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ARYEETEY, J.A.
A background to this
appeal is as follows: In December 1986 the
plaintiff/respondent was employed as Commercial Manager
of the defendant/appellant company and his appointment
was confirmed exactly a year later. However by letter
dated 21st February 1997 the company demoted him to the
rank of Area Commercial Officer. The matter did not end
there. On 5th January 1998 the defendant/appellant
company by its Chairman of Board of Directors wrote a
letter, exhibit C to the plaintiff/respondent
terminating his appointment. I would quote exhibit C in
full. It reads:
“Dear sir,
TERMINATION OF
APPOINTMENT
This is to inform you
that your services with the company will no more be
needed and consequently your appointment with the
company is terminated with effect from 15th January
1998. The decision to terminate your appointment is
being taken to safeguard the interest of the company by
ensuring its smooth and unfettered operations.
The Board has observed
that:
(1) Since your
inability to get the position of Managing Director,
which you vied for, with the present Managing Director
you see every action taken by him as aimed at
victimising you.
(2) You Find it
impossible to work under the general manager who in your
own claim has been your subordinate officer for the last
10 years and who has suddenly been ‘promoted' over and
above you. Refer your letter dated 24th February 1997.
(3) Your demotion to
Area Commercial officer arising from poor performance is
seen by you as the work of the Managing Director, as a
result of which you are not prepared to take
instructions from him or the General Manager.
The policy of the
company is to derive optimum performance from its
employees but it is sad to note that since the
interviews you appear to be frustrated and instead of
putting in your best you are rather sabotaging the
efforts of the new management team. This cannot be
accepted.
Further the Board has
observed that in taking issue with the company in the
recent past in certain quarters and with some persons
over purely company internal matters you are in serious
breach of the established code of conduct.
In accordance with
section 63 therefore of the Senior Staff Conditions of
Service, your appointment with the company is
terminated. The Accounts Manager is hereby advised to
pay you 2 months salary in lieu of notice and to pay you
all entitlements due you in accordance with the Senior
Staff Conditions of Service. Any indebtedness owed the
company will similarly be deducted from your
entitlements.
Thank you for your
services over the years.
Yours faithfully
For FASCOM (U.R.)
LIMITED
J. I. ODZEYEM
CHAIRMAN
BOARD OF DIRECTORS”
Not satisfied with this
the respondent brought an action in the High Court
asking for the following reliefs:
(1) "(1) A declaration
that the demotion of the plaintiff to the rank of Area
Commercial Officer was unwarranted and to that effect
wrongful.
(2) A declaration that
the demotion of plaintiff to the rank of Area Commercial
Officer on the ground of inefficiency was a disciplinary
action, which called for disciplinary procedure prior
thereto.
(3) A declaration that
the demotion of the plaintiff from the rank of
Commercial Manager to that of Area Commercial Officer
was a breach of terms of plaintiff’s employment with the
defendant company.
(4) A declaration that
the termination of the plaintiff's services with the
defendant company was wrongful, in that the reasons
assigned for such termination called for a disciplinary
procedure prior there to.
(5) Damages for
wrongful termination of plaintiff’s status from that of
Commercial Manager to Area Commercial Officer.
(6) Damages for breach
of plaintiff’s terms of employment.
(7) Damages for
wrongful termination of plaintiff’s services to the
defendant company.
(8) An order of the
court that the plaintiff be paid salary and other
allowances due to plaintiff as a Commercial Manager from
date of his demotion to date of judgment in this suit.
(9) An order that
plaintiff be paid his salary and other related
allowances from date of termination of his service with
the defendant company to date of final judgment in this
suit.”
The judgment of the
court below declared the demotion of the respondent from
the rank of Commercial Manager to the rank of Area
Commercial Officer as well as his eventual termination
as null and void. The only ground of the appeal is that
the judgment is against the weight of evidence.
In his judgment at page
55 of the record of appeal the learned trial judge made
the following observations:
"Now 'Termination' and
'Dismissal' are different considerations under the Terms
of Employment, exhibit A. 'Dismissal is provided under
section 54 (A); and 'Termination' is provided under
section 63 of exhibit A. These, in my view, are not
synonymous terms. Under section 54(A) the only authority
of the company, which could dismiss a top management
staff like the plaintiff was the Board. Under section
63, 'the employment of an officer may be terminated by
the company at two months notice or by payment of two
months salary in lieu of notice'. Now as to which
authority of the Company could terminate the appointment
of a top Management Staff like the plaintiff, section 63
is silent. But taking a queue from section 54(E) in
respect of dismissal of top-management Staff, I can
safely say that the Board was the only authority of the
company that could terminate the appointment of a
top-management staff like the plaintiff”.
