GCNet loses arbitration, ordered to pay staff redundancy

A three-member arbitration panel under the auspices of the National Labour Commission (NLC) has ruled in favour of about 150 staff of Ghana Community Network Services Limited (GCNet) over a redundancy dispute with GCNet.

Consequently, the arbitration panel has ruled that GCNet is under obligation to pay each of the staff a redundancy package in accordance with the company’s policy “without any adjustment or variation”

“The effective date for the redundancy is August 31, 2020 and this shall be the last day of employment of the affected staff with GCNet,” the panel held in a ruling dated September 4, 2020.

The arbitrators appointed by the NLC and the two parties were Mr Charles D. Antwi, Mrs Anita Wiafe Asinor and Mr Paul Osei Mensah.

Termination

GCNet was an information technology firm which used to facilitate trade services at the country’s ports and had a contract government until 2023.

In April this year, the government terminated the contract, leading to a shutdown of its operations in May, this year.

The government cancelled the contract to allow the full rollout of a new customs clearing system, Uni-Pass, which according to the Ghana Revenue Authority (GRA), would centralise the processing and handling of all import and export documentations, a system known as a single window clearing system.

As a result of the termination of the contract, GCNET decided to lay off some of its staff and accordingly notified Chief Labour Officer of its intended redundancy.

HR policy

Documents filed at the arbitration hearing showed that GCNet had an HR Manual that obliges it to use a certain formula to pay its staff during a redundancy exercise.

In view of the redundancy exercise, management of GCNet and the Staff Association signed a Memorandum of Understanding (MoU) to implement the redundancy in conformity with the HR Manual.

As a result of the MoU, management of GCNet issued termination letters to the affected staff with the redundancy set to take effect on August 31, this year, but payment to be done on or before June 30, this year.

Dispute

According to the ruling, two days before the deadline for the payment of the redundancy package, the management of GCNet wrote to the Staff Association that it could not pay the package and asked for a renegotiation of the redundancy pay as stipulated in the HR Manual.

This led to a dispute which ended up at the NLC, with the two parties agreeing to a voluntary arbitration.

Case of GCNet

It was the case of GCNET that the HR was a collective agreement, but the Staff Association was not a registered labour union and hence per the Labour Act, 2003, it could not entered into a collective agreement with the company.

In view of that, GCNET argued that the MOU it signed with the staff association was null and void and, therefore, not binding.

Also, GCNET contended that it did not have the funds to pay the redundancy package as contained in the HR Manual on the basis that the government of Ghana was yet to pay the compensation for abrogating the contract, while there was no guarantee that the government would even pay the compensation.

Case of the Staff

The staff association, on the other hand, presented a case that the HR policy or manual was the conditions of employment developed by GCNET for its entire staff, which it had been implementing since it commenced operations and, therefore, it was binding on the company.

Also, it argued that per Article 21(1) (e) and Article 24 (3) of the 1992 Constitution, freedom of association was guaranteed and there is no law that states that every association must be registered.

It further contended that the government of Ghana had agreed to pay GCNet compensation for abrogating the contract and, that compensation would include the redundancy package for staff.

Ruling

The arbitration panel agreed with the staff and held that GCNet must pay the redundancy package as contained in the HR Manual because the redundancy package was already predetermined.

It held that the MOU between the Staff Association and GCNet was for the implementation of the redundancy exercise and not a negotiation of the redundancy package because that was already contained in the HR Manual.

“In fact, we find that there has been no negotiation of redundancy pay during this redundancy exercise,” the panel held.

The panel also rejected the claim by GCNet that it had no capacity to pay the redundancy package.

“We find that GCNet is entitled to compensation is entitled to claim compensation from the government of Ghana and such claim will include redundancy payment that will be made to staff,” the panel added.

Writer’s email: emma.hawkson@graphic.com.gh