employer, just because, the employee rendered services and received remuneration in respect of the employer’s work?

            A brief history and tests used in determining whether a person is an employee or not is crucial to the resolution of this issue.

            A contract of employment as it is known today evolved out of master-servant relationship at common law.  Where a master supplies work to the worker, provides his medicals and safety at work, indemnifies the worker and pays his remuneration, then that worker is to all intents and purposes a servant of the master.

On the other hand, where the worker obeys lawful orders of owner of a business, serves that owner only, accounts to that owner faithfully and is paid for the services rendered to that owner of the business, then that owner is the master of that worker.

            It is out of this relationship that the concept of CONTRACT OF SERVICE and CONTRACT FOR SERVICE evolved.  In a contract of service, the worker is employed as a part of the business.  But the contract for service, the worker is only accessory to the business.

A well-known example of a contract for service is the independent contractor who undertakes to produce a given result but he is not under the control of the employer.

Furthermore, there has been tremendous legislative in roads made to regulate the employee/worker and employer relationship.  Thus in accordance with statutory requirements, contracts of employment are reduced into writing, and the terms must be specified.

But whether the contract is one of service or for service, is still relevant in determining whether a particular worker is an employee of the employer or NOT.

            The test mechanism fashioned over the years to determine a worker’s status are multiple and complex. 

Firstly, there is the CONTROL TEST, where evidence on supervision direction and control of work done by the worker, by the employer is used to determine the former’s status.

Secondly, as the size of businesses became enormous and complex, and employees have become more and more professional the employment relationship became more impersonal and the direct control by the employer becomes less effective or completely impossible.  So the INTERGRATION or ORGANISATIONAL Test was developed by the courts.  In this regard the observation of, LORD Denning L. J. is important as found in the case:

                                    STEVENSON JORDAN & HARRISON

                                                            VRS.

                                    MACDONALD & EVANS (1952) 1TRL 101

He observed that whether a person was an employee or not no longer depended on whether he submitted to orders but:

                                    “it depends on whether the person is part and parcel                                       of the organization.  A person under a contract of                                            service does his work as an integral part of the                                          business whereas a person under contract for                                                  services although he might do his work for the                                                             business is not integrated into it but is only an                                                      accessory to it,”

Thirdly, because of deficiencies and challenges in the ORGANISATIONAL test, the INDICIA TEST which has four factors as its fulcrum emerged.  The factors are:

(a)          The employer’s power to select an employee

(b)          The payment of the wages of the employee

(c)          The right to control the manner in which work was done, and

(d)          The right of suspension or dismissal [SHORT VRS. HENDERSON LTD. 1946, 62 TLR 427] refers.

This third test was also inadequate as factors (a), (b) and (d) are only indices of the existence of a contract and not the nature of the contract, and factor (c) is the old control test. 

            Aside all these, the Multiple test has enjoyed acceptability.  It is also called the Economic Reality Test.

This test cuts across the control and integrated test as well as many other relevant factors.

The test required the court to take into consideration the factors of control of the worker, ownership of the tools used by the worker, the chance of making profit by the worker, and the risk of loss by the worker.  Lord Wright who formulated this test in:

                        MONTREAL LOCOMOTIVE WORKS LTD

                                                VRS.

                        MONTREAL (1947) 1 DLR 161,

did not intend the four factors to be conclusive. So factors such as remuneration by way of wages, salaries, tax and social security contribution are relevant determinants as well.

In addition, factors as membership of company pension scheme, holiday pay, payment when absent for illness, prohibition on working for competitors and disciplinary control over the worker are equally important considerations.

            The Mutuality of obligation test appears to be the modern trend and has gain currency.  And under this, a contract of employment is only deemed to exist, if there is formal legal obligation on both sides.

            It is apparent that no, single test provides a complete answer to this vexed question as to whether a worker, is in a contract of service or contract for service in modern employment relationship.

Each relationship must be considered on its merits, based on the facts and the circumstances.  All factors must be weighed in a balance or the judicial scale, and must not be applied mechanically.

One “Heavy-weight” or dominant factor can out weigh four “Light weight” factors.

            Indeed, in the case:

LEE  VRS. CHUNG [1990] 2 WLR 1173, the PRIVY Council held that, the issue is one of fact and not law.

