BEFORE THE ARBITRATION PANEL

IN THE MATTER OF

HORIZON FINANCE & LEASING CO. LTD

VERSUS

THE REDUNDANT WORKERS OF HORIZON FINANCE & LEASING CO. LTD

DATED: OCTOBER 5, 2009

BEFORE THE ARBITRATION PANEL

IN THE MATTER OF HORIZON FINANCE & LEASING CO. LTD.

VERSUS

THE REDUNDANT WORKERS OF HORIZON FINANCE & LEASING CO. LTD

IN APPEARANCE

Ann Obeng-Ababio and Sebastian Asem, on behalf of Horizon Finance & Leasing Co. Ltd.

Abigail Nkansah, Mark Adu Quansah, Lilian Oduro and Samuel Darkwa and Kofi Davor who represented the workers

THE ISSUES:

·         Severance package

·         Waiver on loan

INTRODUCTION

Horizon Finance & Leasing Co. Ltd. (hereinafter referred to as the Employer) and the nine (9) redundant workers (hereinafter referred to as the “Workers”) do not have a legal relationship regulated by Collective Agreement (CA). The Company as a result of a take-over by Access Bank declared nine (9) of its workers redundant. However, four (4) of the redundant workers who were outsourced from a third party (Montran) negotiated with the Employer on issues of accumulated leave, medical allowance, expatriation allowance, loan waiver and severance pay. At the Mediation held on September 23, 2009 at CENCOR, chaired by Austin A. Gamey and his co-mediator Henry Atta Paidoo, a consensus agreement was reached on the following:

1. Accumulated leave to be encashed and paid to all the nine (9) worker;

2. On medical allowance it was agreed that those workers who did not signed onto the Montran platform, be paid a (GH¢300); and

3. On repatriation, it was agreed that the Employer should check the going rate for government transport in the conveyance of personal properties within and without Tema/Accra. The confirmed amounts are; Tema/Accra GH¢150 and anywhere outside Tema/Accra, GH¢300.

Loan Waiver

The issue of the loan waiver was not discussed because workers were of the view that the outcome on the severance pay will inform their decision whether to negotiate on the loan or not. However, as a result of a deadlock between workers and the Employer on the proposal of two (2) and four (4) months respectively of each completed year of service as severance pay, both parties agreed on a voluntarily Arbitration under Section 157 of the Labour Act 2003 (Act 651).

Med-Arb.

Parties to the dispute agreed to convert the Mediation into Arbitration with the Mediators as the Arbitrators to operate under the rules of the National Labour Commission as contained in L.I 1822. The offices of Gamey & Gamey Academy of Mediation (GGAM) were agreed as the venue for the hearings. The Arbitration hearings took place on October 1, 2009. Patrick Asiamah was agreed upon by both parties as the secretary for the Arbitration.

The panel was made up of Austin A. Gamey and Henry Atta Paidoo.

OPENING PRESENTATIONS BY THE DISPUTING PARTIES

The Employer’s submission is summarized as follows:

(a) The Employer explained that it stands by its previous proposal of two (2) months of each completed year of service salary as severance pay to workers as a result of the fact that Horizon Finance & Leasing Co. Ltd. remains indebted to most of its customers as per submitted financial statement (Exhibit A). It owes Ecobank Ltd. to the tune of $650,000 not to mention other organizations like SSNIT, and other Banks.

(b) On the issue of waiver on loan, the Employer informed that the panel was a personal car loan hence it is not a matter of contention. And as a general rule once relationship between a worker and an employer comes to an end, the terms of the loan changes and the organization uses any lump sum of money for the worker to defray the loan and make further arrangements for settlement if necessary.

Workers’ submission in response was as follows:

(a) Workers informed the panel that the loan was acquired by some members for reasons other than the purchase of personal cars, for instance as a personal loan.

(b) Workers were in disagreement with its Employer on the financial status of Horizon Finance & Leasing Co. Ltd and explained that in 2007 when Access Bank Ltd was taking over, Horizon Finance & Leasing Co. Ltd was in a good standing financially as evident in the financial statement (Exhibit A) above. The Employer was four (4) times a member of Club 100, speaking volumes of its financial and social status (Exhibit B). Offering the highest bid to take-over Horizon Finance & Leasing Co. Ltd. and priding itself of having the highest capital in the banking is a sure sign that the Employer should be able to pay the four (4) months’ salary for each completed year of service as severance pay and be able to waive 75% of the redundant workers’ loans because of the unexpected loss of their jobs after they were trained for absorption into the new Bank.