Before I go on further
with the judgment in this appeal I think it would be
appropriate to quote in full section 54(E) of SENIOR
STAFF CONDITIONS OF SERVICE, exhibit A. It is as
follows:
“DISCIPLINARY PROCEDURE
(a) The disciplinary
authority shall be as defined in the personnel manual.
Where the disciplinary authority considers that a formal
disciplinary action should be instituted against an
officer he shall either prefer written charges against
the officer who shall be required to answer such charges
within such period as may be specified by disciplinary
authority.
Where the officer fails
to answer the charges within the specified period the
disciplinary authority shall, if it is satisfied that in
the light of the facts upon which the charges are based,
the officer is guilty of the offence, impose the
appropriate punishment on the officer.
(b) Where the officer
answers the charge, the disciplinary authority will
determine the appropriate action/measures to take in the
circumstances.
(c) Where the offence
appears grave to the disciplinary authority he may cause
a full-scale investigation to be made either through the
appointment of an internal committee of enquiry or an
agency as he may consider appropriate.
(d) Where an internal
committee of enquiry or an agency or another person is
appointed to investigate the offence, the officer who is
being investigated shall be given the opportunity to be
heard and to defend himself.
(e) The report of an
enquiry, agency or another person shall be declared null
and void if the officer was denied a hearing and was not
given the opportunity to defend himself unless the
officer being investigated, refuses, declines, absconds
or shows unwillingness to appear before the committee,
agency or sole person appointed to investigate.
(f) Where such a
committee, agency or another person recommends dismissal
or termination, this will be placed before the
disciplinary committee for further action.”
I quite agree with the
learned trial judge that there is a marked difference
between “Termination” and "Dismissal" under exhibit A.
Whereas under section 54(E) of exhibit A both
“Dismissal" and "Termination" would have to be preceded
by a "Disciplinary Procedure”, under section 63
“Termination” would not need to follow “Disciplinary
Procedure”. When we come to “Demotion”, which is
relevant in this appeal, no mention of it is made
directly under section 54(E). However in looking for the
appropriate part of exhibit 54(E) to fit “Demotion” into
what comes to mind is section 54(E) (a), which could
find support with section 54(E) (g). As quoted above
they are as follows:
“(a) The disciplinary
authority shall be as defined in the personnel manual.
Where the disciplinary authority considers that a formal
disciplinary action should be instituted against an
officer he shall either prefer written charges against
the officer who shall be required to answer such charges
within such period as may be specified by disciplinary
authority.
Where the officer fails
to answer the charges within the specified period the
disciplinary authority shall, if it is satisfied that in
the light of the facts upon which the charges are based,
the officer is guilty of the offence, impose the
appropriate punishment on the officer.
(g) Where such a
committee, agency or another person recommends dismissal
or termination, this will be placed before the
disciplinary committee for further action.”
According to section
54(E) (a) “the disciplinary authority shall, … impose
the appropriate punishment on the officer”. Which means
the disciplinary authority would be entitled to impose
the punishment of demotion on an officer who is guilty
of the offence with which he is charged. Section 54(E)
(g) makes it clear that it is only where recommendation
for dismissal or termination comes from a body other
than the disciplinary committee that that would have to
“be placed before the disciplinary committee for further
action”. Since the demotion of the respondent for all
intends and purposes represented a disciplinary action
on the part of the appellants there ought to be evidence
on record that the procedure set out in section 54(E) of
exhibit A was followed. Paragraph (e) of section 54(E)
is the relevant portion of the rules set up by section
54(E) to look at. As a reminder it reads: “The report of
an enquiry, agency or another person shall be declared
null and void if the officer was denied a hearing and
was not given the opportunity to defend himself unless
the officer being investigated, refuses, declines,
absconds or shows unwillingness to appear before the
committee, agency or sole person appointed to
investigate”. In the instant appeal the disciplinary
authority did not formally charge the respondent with
any office neither was the respondent given a hearing or
afforded any opportunity to defend himself. In the
circumstances, therefore, I cannot agree more with the
learned trial judge that in line with paragraph (e) of
section 54(E) quoted above, the demotion of the
respondent from the rank of Commercial Manager to Area
Commercial Officer was wrongful. Therefore the appeal in
that regard fails and it is accordingly dismissed. The
other aspect of the appeal has to do with the High
Court’s conclusion that the termination was wrongful. As
I have commented above termination of an employee under
section 54(E) could either be as a result of a
disciplinary action or as a result of decision by the
company to dispense with the services of an employee
under section 63 of Senior Staff Conditions of Service,
exhibit A. According to section 63, “The employment of
an officer may be terminated by the company at two
months notice or by the payment of two months salary in
lieu of notice”. It means under section 63 provided the
employer gives two months notice before the termination
or pays two months salary to the employee in lieu of
notice, termination of the employee would not be
wrongful. In the instant case, just as the case of the
respondent’s demotion, there is no evidence that the
appellants instituted any disciplinary proceedings in
accordance with section 54(E) in the course of which the
respondent was charged and given the opportunity to
defend himself. It might be implied, therefore, that the
appellants’ termination of the respondent’s appointment
was not as a result of any disciplinary action under
section 54(E). The conclusion of the letter of
termination would make things clear. It reads: “In
accordance with section 63 therefore of the Senior Staff
Conditions of Service, your appointment with the company
is terminated. The Accounts Manager is hereby advised to
pay you 2 months salary in lieu of notice and to pay you
all entitlements due you in accordance with the Senior
Staff Conditions of Service. Any indebtedness owed the
company will similarly be deducted from your
entitlements”. However the problem we have with the
termination letter, exhibit C quoted above is that it
assigns reasons for the termination of the respondent’s
appointment. To the respondent that represented his
condemnation without being charged formally and given an
opportunity to defend himself which makes his
termination wrongful.
