Ending Employment Relationships Under Ghanaian Law: Basic Terms (1)

In virtually every employment case law, you are likely to find the following words and phrases in use: dismissal, summary dismissal, wrongful dismissal, wrongful termination, and unlawful termination. You will find litigants arguing in one form or the other that they have been dismissed, summarily dismissed, wrongfully dismissed, wrongfully terminated, or unlawfully terminated. 

This often leaves one wondering about the precise meaning of these phrases. This piece sets out the meaning of these words and phrases in the context of employment law.

Termination and dismissal 

For starters, termination and dismissal are two separate concepts under Ghanaian labour law.

Termination refers to a situation where an employee’s employment comes to an end through no fault of his or hers. Thus, loss of employment as a result of a redundancy is a termination. The Court of Appeal in Aryee v State Construction Corporation^[1] noted that when an employer exercises her right to terminate, the employer was not taking a disciplinary action over the employee. All that the employer does is to assert a contractual right to bring the employment relationship to an end.

This is in contrast to a situation where a person’s employment comes to an end as a result of bad or prohibited behaviour. This is referred to as a dismissal. And in dismissing an employee, the employer would be exercising a disciplinary power over the employee. 

Dr. Seth Twum JSC in Kobea v Tema Oil Refinery^[2] struck the distinction between the two terms as follows: 

“… an employer is legally entitled to terminate an employee’s contract of employment whenever he wishes and for whatever reasons, provided only that he gives due notice to the employee or pay him his wages in lieu of notice. He does not have to reveal his reason, much less justify the termination…” 

Of dismissals, the learned judge noted at page 1040: 

“…At common law, an employer may dismiss an employee for many reasons such as misconduct, substantial negligence, dishonesty, etc… these acts may be said to constitute such a breach of duty by the employee as to preclude the further satisfactory continuance of the contract of employment as repudiated by the employee… there is no fixed rule of law defining the degree of misconduct that would justify dismissal.”

The distinction between a dismissal and a termination was again considered in the Court of Appeal decision of Faustina Asantewaa & 7 ors v Registered Trustees of the Catholic Church of Koforidua^[3]. In this case, Dennis Adjei JA following the distinctions in the Kobea case made the following observations: 

“… dismissal is where an employee’s appointment has been truncated based on his behaviour … A dismissal is an embarrassment as the employee loses most of his benefits. Termination on the other hand is not an embarrassment. The employee who is being terminated goes with all the benefits. An employer may terminate the employment of an employee without any reason provided the notice to be given or the salary in lieu of the notice to be given is in accordance with the collective agreement or the contract regulating their relationship. The employee too may terminate his employment with his employer without any reason provided the requisite notice is given or salary in lieu of notice is given…”

Section 30 of the Labour Act, 2003 (Act 651) states in clear terms that an employer who is terminated is entitled to her annual leave, as well as other grants and benefits. Section 30 (2) excludes a dismissed employee from walking away with grants and benefits.

Summary dismissal and dismissal

 “Summary dismissal” and “dismissal”. As the name suggests, both instances involve some wrongful or alleged wrongful act on the part of the employee. The difference has to do with the manner in which the employee checks out. In summary dismissal, the employee is dismissed straight away without the need to comply with any procedure. The idea behind a summary dismissal is that the employee’s conduct is very heinous and injurious to the employer’s business. And as a result, the employer cannot afford to keep the employee on even for a second. In other words, instant action is required on the part of the employer. And for most summary dismissals, the employee would have been caught red-handed by the employer.

Summary dismissal is a common law right that the employer exercises over an employee. This right enables the employer to terminate an employee’s appointment immediately where the employee does something that threatens the existence of the business or harms the reputation of the employer. In Lever Brothers Ghana Limited v Dankwa^[4], the court held that the power to terminate an employment summarily meant that an employer could exercise such right in haste and on the spur of the moment usually because the employee has been caught red-handedly committing the offence.  In Republic v State Hotels Corporation; Ex parte Yeboah^[5], the court held that where an employee was guilty of a misconduct in his capacity as an employee, he might be dismissed summarily and without notice and before the expiration of the fixed term of employment.  In Arkhurst v Ghana Musuem and Monuments Board^[6]the Plaintiff-employee’s conduct was found to be untrustworthy, unpatriotic and against public policy. His summary dismissal was therefore held by the Court to be justified.  In Sarfo v A Lang Limited^[7]  the employee was dismissed for pilfering. The court held that where an employee was guilty of a misconduct in his capacity as an employee, he might be dismissed summarily and without notice and before the expiration of the fixed term of employment.  In Lagudah v Ghana Commercial Bank Limited^[8],the Supreme Court speaking through Badoo JSC stressed that an employer has the right to summarily dismiss an employee whose conduct is incompatible with the due or faithful discharge of his duties. In the unreported High Court decision of Danaa v Natogmah^[9], Kyei-Baffour J outlined the following offences which justified a summary dismissal: fraud, stealing, extortion, corruption, bribery, falsification of accounts/records, fraudulent breach of trust, gross insubordination, dereliction of duty, sleeping at work, verbal or physical abuse, fighting, assault and battery, working under the influence of alcohol or any illicit psychotropic drug, conflict of interest, competition with the employer’s business, conversion of company’s property for private use without the employer’s permission.

