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© 2024 AB LEXMALL ASSOCIATES

BREAKFAST DISCUSSION

Info@ablexmall.com

Dr. Kweku Ainuson

Partner

KAINUSON@ABLEXMALL.COM

3rd May 2024

GNBCC CORPORATE GOVERNANCE & LABOUR LAW WORKSHOP

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INTRODUCTION

CORPORATE GOVERNANCE

  • What is Corporate Governance
  • Importance
  • Structures
  • Regulatory

& Compliance

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INTRODUCTION

LABOUR LAW

    • Types of Employment
    • Employment Contracts
    • Termination of Employment.

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CORPORATE GOVERNANCE FOR WOMEN IN BUSINESS

Corporate Governance for businesses is important for the development of any nation.

In recent history, no country has developed without a strong business community.

In addition to nation-building, good Corporate Governance also brings financial benefits to the owners and the stakeholders around the business.

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CORPORATE GOVERNANCE FOR WOMEN IN BUSINESS

What you guys do, are thinking of doing or will be doing is therefore important for two reasons.

One you are contributing to nation-building and

two, you are contributing to your financial/social success.

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DEFINITION OF CORPORATE GOVERNANCE �

Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping a corporation’s performance.

It is an interaction between the company’s management, board of directors, shareholders, and other stakeholders like employees, suppliers, creditors, customers, etc

Corporate governance concerns the relationships among the management, board of directors, controlling shareholders, minority shareholders, and other stakeholders.

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DEFINITION OF CORPORATE GOVERNANCE

Ultimately, it is to ensure the growth and expansion of the company. Good corporate governance contributes to sustainable economic development by enhancing the performance of companies and increasing their access to outside capital.

Good corporate governance helps companies operate more efficiently, improve access to capital, mitigate risk and safeguard against mismanagement. It makes companies more accountable and transparent to investors and gives them the tools to respond to stakeholder concerns.

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IMPORTANCE OF CORPORATE GOVERNANCE �

Attracts investments

Ensures integrity, Transparency

Accountability – internal and external stakeholders (including accountability to yourself)

Fosters sustainable growth

Good relationship with regulators

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WHAT IS CORPORATE GOVERNANCE - PRINCIPLES�

Governance – Running the company for success

Fulfilling your obligation to the state – taxes/compliance

Corporate governance principles are found in many sources – The 1992 Constitution, Many pieces of legislation (Act of Parliament) Legislative Instruments, frameworks and principles developed by academics and practitioners – etc.

However, the one single document that encapsulates most of the principles of corporate governance is the Companies Act, 2019 (Act 992)

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GOVERNANCE STRUCTURE

There are different structures for doing business

    • Sole Proprietorships
    • Partnerships
    • Companies

For a lot of us this morning, our burning question is how do I operate lawfully in a way that will increase business growth and profitability.

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SOLE PROPRIETORSHIP �(MOM AND POP BUSINESS)

  • It is the simplest form of organizing and doing business.
  • The business operation is by a single individual.
  • There are no requirements under the law to file any registration processes prior to commencing business.
  • However, where the business name does not consist of the person’s true first name and last name or the initials thereof, the person must register the business name under the Business Names Registration Act, 1962 (Act 151)
  • The business name may be reserved for exclusive use under the Business Names Registration Act 1962 (ACT 151) as amended.

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PARTNERSHIPS

Partnerships are primarily governed by the Incorporated Private Partnership Act, of 1962 (Act 152)

Partnership is defined by Section 3(1) of the Incorporated Private Partnership Act as amended as the association of two or more individuals carrying on business jointly for the purpose of making profits.

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COMPANY

A company is a special purpose vehicle for doing business. The law says the company has a separate existence from the persons that formed the company. The company has some important institutions.

Shareholders (Members)

Directors (Collectively Board of Directors) and Management

Secretary and Auditors

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TYPES OF COMPANIES

1. Company limited by shares

    • a. private company limited by shares
    • b. public company limited by shares

2. Unlimited company

    • a. private unlimited company
    • b. public unlimited company

3. Company limited by guarantee

4. External company.

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SHAREHOLDER�

Annual General Meetings (AGM)

Extraordinary General Meetings (EGM)

Shareholders Agreement (SHA)

Shareholder Dispute

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BOARD OF DIRECTORS (BoD)

You need a BoD. Advisory Board?

