Ex-gratia for Tsatsu, others ‘fraudulent & illegal’ – Law Professor

A legal scholar, Professor Stephen Kwaku Asare, has questioned the legal basis on which the Ghana National Petroleum Corporation paid ex-gratia to three of its former employees including Mr Tsatsu Tsikata, a former Chief Executive.

Likening ex-gratia to a tip, he argued that “no organisation has a legal obligation to pay ex-gratia” because it is only a moral obligation, hence described the GNPC’s action as “diseased with illegalities and improprieties”.

In a Facebook post, the US-based law professor explained the difference between ex-gratia and End of Service Benefit [ESB], pointing out that the latter is contractual and always specified in an employee’s contract or grounded under labour laws.

The Member of Parliament for Adansi Asokwa, Mr K.T. Hammond raised the issue of the ex-gratia in Parliament and called for a probe into the payment which he considered illegal because the monies were meant for specific projects.

He claimed Mr. Tsikata and another former Chief Executive, Mr Asafu Adjaye,  had been paid GhȻ1 million each as ex-gratia, while Esther Cobbah who was a former Public Affairs Manager received about GhȻ600,000

The GNPC subsequently  issued a statement Monday afternoon to justify the payments, explaining that the four former senior management personnel and two managers were entitled to the monies, and noted the decision to pay was taken by its Board of Directors.

“They were all removed from office in 2001 under circumstances that did not allow for the payment of their respective accumulated separation and entitlements. The board of directors of the corporation after an in-depth review of the situation, concluded that the payment of the end of service benefit to these management personnel who have made invaluable contribution to the development of the corporation is a valid obligation,” the statement said.

But Prof Asare wondered whether the payment was an ex-gratia or ESB. He stated that whichever it is, there is no justification whatsoever considering there was a freeze on ESB in the early 1990s through to the time the former employees were in service.

He argued that even the determination of whether the employees are entitled to either ESB or deserving of ex gratia is a duty that properly belongs to the Board at the time of their removal or perhaps the immediate succeeding Board.

“It does not lie in the bosom of another Board, 14 years after the removal, to reverse the decision of the 2001 Board,” he added.
“If ex gratia, the Board will be on very shaky foundations and, in my opinion, could be willfully causing financial loss to the State. A Board cannot retrospectively, here some 14 years ago, award ex gratia to employees.

“If ESB, the contract basis of the payment must be clearly specified. Retrospective contracting won’t do! Sans such a contract, the payment of ESB could very well be fraudulent!” he argued.

“It is a matter of record that the PNDC government froze the award of ESB as part of its austere measures in the early 1990s. Notwithstanding the TUC’s call for defreezing the ESB, because it was part of the Collective Agreements of workers, as far as I can tell ESB remained frozen for the measurement period that this 2015 Board claims to be granting the award. This only accentuates the likelihood that the award is fraudulent,” he contended

Source: 3news.com By Stephen Kwabena Effah