Protecting employee rights: Understanding constructive dismissal under Ghanaian labour laws

This article delves into the complex area of constructive dismissal as it pertains to the safeguarding of employee rights within the legal framework in Ghana. In the corridors of labour relations, constructive dismissal stands as a critical issue, often challenging the delicate balance between employer prerogative and employee protection.

Through a comprehensive analysis of Ghana's labor laws and judicial precedents,
this article elucidates the nuances surrounding constructive dismissal, shedding
light on its definition, elements, and implications.  The article includes various facets, including circumstances that may constitute constructive dismissal, the attitude of the courts, and the remedies available to aggrieved parties. 

Drawing upon statutory provisions and judicial precedents, the article aims to
broaden understanding of constructive dismissal by providing valuable insight for employers, policymakers, stakeholders, legal practitioners, and students.
Ultimately, this article aims to contribute to the promotion of fairness, equity, and respect for the rights of employers in Ghana.

Dismissal occurs when an employer gets an employee out of his employment
and the employee loses all his legitimate benefits with the exception of his
contributions. Different types of dismissals may arise in Ghana.

The first type is Summary dismissal, which is a right that enables the employer to sever or cut short an employee’s appointment immediately when the employee does something that threatens the existence of the business or harms the reputation of the employer. The second type is wrongful termination, which is the unfair termination of a worker’s employment for reasons related to union membership, discrimination, disability, or refusal to participate in a strike. The third type is constructive dismissal.

What is constructive dismissal:

In N.M. Selwyn’s Law of Employment, 14th edition, Oxford University Press
(2006) P401: constructive dismissal is defined as follows: “where the employee
He terminates the contract, with or without notice, in circumstances where he is entitled to terminate it without notice by reason of the employer's conduct; this is known as “constructive dismissal,” for although the employee resigns, it is the employer’s conduct that constitutes a repudiation of the contract, and the employee accepts that repudiation by resigning.”.

Examples of ways that may constitute constructive dismissal are:

Employer demoting an employee or reducing the employee’s remuneration

The employer refuses, by words or conduct, to allow the employee to fulfil the
conditions of employment, such as locking an employee out of a building or
removing support staff

The employer harassing or abusing an employee

The employer gives the employee the choice of accepting a fundamental change
or being fired.

In Ghana, the Labour Act 5 does not expressly mention Constructive Dismissal.
However, it can be gleaned from Section 63(3) that Constructive dismissal is
recognized under the Act. Section 63(3) states as follows: “A worker’s employment is deemed to be unfairly terminated if, with or without notice to the employer, the worker terminates the contract of employment.

Because of the ill-treatment of the worker by the employer, having regard
to the circumstances of the case.

This provision gives an employee with the right to bring an action against his
employer after the termination of his employment under the constituent as stated
supra.

Establishing constructive dismissal and the attitude of the Ghanaian courts:

In Ghana, constructive dismissal may either be established or prove a
breach of a fundamental term of a contract or the implied term of mutual trust and confidence. Hence, in order for a party or employee to succeed in action for
Constructive Dismissal, he must to prove that he has suffered constructive
dismissal as a result of the breach by the employer or any repudiation of the
terms of contract by the employer. He must be able to show that the employer
breached a fundamental element or term of the contract making the workplace
practically intolerable for the employee.

The burden of proof and standard of proof is the civil one and lies on the
employee to discharge. Thus, from the totality of all of the evidence, the court
should be able to reach the conclusion on the balance of probability that the
employee has suffered constructive dismissal.

The attitude of the Ghanaian courts in determining constructive dismissal is
guided by the principles of justice and not sympathy. The Ghanaian courts are
very subjective and meticulous when dealing with such claims relating to
constructive dismissal and such each case is determined based on its
circumstances and fact. One similar underlying factor that drives the decision of the Ghanaian court is Whether there has been a breach of an essential term
of the employment contract by the employer.

The purposive approach has been adopted by the Ghanaian court when examining the terms of the contract of employment in reaching the conclusion that an essential term of the contract of employment has been breached or an employee has suffered constructive dismissal.

In the case of Yaw Asare Darko versus Ghana Port and Harbour:

AUTHORITY; the facts of this case are; The plaintiff is a a lawyer by profession
and was employed by the defendant on probabation as legal officer on 1st
February 1993 and attained the rant of a senior legal officer in the legal
department of the Defendant company. On September 28, 2001, the plaintiff
decided to resign from his employment but the defendant did not accept his
resignation. They contended that he had a case to answer on his role in the arrest of vessels ‘MV ZIRIA’ and ‘FLORIA 1” and was subsequently interdicted. As a result, a committee was set up by the management of the
defendant company to go into the matter, and at the end, the plaintiff’s interdiction was lifted.  Subsequently, the defendants accepted the earlier resignation of the plaintiff. He protested against the late acceptance of his resignation, which was rescinded.

