VOLTA ALUMINIUM CO LTD v. TETTEH AKUFFO & ORS
2004
SUPREME COURT
GHANA
CORAM
- KPEGAH, J.S.C. (PRESIDING)
- ATUGUBA, J.S.C.
- MISS AKUFFO, J.S.C.
- BADDOO, J.S.C.
- DR. DATE-BAH, J.S.C
Areas of Law
- Employment Law
- Contract Law
- Civil Procedure
2004
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana addressed an appeal arising from redundancies at Volta Aluminium Company Limited (VALCO) affecting unionised employees represented by the Industrial and Commercial Workers’ Union (ICU). After a VRA-induced shutdown, VALCO declared redundancy on 16 May 1994 and, relying on article 15(e) of the collective bargaining agreement, paid two months’ salary in lieu of notice along with end-of-service benefits and a goodwill package. A wage re-opener effective 1 July 1994 later granted a 71.52% increase. The plaintiffs argued their terminal benefits should reflect remuneration that would have accrued had two months’ notice been given, by reading article 15(e) with article 13(a), and challenged the fairness of the union’s negotiations. Writing for the Court, Date-Bah JSC held that article 15(e) stands alone and authorises payment in lieu based on the termination-date salary; courts cannot police the fairness of collective agreements; NLCD 157 s 33(9) applies only to oral agreements; and plaintiffs failed to prove oral contracts. The Supreme Court allowed VALCO’s appeal and restored the High Court’s dismissal.
J U D G M E N T
KPEGAH JSC. I have had the advantage of reading beforehand, the judgment to be delivered by my learned brother Dr Date-Bah JSC. I agree with his reasoning and conclusion. I have nothing useful to add.
F. Y. KPEGAH
JUSTICE OF THE SUPREME COURT
MISS SOPHIA AKUFFO JSC. I have also had the advantage of reading beforehand, the
judgment of my learned brother Dr Date-Bah JSC. I also agree with his reasoning and
conclusion.
S.A.B. AKUFFO (MS)
JUSTICE OF THE SUPREME COURT
DR DATE-BAH JSC. This appeal turns on the interpretation to be given to certain provisions in a collective bargaining agreement between the employer of the plaintiffs-respondents and their trade union. The facts of the case are not in dispute.
The facts
The plaintiffs-respondents (hereafter called the plaintiffs), used to be employed by the defendant-appellant company (hereafter called the defendant). They were members of the Industrial and Commercial Worker’s Union (ICU) of the Ghana Trades Union Congress. On 16 May 1994, the defendant terminated the employment of the plaintiffs (along with other employees) on the ground of redundancy. In doing this, the defendant purported to be acting pursuant to article 15(e) of the labour agreement between the ICU and the defendant company. This labour agreement was the collective bargaining agreement between the two parties. By virtue of section 10(2) of the Industrial Relations Act 1965, (Act 299), its provisions were incorporated into the individual employment contracts of the plaintiffs. Article 15(e) is in the following terms: “(e) Employees to be declared redundant will be given two (2) months' notice or paid in lieu.”
The defendant company paid the plaintiffs two months’ salary in lieu, exercising what it interpreted as an option available to it under the above provision. However, the plaintiffs were aggrieved by this act and instituted action against the defendant claiming the following reliefs:
“(i) a declaration that the calculation of their terminal benefits should be based on the amount of remuneration which would have accrued to them by July 15 1995;
(ii) an order directing the defendant to pay the plaintiffs the balance of their terminal benefits based on (i) above; and
(iii) interest on the balance from the date it became due to the date of payment.”
If the plaintiffs’ terminal benefits were to be calculated in accordance with the formula in relief (i), this would imply bringing into account the outcome of wage r