(c) In 2008, the Employer made losses because according to the Workers, there was a directive by the directors (Access Bank) to halt all transactions as a result of the take-over transition (see Exhibit B). And since Access Bank inherited the assets and liabilities of Horizon Finance & Leasing Co. Ltd. it should have factored that into the negotiation during the take-over.

The Arbitrators, asked to know from the Employer the date for the compilation of its Human Resource Policies Handbook which the Employer gave as March, 2005.

Referring to Section 65 of Labour Act, the arbitrators wanted to ascertain whether the Handbook is consistent with the provisions in the Labour Act 651.

At this juncture, the Employer appreciated the fact that its Handbook is not in conformity with the procedures enumerated in the Labour Act 651

Clarification by Workers

The Workers responded that they stand by their previous proposal of four (4) months’ salary of each completed year of service as severance pay for the following reasons.

(a) To put them in better position because they were made to believe that the take-over organization will absorb them and they were trained for eight (8) weeks for the purpose, and therefore did not take advantage of other opportunities that came their way.

(b) To be able to pay for their loans

The Employer’s clarification on Waiver of loan

 The Employer said it considered the plea of the Workers and was willing to waive off 20% of the loan instead of the proposed 75%.

In the absence of further questions or comments from either parties, the arbitrators gave Monday, October 5, 2009 as the date to give its Opinion and the Award.

OPINION

From the facts before us, especially the financial indicators (Exhibit A) and the voluntary admittance of the Employer that their operational Handbook was not consistent with the Labour Act 2003 (Act 651) Section 63(4) (b) and Section 65 is recognition of flaws in the process.

We agreed that the Employer was in compliance of Section 8 of the Labour Act 2003 (Act 651) which is consistent with its functions.

However, we recognized that the Employer failed to comply fully with Section 65 of (Act 651) and heavily relied on its Handbook page 33 dated 2005 (Exhibit C), quote “Redundancy: In the event of an Employee’s position becoming redundant, the Company will give four (4) weeks notice of termination or pay in lieu thereof. Redundancy shall attract the requisite entitlement.

If the employment of the Employee is terminated as a result of the amalgamation, division or other reconstruction of General Leasing & Finance Company Limited(GLFC), or as a result of the sale or other disposal of any significant business or businesses carried out by GLFC, and there is an offer of employment made within the new organisation on terms and conditions similar or equivalent to his existing employment, then the position of the Employee shall not be regarded as having been made redundant and no redundancy compensation shall be payable. If as a result of restructuring an Employee is redeployed to another position within the Company on substantially the same terms and conditions, the Employee shall not be regarded as having been made redundant. No redundancy compensation will be payable”.

The above quote is clearly in violation of Section 65 and 63 (4) (b) of (Act 651) and therefore cannot support the action(s) of the Employer.

We hold the opinion that Horizon Finance & Leasing Co. Ltd. was not entirely a “hopeless” case at the time of take-over as presented by the Employer especially as it was used as party equity leading to the establishment of Access Bank as endorsed by Bank of Ghana.

It is normal that if Horizon Finance & Leasing Co. Ltd was in financial crisis, it lies with the Employer to keep open the channels of communication with the Workers as per Section 9 (g) of Act 651 so that both sides take steps to mitigate sufferings and to rescue the organization

The nine workers argument of being made to suffer may be a moral issue but not supported by Section 8 which permits the Employer to manage its organization even in mergers and takeovers as in this case.

However, we hold the view that it was improper for the Employer to turn blind eye to Section 65 of (Act 651), which mandates it to inform the Chief Labour Officer and subsequently engage the workers concern not only to mitigate the effect of severing legal working relationships but to also negotiate redundancy pay and terms of payment and not to rely on its Handbook as quoted above.

AWARD

We have considered all the facts and evidence before us and make the following award which should be implemented.

We award that 50% of the loan be waived and that the common practice of three (3) months pay for each completed year of service for a redundant staff be applied.

We so direct.

Dated                                                                            Austin A. Gamey

October 5, 2009                                                           Arbitrator                                

Tema, Ghana.

                                                                                      Henry Atta Paidoo

                                                                                      Arbitrator