On September 24, 2002, he was posted to the Takoradi Port as Acting
personnel and Administration manager. The plaintiff brought an action
against the defendant that the following acts constituted a fundamental breach of the terms of his employment contract with the defendant. He further claimed that he had no desire to relinquish his employment but was compelled to do so by the intolerable and unbearable conduct of the defendant, and therefore, he resigned from his employment on January 31, 2023, on the basis that the defendant had constructively dismissed him. The defendant, inter alia, denied any malice in interdicting and suspending the plaintiff from leave and further submitted that the re-assignment was not an act of bad faith but was a promotion.

After a full trial, the learned trial judge entered judgment for the plaintiff against the defendant. The defendant was aggrieved by the judgment and appealed to the Court of Appeal on grounds, inter alia, that the trial judge erred in ruling that the plaintiff was constructively dismissed by the management of the defendant.

The plaintiff's employment was governed by the 1997 Collective Agreement
which set out the conditions of service for Senior Officer of Ghana Ports and
Harbour Authority Exhibit "C." Article 10 of the said provision reads:
10. The duties of the officer shall include the normal duties of the officer to which he had been appointed" and any other duties" that the Authority may
call upon him to perform:

The Court of appeal read the provision as a whole and gave it a wider meaning.
In other words, the word ‘and any other duties’ in the provision must not be read as ‘ejusdem generis’ with the preceding clause. The court, in determining the bone of contention, held as follows: “The whole sentence of Section 10 of the Collective Agreement Exhibit "C" to my mind means that an officer who has been appointed, for example, to a legal position can be re-assigned to another department in the company to which his expertise and experience shall be reasonably related and required.

Further, this "other duties" must not be derogation or diminution of
his earlier position. In other words, the word "any other duties" should not
necessarily be of the same designation or description as the first part of the
sentence or the initial appointment. "Any other duties" must mean any other
permissible or related work It is pertinent to note that the learned trial judge's interpretation of the section would mean that a legal officer with the requisite competence and experience can never rise to the position of general manager, deputy managing director, or managing director of the company. This, with due deference, would be untenable.

In any case, if it can be said that the plaintiff's new appointment is substantially unrelated to his initial appointment as a legal officer, then it can be inferred that his appointment has been changed to his detriment. If not, then no wrong had been done to him, and there would be no breach of his contract." Further, it was held that the plaintiff’s new assignment is not a substantial variation or diminution of the core work for which he was appointed, and therefore, considering the circumstances, the plaintiff was not compelled by the defendant to resign.

It is clear from the Court of Appeal decision in the case of YAW ASARE DARKO
v. GHANA PORTS HABOUR AUTHORITY:, supra that assigning an employee to tasks related to their expertise doesn't necessarily constitute constructive dismissal unless it substantially deviates from the core responsibilities of the initial appointment. The plaintiff in the above case would have been entitled to his claim if he was able to prove that there has been a substantial or radical change or deviation from his term of employment; otherwise, his case will fail.  Any new assignment or re-assignment relating to the expertise of an employee would not be construed as a breach of contract, and thus, no constructive dismissal arises [emphasis mine].

Also, in the case of TETTEH V INTERTEK:, The brief facts of the case are that the Plaintiff was initially engaged by a company known as Transworld
Laboratories, which was subsequently taken over by Intertek Minerals Limited,
the Defendant. The Defendant then engaged the services of the Plaintiff by
employment contract, which was to take effect on October 1, 2008. The
employment was regulated by a letter of appointment and the contract of
appointment.

The Plaintiff had, throughout his employment with the defendant, worked in
Tarkwa, where the defendant's head office is located, until he was transferred to Tema, the plaintiff, is aggrieved by the nature and conditions of his transfer. In a letter dated April 14, 2016, he demanded severance and for his entitlement to be paid to him. The defendant treated the plaintiff's letter as a letter of resignation and, therefore, paid the plaintiff the benefits due him. However, the plaintiff's case has been that he had not terminated his employment by virtue of this letter. The case before the trial court and, indeed, this Court, therefore, centres on the effect of the plaintiff's letter. Did the letter merely amount to a request for severance and the entitlements under the contract, or did it amount to a resignation?

The High Court, at the application for directions stage, set down eight main
issues for trial. After resolving all the issues, the trial court, by its judgement delivered on July 19, 2019, dismissed the plaintiff's claim, including the claim for constructive dismissal. The Plaintiff, being dissatisfied with the judgment of the trial High Court, filed an appeal to this Court on August 15, 2019.