            Plaintiff has asserted that, it gave a job or work to 2nd defendant which she has done over the years.  And that she has been paid salary, which she had received, in addition to trips abroad and medical treatment for her sick daughter in U. K etc.

Apart from the cost of treatment of 2nd defendant’s daughter, which has been contested, the defendant did not deny working for plaintiff for almost three years and receiving salary.

            If the control test was a sufficient guide, the assertions made by plaintiff which were admitted by 2nd defendant, would have been enough to hold that, 2nd defendant was plaintiff’s employee.

As regards the ORGNISATIONAL test or integration test, the aggregated of evidence on the record showed that plaintiff resisted paying SSNIT – contribution in respect of 2nd defendant’s work.  Plaintiff did not deny the fact that it gave 2nd defendant names, such as “AGITATOR” and “TRADE UNIONIST”.

Thus it was unacceptable to freely organize and belong to a trade union, if one worked for plaintiff.  It was equally unacceptable to insist on SSNIT contribution in respect of plaintiff’s work.

However by the National Pension Act, Act 766 section 3 every employer is enjoined to pay SSNIT contributions, so as to provide for the future of its employees, when they retire.

The Labour Act, Act 651/04, sections: 10 (d) 79, 80 and 81 has copious provision on workers rights and the obligation imposed on employers to permit workers to freely organize and belong to unions.

The history of trade Unionism worldwide showed that but for unions, industrialist and job owners, will treat and keep labour or workers as slaves, and make them subservient to capital.

            Plaintiff has evinced an intention to flout Ghana’s labour laws as well as the pension laws.

The above is not a mark of an employer who sought to treat a worker as part of the organization.

            The evidence on the record showed that plaintiff’s has failed the Mutuality of obligation test, very miserably.

Firstly, it failed to reach agreement with 2nd defendant on the material terms of her engagement, and pretended there was a contract that it was extending or re-newing, in respect of 2nd defendant’s job.

Secondly, it exercised control over 2nd defendant in terms of the work she was required to do, and tools of work, in an arbitrary manner, the record showed that plaintiff insisted that 2nd defendant must use her personal cell phone for official work.

Thirdly, plaintiff determined when to adjust up or down 2nd defendant’s remuneration, without a clear cut criterion acceptable to both sides.  The demand on 2nd defendant refund £2,000 is an example.

            There are other facts on the record that showed that there was no mutuality of obligations and so, 2nd defendant under the arrangement they had, would have been unable to successfully pursue any action against plaintiff as her employer, whiles the plaintiff even sought to dismiss her without following any rules of procedure.

            The material and heavy weight factor that will determine the question of 2nd defendant’s status as an employee or otherwise is the fact that, plaintiff failed to engage 2nd defendant either as an employee, employed for a specified period, or as a permanent staff.  This constitutes grave violations of the Labour Law, Act 651/04.

Therefore, 2nd defendant worked and received remuneration as an independent contractor.  She was a worker who rendered services under an arrangement that amount to or could best be described as a contract for service.  A contract or an agreement to render services as an independent contractor without a formal agreement [with terms of engagement specifically provided for] is not obligatory.

But it is unlawful to seek to employ a worker for up to three years without a formal written contract.  In this case section 75 of the Labour law on, legal presumption of contract after the expiration of six (6) months of continuous service of the worker to the same employer shall not apply, because 2nd defendant has raised objection to the terms of the offer of employment letter.

 

BY COURT:            

1.            The plaintiff has failed on the preponderance of the probabilities to establish issue “A”, which is essentially about the status of 2nd defendant as being plaintiff’s employee, and by that, plaintiff has failed to establish the other issues listed on the Application for Direction.

2.            Plaintiff’s action/claims as endorsed on the writ in its entirety are dismissed.

3.            Cost of GH¢5,000 is awarded against plaintiff and in favour of defendant.

 

 

                                                              (SGD.) N. M. C. ABODAKPI

                                                            JUSTICE OF THE HIGH COURT

 

 

 

SAVIOUR KUDZE FOR PLAINTIFF - PRESENT                     

ISSAH ADAM FOR DEFENDANTS – PRESENT

 

 

 

 

 

 

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