 In the case of a dismissal simpliciter, the employee is taken through some form of investigative and disciplinary procedure (provided that is set out in the employment contract) in order to come to a conclusion as to her guilt or otherwise.

A dismissal is similar in many respects to a summary dismissal. The only point of departure is that the power to terminate is not exercised “instantly”, “hastily” or “on the spur of the moment.” The employee will often be taken through an investigative and disciplinary procedure before a final decision is made. 

The legal effect of a summary dismissal and dismissal is the same. In both scenarios, the dismissed employee losses his benefits and goes home with nothing.  It is important to note that any misstep in the carrying out of a dismissal has the potential of becoming a wrongful dismissal which is discussed in a bit more detail below. 

Wrongful dismissal

A wrongful dismissal is a dismissal gone wrong for a variety of reasons. The main reason will be the failure of the employer to follow the procedure laid down in either the employment contract, employees handbook (incorporated into an employment contract) or the collective agreement.

In Morgan & Others v Parkinson Howard Limited^[10], Ollenu J (as he then was) spelt out what an employee alleging wrongful dismissal had to prove. At holding 2 of the decision, the learned judge noted: 

“in a claim for wrongful dismissal, the Plaintiff must prove the terms of his employment and then prove that his dismissal is in breach of the said terms or that it contravenes some statutory provision for the time being regulating employment.” 

Also, Republic v State Transport Corporation; Ex parte Djorhoe^[11], the court noted that the failure to follow the procedure laid down in either an employment contract or collective agreement exposed a person to damages for wrongful dismissal. In this case, the employee, a driver, was dismissed for failing to account for certain goods belonging to his employer. The employer failed to follow some mandatory procedure contained in the collective agreement. The collective agreement required, amongst other things, the setting up of a three-member-committee to investigate the matter and make a report. The Court came to the conclusion that the dismissal was wrongful as the employer failed to set up the three-member committee.

In the Kobea case at page 1040, Justice Seth Twum noted that:

There is also an unbroken line of authority at common law that an employee cannot lawfully be dismissed (as against terminated) without first telling him what is alleged against him and hearing his defence or explanation…

Unlawful dismissal 

In the Court of Appeal case of Faustina Asantewaa & 7 ors v Registered Trustees of the Catholic Church of Koforidua^[16]the court drew the distinction between dismissal and unlawful dismissal in the following words:

“Whereas dismissal is where an employee’s appointment has been truncated based on his behavior, a situation where the employee is dismissed contrary to a breach of the rules of natural justice or the collective agreement or statute will however amount to unlawful dismissal.”

Questions remain as to the real differences between a “wrongful dismissal” and an “unlawful dismissal”. In my view, there is no difference, at least practically, between wrongful dismissal and unlawful dismissal since both terms are concerned with scenarios where an employee is dismissed without regard to either the employment contract, collective agreement or some relevant legislation.

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^[1][1984-86] 1 GLR 425 at page 432

^[2][2003-2004] 2 SCGLR 1033 at page 1039

^[3][2016] 92 GMJ 176 (CA)

^[4][1989-90] 2 GLR 385 [at 388]

^[5][1980] GLR 875

^[6][1971]2 GLR 1

^[7][1978] 1 GLR 142

^[8][2005-2006] SCGLR 388

^[9]Suit No: TMISC/0001/2016 (Judgment delivered on 30 November 2016)

^[10][1961] GLR 68

^[11][1975] 2 GLR 471

^[12][1989-90] 2 GLR 385

^[13][2008] 15 MLRG 201

^[14][1972] 1 GLR 413

^[15][1989-90] 1 GLR 133

^[16][2016] 92 GMJ 176 (CA)