[2015]DLCA3144March 26, 2015Court of Appeal

MRS. JANET DOE vs. SOCIAL SECURITY AND NATIONAL INSURANCE TRUST AND THE TRUST HOSPITAL

The appellant had worked for over 20 years at Trust Hospital as an employee of SSNIT. Following an organisational restructuring in which Trust Hospital was separated from SSNIT and incorporated as a separate legal entity, the appellant was declared redundant with effect from 31 December 2012. She contended that under section 65 of the Labour Act, 2003 (Act 651), SSNIT was obliged to negotiate a redundancy package with her but instead unilaterally paid her an exit package comprising three months’ salary in lieu of notice and salaries for the remaining 22 months to her retirement. She protested through her lawyers that the package was arbitrary and inadequate, particularly because it did not account for pension contributions, possible salary increases, provident fund contributions, fuel allowance, clothing allowance and other employment benefits. She also alleged discriminatory treatment because younger employees were allegedly given a more enhanced package. Notwithstanding her protest, she retained the money, completed the handing-over and disengagement formalities, and surrendered SSNIT property. She then entered into a three-month employment contract with the Trust Hospital commencing 2 January 2013, but that contract was terminated after SSNIT restored her original employment following her rejection of the redundancy package. The Court of Appeal’s account of these facts appears principally in the opening narrative of the judgment beginning: “The plaintiff/appellant in this suit was employed for over 20 years at the Trust Hospital...” and continuing through the description of her claims and the respondents’ defence.

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TORKORNOO, J. A: The plaintiff/appellant in this suit was employed for over 20 years at the Trust Hospital as an employee of SSNIT, the 1st defendant/Respondent. In the High Court, her case was that SSNIT entered into an organizational restructuring exercise which separated the Trust Hospital from the organization. The Trust Hospital was taken over by the 2nd defendant/respondent, which had been incorporated as a separate legal entity. This exercise made her redundant along with other staff effective 31st December 2012. She argued that under Section 65 of the Labor Act 2003 (Act 651), SSNIT, was required by law to negotiate a redundancy package with her but they failed to do so. It reads - Section 65 – Redundancy 2) Without prejudice to subsection (1), where an undertaking is closed down or undergoes an arrangement or amalgamation and the close down, arrangement or amalgamation causes a. severance of the legal relationship of worker and employer as it existed immediately befor.....