GCNet ordered to pay redundancy package for 150 workers

The Ghana Community Network Services Limited (GCNeT) has been ordered to pay the redundancy package of about 150 workers in accordance with the company’s policy.

The company is under obligation to pay each of the staff ‘without any adjustment or variation, the National Labour Commission (NLC) directed.

A three-member arbitration panel under the auspices of the NLC issued the order in favour of the staff who are fighting the company’s claim that it has no funds to meet their entitlement.

The panel, which ruled in favour of the staff over a redundancy dispute with GCNeT held that the memorandum of understanding between the two parties [Staff Association and GCNeT] was for the implementation of the redundancy exercise.

According to the panel, the agreement was not a negotiation since it was already contained in the company’s human resource (HR) manual.

“In fact, we find that there has been no negotiation of redundancy pay during this redundancy exercise,” it said.

The panel also rejected the claim by GCNet that it had no capacity to pay the redundancy package.

“We find that GCNet is entitled to compensation from the government of Ghana and such claim will include redundancy payment that will be made to staff.

“The effective date for the redundancy is August 31, this year and this shall be the last day of employment of the affected staff with GCNet,” Graphic Online reported.

The arbitrators appointed by the commission and the two parties were Charles D. Antwi, Anita Wiafe Asinor and Paul Osei Mensah.

Background

GCNet was an information technology firm which used to facilitate trade services at the country’s ports and had a contract with the government until 2023.

In April this year, the government terminated the contract, leading to a shutdown of its operations in May, this year.

The government cancelled the contract to allow the full rollout of a new customs clearing system, Uni-Pass, which according to the Ghana Revenue Authority (GRA), would centralise the processing and handling of all import and export documentation, a system known as a single-window clearing system.

As a result of the termination of the contract, GCNeT decided to lay off some of its staff and accordingly notified the Chief Labour Officer of its intended redundancy.

Management of GCNet wrote to the staff association that it could not pay the package and asked for a renegotiation of the redundancy pay as stipulated in the HR Manual.

This led to a dispute which ended up at the NLC, with the two parties agreeing to a voluntary package.

Case of GCNet

It was the case of GCNeT that the HR was a collective agreement, but the staff association was not a registered labour union and hence per the Labour Act, 2003, it could not enter into a collective agreement with the company.

In view of that GCNeT argued that the MOU it signed with the staff association was null and void and therefore, not binding.

Also, GCNeT contended that it did not have the funds to pay the redundancy package as contained in the HR Manual on the basis that the government of Ghana was yet to pay the compensation for abrogating the contract, while there was no guarantee that the government would even pay the compensation.

Case of the Staff

The staff association, on the other hand, presented a case that the HR policy or manual was the condition of employment developed by GCNET for its entire staff, which it had been implementing since it commenced operations and therefore, it was binding on the company.

Also, it argued that per Article 21(1) (e) and Article 24 (3) of the 1992 Constitution, freedom of association was guaranteed and there is no law that states that every association must be registered.

It further contended that the government of Ghana had agreed to pay GCNet compensation for abrogating the contract and that compensation would include the redundancy package for staff.

HR Policy

Documents filed at the arbitration hearing showed that GCNet had an HR Manual that obliges it to use a certain formula to pay its staff during a redundancy exercise.

In view of the redundancy exercise, management of GCNet and the staff association signed a Memorandum of Understanding (MoU) to implement the redundancy in conformity with the HR Manual.

As a result of the MoU, management of GCNet issued termination letters to the affected staff with the redundancy set to take effect on August 31, this year, but payment to be done on or before June 30, this year.