Court Dismisses SGS/GCNet application against Arbitration Award
Accra: February 19, 2021: An Accra High Court has dismissed a motion on notice application by SGS / GCNet to set aside an Arbitration Award of the National Labour Commission issued against the company on September 4, 2020, involving payment of severance packages to redundant staff.
The management of SGS/GCNet also sought to have the Court declare null and void and of no effect the Company’s Human Resource Policy Manual.
The basis of the application by SGS/GCNet was to challenge the capacity of Messrs. Felix Agbodeka and Jonathan Djieagu - Chair and Vice-Chair of the GCNet Staff Welfare Association as leaders of the Association to represent Staff.
It was also to challenge the capacity of the Staff Welfare Association as the body recognised to represent the Staff of GCNet.
SGS/ GCNet’s case was that when it raised the issue of the capacity of the leadership of the Welfare Association, the objection was ignored and the Arbitration Panel proceeded to enter the Award, hence its decision to petition the Court for redress.
The ruling on the application, delivered on February 1, 2021 by his Lordship, Justice Frank Aboadwe Rockson, noted that the case by SGS/GCNet that the Staff Welfare Association was not a registered Trade Union entity and therefore did not have capacity to represent Staff and negotiate the welfare of Staff was inconsistent with Article 21 (1) (2) and Article 1(2) of the Constitution.
In the 10 page ruling, the Court reminded SGS/ GCNet that the issue was addressed in the Arbitration Report by the Arbitration Panel and refereed to Page 7, a part which reads ‘suffice to say however that if a worker can negotiate with the employer or a representative of the employer, we do not see why a representative of the witness (worker) cannot negotiate with the representative of the employer’.
The Court further noted that if SGS / GCNet felt dissatisfied at that time of the Arbitration process, SGS/GCNet had every opportunity to have sought refuge under Section 40 of the ADR Act, Act 798 of 2010’.
Citing portions of Section 40(1-3) of the Act 798, the High Court Judge ruled that ‘SGS / GCNet failed to use the opportunity afforded in that Section’ which meant that ‘it waived its right to raise the objection and therefore caught by Section 27 (d) of the Act 798 which states that ‘ a party who takes part or continues to take part in an arbitral proceedings knowing there is an irregularity in respect of an Arbitrator or proceedings and who fails promptly or within the specific time of the arbitration agreement or under this Act to object to the proceedings shall be deemed to have waived the right to raise the objection’.
‘Indeed this Court is of the opinion that the Applicant waived its right and it is too late in the day to raise the issue of capacity when the applicant has stated clearly in Exhibit ‘A’ that it recognizes the Association as representing the Staff of GCNet, something that has been in operation for well over 15 years’ Justice Rockson ruled.
According to his Lordship, Justice Rockson, it is SGS/ GCNet together with the Staff Welfare Association that presented the request for Arbitration and the same SGS/GCNet confirmed that its Management applied the existing HR Policy Manual with respect to 2 staff in December 2019 in a redundancy matter in its supporting exhibits. Again, SGS / GCNet is caught by Section 26 of the Evidence Act, NCRD 323 of 1975.
In the considered opinion of the Court therefore SGS / GCNet by its conduct and statement in relation to dealings with the leadership of the Staff Welfare Association and the Association itself are estropped from denying that the Staff Welfare Association lacks capacity.
According to Justice Rockson, the Court was minded by decisions in similar cases which it referred to and therefore under the circumstance finds NO merit in the application and DISMISSES same.
Meanwhile, the National Labour Commission (NLC) has proceeded to the Courts to secure an Order of Enforcement judgement against GCNet to compel them to pay redundant workers their severance package following its refusal to comply with the Arbitration Award and the High Court ruling on the matter.
On June 30, 2020, Executive Management refused to respect the terms of disengagement which culminated in a series of discussions between Welfare Association representing staff and Executive Management representing SGS/ GCNet.
Following a deadlock in discussions, the matter was jointly referred to the National Labour Commission (NLC) on August 11, 2020 by parties involved which ended in Arbitration for resolution. An Arbitration Panel was jointly selected by the parties and the NLC. The parties selected one arbitrator each from the list of arbitrators and the NLC selected a Chairman to constitute the three-member panel.
On September 4, 2020, the NLC appointed Arbitration Panel ruled in favour of affected staff upholding HRPM Article 1901(f) of the GCNet HR Policy Manual to be respected without any variation or adjustment and also ordered that the effective date of redundancy was August 31, 2020 which should be regarded as the last day of employment for each employee, with clear instruction to pay August salaries to affected staff.
Days after the September 4, 2020 Arbitration Award, GCNet Executive Management / SGS acting in bad faith refused to respect the Award of the Arbitration Panel and approached the National Labour Commission (NLC) to review the Arbitration Award.
The NLC in a letter dated September 25, 2020 dismissed the request for review citing Section 158 (1) of the Labour Act 2003 (Act 651) which provides that ‘the decision of the Arbitrator or majority of the Arbitrators shall constitute the Award and shall be binding on all parties.’