On appeal, the court examined the evidence on record to ascertain whether or
not evidence has been adduced to support the claim that the Appellant was
constructively discharged or dismissed. The Court of Appeal meticulously
skimmed through the evidence of the Plaintiff to ascertain whether the Defendant
made life so intolerable for Plaintiff to compel him to resign. In the plaintiff’s witness statement, which by operation of law became his evidence-in-chief, he testified that he was transferred to Tema after an earlier attempt to terminate his employment had failed. He further testified that the transfer from Tarkwa to Tema was sudden and without accommodation and had serious impact on his family, as his family had been in Tarkwa for years. His wife was a nurse with the Ghana Health Service at Tarkwa, and their daughter was in her third year of junior high school. He, therefore, had to shuttle between Tema and Tarkwa. He further testified that even at Tema, he did not have a functioning office to work in.

He, therefore, worked from his pickup. He also went to work, even on Sundays.
Based on the evidence above, the Plaintiff thought it was better for him to quit
and take his benefits. The court made reference to the employment agreement and the appointment letter and held that it did not prohibit the defendant from transferring the plaintiff to its office in another part of the country. clause of the employment agreement even envisages situations where the Plaintiff may be required to travel outside the country on the Defendant’s business and makes provision for it.

Clause 12.0 of the employment agreement also makes provision for repatriation of the plaintiff to his country of origin, where the plaintiff is required to work outside Ghana. We are, therefore, of the view that the transfer from Tarkwa to Tema alone will not constitute constructive dismissal by the employer. The burden to prove whether there was a constructive dismissal was on the plaintiff to discharge. We are not satisfied, on the totality of the evidence on record, that the defendant made life so intolerable for the plaintiff that it compelled him to resign.

The Court of Appeal, in dismissing the claim, further held that Plaintiff has failed to prove, on a preponderance of probabilities, that his letter to the defendant was written as a result of the pressure he received from the defendant.

A classic case of a constructive termination of employment is JONATHAN AGO
ADJEI, ISSAKA ALIYU ABU AND MICHAEL CHARWAY:. The brief facts are:
that the 1st and 3rd Appellants were assigned by the National Service Secretariat to do their mandatory National Service with the Ghana Inter Bank Payment and
Settlement Systems (GHIPSS) of the Bank of Ghana from November 2008 while
the second Appellant was assigned directly to the Respondent to do his National
Service at the same period. The 1st and 3rd appellants were reposted to the
Respondent on completion of the National Service assignment. The three
appellants subsequently worked for the Respondent upon completing their
National Service from September 2009 to May 2014 (a period of about 5 years).
It is the case of the Appellants that for the period of September 2009 to May
In 2014, the Respondent engaged them as temporary employees. In May 2014, the
Appellants received letters from a firm called The Capital Group Limited (TCGL)
an employment agency engaged by the Respondent. The import of the letters
was that they had been offered a contract appointment for a six-month period, i.e.
2nd May, 2014–2nd November, 2014 by the TCGL and assigned to the respondent.

The letter sought to change their status as temporary employees of the
Respondent and make them temporary employees of Capital Group Limited
(TCGL). Aggrieved by the letter, all 3 appellants tendered their resignation from the Respondent Bank effective June 2, 2014. They then commenced an action
in the High Court against the Respondent on May 20, 2014, claiming, inter alia
for a declaration that the allocation of Plaintiffs to Capital Group for deployment to the Defendant without their prior consent amounts to the unfair termination of the employment of the Plaintiffs. The plaintiffs claims were dismissed, and they further appealed to the Court of Appeal.

The Court of Appeal carefully examined the circumstances surrounding the
writing of the letters and their contents to be able to arrive at the conclusion that the appellants tendered in their resignation due to the TCGL emergence on the scene and the offer letters to them. All three (3) letters of the Appellants mentioned TCGL and portions are as follows: JONATHAN ADJEI AGO, the 1st Appellant, stated in his letter as follows: “I would like to put it on record that I did not apply for a job at the TCGL.”.

Aliyu-Abu, the 2nd appellant, in referring to the many unsatisfying factors at
GCB (The Respondent Bank) clearly cited the TCGL letter as the last straw that
broke the camel’s back. He stated as follows: “the most recent amongst them
is the decision of Management to move all contract staff to a recruitment
agency TCGL”. Michael Okpoti Charway, the 3rd Appellant, stated in his letter, “I would, however, like to place on record that I never applied for any job with TCGL.”

The Court of Appeal opined that the Appellants were compelled to resign by the
TCGL factor after enduring an inordinately long period of employment as
temporary workers with the Respondent. It was further held having considered
the circumstance, it is s clear case of Constructive Dismissal and therefore the
appellant succeeds on this ground. Again, DR. KWAME OWUSU V FAIRFAX OIL SERVICES LTD AND ANOTHER 12 , facts giving rise to this action are that the Plaintiff was an employee of Tullow Group Services Ltd as a geophysicist. The 1st defendant employed the plaintiff and a contract of employment was executed by plaintiff and the 1st defendant after series of negotiations. After his employment, the plaintiff worked for both 1st defendant and 2nd defendant in specific roles as assigned to him.