    • For competence (legal, tax, core competencies)
    • Influence to open doors
    • Bridge with shareholders
    • Bridge with clients' community

How do you choose

Should I pay or not pay my board members?

The ideal number of Board members (min 2)

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SECRETARY & AUDITOR

Secretary

    • The secretary is no longer a clerk but a professional with a lot of legal responsibilities.
    • Consultant secretary – negotiate a plan and payment.

Auditor – Financial Reporting

    • Bookkeeper/Accounting services
    • Consultant Accountant/Auditor

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DEALING WITH TAXES�

  • Dealing with the tax man – Get your tax file opened at your tax office.

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  • The tax man is your friend and not an enemy – now customer service-centered.

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    • Corporate income tax 25%.

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    • An expense that is wholly, exclusively and necessarily incurred for the generation of an income is an allowable deduction.

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    • Withholding tax – 7.5% services, 10% commission,

8% rental residential, 15% rental commercial.

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    • PAYE for employees.

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SOCIAL SECURITY (18.5%)�

Employer contributes - 13%

Employee contributes - 5.5%

    • SSNIT – Tier 1 – 13.5
    • Pension Trust – Tier 2 – 5%
    • Provident Fund – Tier 3

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OTHER REGULATORY COMPLIANCE

Office of the Registrar of Companies (ORC)

Annual Returns

Beneficial Ownership

Amendment to Company’s Profile

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OTHER REGULATORY COMPLIANCE

Ghana Standard Authority

Food and Drug Authority

Environmental Protection Agency/Data Protection Commission/Business Operation Permit-MMDAs

Industry Specific Regulators

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TYPES OF EMPLOYEES

TEMPORARY WORKER

CASUAL WORKER

PERMANENT WORKER

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TYPES OF EMPLOYEES

Temporary Worker means a worker who is employed for a continuous period of not less than one month and is not a permanent worker or employed for a work that is seasonal in character.

Casual Worker means a worker engaged on a work which is seasonal or intermittent and not for a continuous period of more than six months and whose remuneration is calculated on a daily basis.

A Temporary Worker who is employed by the same employer for a continuous period of six months and more shall be treated as a Permanent Worker.

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EMPLOYMENT RELATIONSHIP

All these come together to govern Employment Relationships

  • Complications may arise
  • An employment contract alone is never enough
  • HR Manuals are important
  • Fairness

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CONTRACT OF EMPLOYMENT

“contract of employment” means a contract of service whether express or implied, and if express whether oral or in writing.

The employment of a worker by an employer for a period of six months or more or for a number of working days equivalent to six months or more within a year shall be secured by a written contract of employment. (within 2m)

A contract of employment shall express in clear terms the rights and obligations of the parties.

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ENDING THE EMPLOYMENT RELATIONSHIP

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  • Termination on Notice
  • Dismissal
  • Redundancy

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TERMINATION ON NOTICE

  • Employment relationships are not forced relationships
  • General Rule: An employer or employee can walk out at any time
  • Rules and practice to make walking out as orderly as possible

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NOTICE

  • Most employments are indefinite
  • Any party can walk out by giving adequate notice to the other party

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NOTICE PERIOD

  • No notice period?

Labour Act = one month notice

  • Reasonableness of notice period contained in employment contract
  • One month’s salary in place of notice

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POSITION OF THE COURT ON NOTICE

  • Giving notice is an alternative to giving reasons
  • Termed “Termination on Notice without Reasons”
  • ‘good’ or ‘bad’ reason irrelevant

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RECENT TWIST ON TERMINATION ON NOTICE

  • Surrounding circumstances in a termination on notice
  • Termination on Notice is considered to:
  • encourage dangerous, unfair and irresponsible behaviour
  • Consideration of fairness

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CURRENT POSITION ON TERMINATION ON NOTICE

  • Either party may terminate by giving the required notice in a letter
  • The termination letter does not have to give reasons
  • If a termination letter gives reasons, the courts may consider if they are fair
  • To determine fairness, courts may look at circumstances surrounding the termination

