Employment relationships do not always end through retirement. In many instances, the termination of the employment relationship is at the instance of one of the parties. Mostly when it is the employee who initiates the termination, there are no post-termination issues. However, employers often face challenges when they are the ones to terminate their employment, especially when the termination was without cause or reason.
National Labour Commission ("NLC") v Barclays Bank (NATIONAL LABOUR COMMISSION vs. BARCLAYS BANK GHANA LTD. [2023]DLSC16995 (dennislawgh.com)) is a recent decision of the Supreme Court of Ghana that addresses the issue of termination without cause and the position of the law within Ghana. In NLC v Barclays Bank, an employee of Barclays Bank petitioned the NLC. The employee's claim was that while negotiations were still ongoing for mutual separation, Barclays Bank decided to terminate her employment with immediate effect and provided no reason for their decision. The NLC, after hearing the parties, decided that Barclays Bank was wrong in law for terminating the employment without reason. The NLC applied to the High Court to enforce its decision. The High Court dismissed the application and the NLC appealed to the Court of Appeal and then to the Supreme Court. The Supreme Court had to determine whether an employer can terminate at will and without reason under the Labour Act, 2003 (Act 651) (the "Labour Act").
The Supreme Court held that Barclays Bank was not wrong for terminating the employment without providing any reason. The court established that the Labour Act did not do away with the common law right of the employer or employee in terminating the employment contract. This means that under Ghanaian law both the employer and employee can end the employment relationship without providing any reason at all. The court explained that in the same way an employee cannot be forced to continue work that he is unwilling to do, an employer cannot be forced to retain an employee when he is not inclined to do so.
The court also held that the Labour Act recognises that, an employee's contract can be terminated in the manner provided in the employment contract, collective bargaining agreement or the Labour Act. Where the employment contract or collective bargaining agreement does not require the employer to give the reason for terminating the employment contract, the employer may terminate the contract without giving any reason. In the absence of provisions on termination in the employment contract or collective bargaining agreement, an employer can terminate without reason once the requisite notice or pay in lieu of notice is given to the employee in accordance with the Labour Act.
The decision in NLC v Barclays Bank is significant because it clarifies the misconception that an employer must always provide a reason to terminate the employment contract, especially in at-will situations. It is also important to note that the decision of the court emphasises that in determining whether an employer has wrongfully terminated an employee, the court would first look at the employment contract or collective bargaining agreement. Where the contract or collective bargaining agreement expressly requires an employee to give the reason for termination, the employer would be required to do so.
Reviewed by Joseph Konadu, an Executive in ENS Ghana
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