Issues relating to the enforcement of clause 4.3 of the contract of employment
executed between the plaintiff and the 1st defendant could not be resolved by the parties. The relationship between the parties became sour as a result of the
issues surrounding the enforcement of clause 4.3 of the contract of employment.
This led to the severing of the relationship between the parties with the plaintiff claiming that his contract of employment had been terminated by the defendants and the defendants also alluding to the fact that the plaintiff terminated the contract of employment by his conduct.

The trial court, in holding that the plaintiff was constructively dismissed, held in the case as follows:

"I have examined the evidence adduced by the parties on this issue and I must
say that I am convinced the plaintiff has succeeded in discharging the onus
placed on him by law to provide sufficient and credible evidence on the issue. The 1st defendant’s attempt not to pay the plaintiff for a period of four months
constitutes a fundamental change in clause 4 of the Contract of Employment.
Furthermore, the ‘‘Mutual Abrogation of Contract," which the first defendant gave to the plaintiff to review and sign, in my view, constitutes an act by the employer giving the employee the choice of accepting the fundamental change or being fired under the guise of "mutuality.”

By taking such action, the 1st defendant essentially ceased to meet its obligations, therefore terminating the employment contract. The plaintiff or any other employee so affected can therefore treat the contract as fundamentally breached and consider himself dismissed through the employer’s actions. I hold therefore that the 1st defendant constructively terminated the employment of the plaintiff with its own actions."

REMEDY AVAILABLE FOR AN EMPLOYEE WHO HAS BEEN
CONSTRUCTIVELY DISMISSED
Section 17(1) of the Labour Act 13 provides that;
“a contract of employment may be terminated at any time by either party

giving to the other party.

a. In the case of a contract of three years or more one month’s notice or

one month’s pay in Lieu of notice”.

However, an employee who successfully establishes constructive dismissal
against his employer is entitled to damages or compensation for wrongful
termination. Damages are generally measured by looking at how much the
employee who has been dismissed wrongly or unlawfully has lost as a result of
the dismissal. The purpose is to put the dismissed person in much the same
position as he would have been in financially if the wrong had not been
committed 14 . The quantum of damages or compensation is determined by court
on the circumstance and fact of the case.

In the case of Kobi v. Ghana Manganese Co. Ltd 15 , the court held in holding 2 as follows “in assessing damages for wrongful dismissal the court must have regard to all the circumstances of the case considered as fair and reasonable.’’
The court in awarding damages to the plaintiffs for constructive dismissal in the case JONATHAN AGO ADJEI, ISSAKA ALIYU ABU AND MICHAEL CHARWAY supra, relied on the case of Hemans v. GNTC 16  where an employee’s contract was wrongfully terminated the Court of Appeal awarded him four (4) months salary in damages though the notice period under the contract was only one month. On the basis of this authority, the Court of Appeal awarded compensation of eight (8) months salary to each Appellant as damages for wrongful termination of employment.

Conclusion:

In conclusion, the concept of constructive dismissal in Ghana represents a
crucial facet in safeguarding employee rights within the workplace. Espoused as
situations where an employee is compelled to resign due to intolerable conditions created by the employer, constructive dismissal poses complex challenges within the legal framework.

The Ghanaian courts, guided by principles of justice, meticulously examine each
case of alleged constructive dismissal, focusing on whether there has been a
breach of essential terms of the employment contract. The burden of proof lies
with the employee, who must demonstrate that the workplace conditions were
made practically intolerable by the employer's actions or omissions.

Through judicial precedents such as the YAW ASARE DARKO V GHANA
PORTS & HARBOUR AUTHORITY case, the court have emphasized that reassignment or changes in duties do not necessarily constitute constructive dismissal unless they substantially deviate from the core responsibilities of the initial appointment. Similarly, in cases like TETTEH V INTERTEK the, court
scrutinize the circumstances surrounding an employee's resignation to determine
if it was truly voluntary or compelled by the employer's actions.

When an employee successfully proves constructive dismissal, remedies include
damages or compensation for wrongful termination. Courts determine the
quantum of damages based on the financial losses incurred by the employee due
to the dismissal, aiming to restore them to a position similar to what they would have been in had the wrongful dismissal not occurred.

Ultimately, the recognition of constructive dismissal under Ghanaian labour laws
underscores the importance of upholding fairness, equity, and respect for
employee rights within the workplace, contributing to a conducive and harmonious employment environment.