In the case of
Consolidated African Selection Trust v. Nketia reported
in [1971] G.L.R. 363, this court, in its judgment read
by Apaloo, J.A. (as he then was) commented on the right
of the employer, the appellant in this appeal, to
disclose or withhold reasons for the termination of the
appointment of an employee at pages 369 and 370 of the
report a follows:
“The rights and
obligations of the parties on this issue have been
exhaustibly set out in paragraph (4) (a) of exhibit D as
amended. I have already read that paragraph and I will
not re-read it. Under that clause, the company was
clearly entitled to terminate the respondent’s
employment but before doing so, it must give him three
months’ notice of this. It has not done so but paid him
three months’ salary, which is equivalent to the same
thing. I cannot see what other obligation it owed the
respondent. The respondent seemed to have thought that
the company was under a contractual obligation not to
exercise its right of termination without disclosing to
him its reasons for so doing. That belief grounded the
averment in paragraph (4) of the statement of claim. I
can see no basis for this belief. It would have been in
consonance with ordinary business etiquette if the
company had been forthcoming with the respondent and had
informed him of its reason for thinking that his
services be dispensed with. It is, of course possible
that sound reasons of company policy convinced the
former to withhold its reasons. This is a matter in
which infinite speculation is possible.”
Another instance that
has a more direct bearing on the issues that confront us
in this appeal is another judgment of this court in the
case of Texaco Africa Ltd. v. Bedu reported in [1978] 1
G.L.R. 307, in which Apaloo, J.A. (as he then was) had
this to say at pages 313 and 314 of the report:
“At all events, as in
giving the plaintiff one month’s notice of termination
the company conformed with clause (2) of the agreement,
we asked counsel what the wrongfulness of the company’s
action consisted of. His answer was that because it had
given a reason for the termination, which was
contestable. When we further asked counsel if instead of
giving a reason for the termination, it merely gave
notice without assigning any reasons, he would still
complain of unlawful termination, he said he could not.
This contention was not at all attractive and counsel
could not even make it so… In this case, the company,
though not contractually obliged to do so, did the
plaintiff the courtesy of giving him why it thought its
business association with him should come to an end.
That reason makes sense even to those uninitiated in the
intricacies of business. We reject the contention that
the agreement entitles the plaintiff to contest the
validity of that reason from a business standpoint.”
In other words so long
as the employer satisfies the contractual condition
under section 63 of exhibit A of giving sufficient
notice to terminate to the employee or makes the
appropriate payment to the employee in lieu of notice,
he would not be required to prove the validity of any
reason that he may assign for the termination. I am
therefore of the view that the termination of the
respondent’s appointment by the appellants was not
wrongful and not in breach of section 54(E) of
exhibit A. Accordingly the appeal respecting the alleged
wrongful termination of the respondent’s employment
succeeds and the judgment and orders of the High Court
in that regard are set aside. Since the appeal with
regard to the wrongful demotion of the respondent from
the rank of Commercial Manager to the position of Area
Commercial Officer fails, I agree with the learned trial
judge that the respondent should be paid the difference
between what he should have earned as salary and
allowances as Commercial Manager and what he received as
Area Commercial Officer from the date of his demotion
from the grade of Commercial Manager to the date of his
termination as Area Commercial Officer. The payment to
the respondent should attract interest at the prevailing
bank rate on the date judgment of the court below and
from that date to the date of payment.
B.T. ARYEETEY
JUSTICE OF APPEAL
I agree
K. TWENEBOAH-KODUAH
JUSTICE OF APPEAL
I also agree
G. M. QUAYE
JUSTICE OF APPEAL
COUNSEL
MR. THADDEUS SORY FOR
DEFENDANTS/APPELLANTS
MR. PHILIP ADDISON WITH
MR. KWAKU ASIRIFI FOR PLAINTIFF/RESPONDENT |