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EXAMPLE A

  • May: employer terminates employee
  • Pays 1 month’s salary instead of notice (GHS 4,000)
  • August: employer starts redundancy contemplated since January
  • Redundancy pay out: GHS 20,000 each
  • Employer got rid of employee early in May to avoid paying GHS 20,000

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EXAMPLE B

  • Employee uncovers embezzlement by management
  • Employee looking to gather proof to blow the whistle
  • Employee given 1 month’s salary instead of notice, no reasons given for termination

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EXAMPLE C

  • Employment contract giving 1 month’s notice for termination
  • Condition of service stipulates holding a hearing before any termination
  • Employer terminates by giving notice in accordance with employment contract without hearing

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SUMMARY

  • Pre-agreed notice or payment or payment of salary equivalent
  • No reasons needed
  • No unfairness

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DISMISSAL

  • Strongest form of punishment
  • Reserved for misconduct
  • Misconduct is equivalent to crime
  • Give examples of dismissal as a term of employment contract

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OFFENCES

  • Dishonesty
  • Fraud
  • Stealing
  • Extortion
  • Corruption
  • Bribery
  • Embezzlement
  • Gross insubordination
  • Verbal/physical abuse
  • Fighting
  • Assault
  • Drunkenness

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OFFENCES CONTD.

  • Illegal drug use
  • Conflict of interest
  • Competing with the employer’s business
  • Using company property for private benefit

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DISMISSAL CONTD.

  • Offence proved = dismissal
  • Employer may provide other events leading to dismissal eg.
  • poor performance
  • failure to reach set targets
  • slovenliness

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CRUX OF DISMISSAL COMPLAINTS

  • Proven misconduct
  • Procedure in handling dismissal
  • Dismissal tars the image of the employee and limits job prospects

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COMMON COMPLAINTS

  • Proven misconduct
  • Risky not to provide for examples of misconduct
  • Correct procedure
  • Need to provide procedure for dismissing employee

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PROCEDURE

  • Fair hearing
  • Written accusation
  • Written response
  • Determination
  • No need for formal hearing
  • There must be adequate time for response

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PROCEDURE CONTD.

  • Extra requirements for dismissal
  • Query and response
  • Investigation
  • Formal disciplinary hearing
  • Disciplinary committee
  • Formal report/recommendation

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ACTING FAIRLY

  • Rules of natural justice require procedural fairness.
  • To ensure fairness, persons affected by your decision must be given an opportunity to respond to all issues and allegations against them.
  • Remove any appearance of bias or conflict of interest

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TENETS OF NATURAL JUSTICE

  • Fair hearing
  • Avoid conflict of interest
  • Procedural fairness
  • Right to be informed of your wrongs
  • Right to be heard – including right to call witnesses and experts
  • Right to be represented
  • Opportunity to confront your accuser
  • Opportunity to respond to your accuser

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REDUNDANCY

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“Now all redundancies seem to lead to compensation for the worker”

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REDUNDANCY CONTD.

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  • Changes in production, restructuring, deployment of new technology
  • Closedown/arrangement/merger
  • Change in legal relationship
  • Reduced benefits/unemployment

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REQUIREMENTS FOR REDUNDANCY

  • Letter to Chief Labour Officer
  • Consult the trade union/worker
  • negotiated compensation
  • Need to soften the blow of termination

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THE PRACTICE OF REDUNDANCY

  • All redundancy seems to lead to compensation
  • Fuelled by terms and conditions of CBAs

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COMPENSATION FOR REDUNDANCY

  • Unionised workers with a CBA: There is the need to pay compensation
  • Non-unionised workers: No need to pay compensation for every kind of redundancy

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REDUNDANCY: TO DO LIST

  • 3 months ahead: letter to Chief Labour Officer
  • Notice to employee/union
  • Negotiations
  • Formal notice of details of compensation
  • Pre-redundancy meeting

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THE END

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QUESTIONS

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PREPARED BY

DR. KWEKU AINUSON

MANAGING PARTNER

AB LEXMALL & ASSOCIATES

Barristers/Solicitors/Consultants/Notary Public

M37 Kwadjonaa Avenue

ARS Estate, East Legon