GCNET challenges arbitration award on redundancy pay in court

The management of Ghana Community Network Service Limited (GCNet) has filed a motion at the Accra High Labour Court, challenging the enforcement of an arbitration award over the terms of a redundancy compensation payment to its workers.

The company is seeking the intervention of the High Court to set aside the award, which directed the management to pay a redundancy package of 30 per cent of salary and other allowances including; rent, transport, fuel, car maintenance, and education grant subsidies.

A three-member arbitration panel appointed by the National Labour Commission (NLC), last month ruled that all the workers affected by company’s ongoing redundancy exercise, be paid in accordance with provisions made in the firm’s Human Resource Policy Manual, signed between the GCNet management and the GCNet Staff Welfare Association in 2018.

A statement signed by Alwin Hoegerle, General Manager, on behalf of Management and copied to the Ghana News Agency on Tuesday said, instead the management wanted the award set aside because the HR policy Manual was developed for administrative convenience and did not constitute a Collective Agreement between the management and GCNeT Staff Welfare Association, in addition to the fact that workers were not unionised and the association was unregistered.

The affidavit, filed at the Labour Division of the High Court on Monday 5, also affirmed that the association "lacked capacity going into the arbitration and that incapacity and illegality renders the resultant award null and void and should be set aside by the court pursuant to section 58 of the ADR Act 2010 (Act 798)."

In addition, the affidavit, filed by the Charles Bawaduah, counsel for management, asserted that although the critical issue of the incapacity of the association to legitimately present the workers, was raised by the management side at the arbitration session, it was ignored by the panel.

The statement said In view of the fact that the staff association illegitimately engaged in the formulation of the HR policy manual, that was erroneously considered as conditions of service agreement, the management considered that the HR "agreement and the arbitration award are null and void and of no effect since they were the products of a non-existing legal person and hence illegal."

“Since the Association is neither registered as a trade union nor as a body corporate, it had no legal personally and hence no capacity to negotiate the conditions of service agreement for and on behalf of the staff and to represent the staff or partake in the arbitration proceedings,” it avers.

“Management is of the position that although the affected workers deserve a severance package, their redundancy payments must be done in a legitimate manner in accordance with the provisions of the Labour Act.

“The management wants the intervention of the court because it believes that its submission to the effect that the workers are not unionized, and that the GCNet Staff Welfare Association is not a registered workers group and does not have a bargaining certificate to entitle it to enter into negotiations on redundancy terms, was glossed over by the arbitration panel.

"The arbitration panel ignored the objection raised by the Applicant (management) as regards the capacity of the Association to represent the workers, and proceeded to enter an award in favour of the Association," the management stated in their affidavit.

The statement said “GCNet had a contract with the government of Ghana for trade facilitation services at the ports. The contract was due to end in 2023, but in early April 2020, the government notified GCNet of termination of the contract, upon which it asked the firm to demobilize by April 28, 2020.

“In furtherance to the termination notice, GCNet declared redundancy, and in accordance with the Labour Act 651 (Act 2003), notified the Chief Labour Officer on plans for the redundancy exercise.

“The company expressed readiness to pay redundancy compensation, and therefore requested a negotiation of the terms for the severance package, but the workers, who continue to engage in a series of industrial actions, refused to engage, insisting that the provisions in their HR Policy Manual be used to calculate the benefits.”

The statement said the management maintained that the terms in the manual could not be used for the redundancy exercise, and the document was therefore not legally produced and did not properly relate to negotiated redundancy compensation in accordance with the labour law.