The GNPC Ex Gratia and ESB Award

3713234979762_6352579126496Under Section 5(4) of the GNPC Act (PNDCL 64), “the remuneration of the members of the Board shall be determined by the President on the advice of the Minister.”

We have learnt that, at least two former Board Members, have recently been awarded ex gratia and/or ESB to the tune of over million cedis.

Thus, the first issue is whether this remuneration, was determined by the President on the advice of the minister, as required by the Act.

If the President determined this remuneration then he has to explain its basis. If he did not then he has to hold the Board accountable for usurping his powers under Section 5(4).

The second issue is to determine whether the remuneration is ex gratia or ESB. Ex gratia is like a tip. No organization has a legal obligation to pay ex gratia. End of Service Benefits (ESB), on the other hand, are contractual. They must be specified ex ante in an employee’s contract or labor laws. An employee earns ESB and an organization has a legal obligation to pay it.

Put succinctly, ESB is a legal obligation and ex gratia is a moral obligation.

Thus, when the Board of Directors of the Ghana National Petroleum Corporation (GNPC) says it “has approved the payment of ex-gratia to four former employees of the Corporation” who “were all removed from office in 2001, under circumstances that did not allow for the payment of their respective accumulated separation entitlements,” it is important to ask whether the Board is paying ex gratia or ESB?

Ex gratia has nothing to do with accumulated separation entitlements and the Board’s statement quoted above is meaningless and misleading.

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!

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.

Finally, I must say that the determination of whether the employees are entitled to 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). That Board, sub silencio, has spoken unequivocally on the matter. It does not lie in the bosom of another Board, 14 years after the removal, to reverse the decision of the 2001 Board or otherwise retroactively modify an executed labour contract!

Without doubt then, the said award is most unusual as it amounts to a retrospective modification of an executed labor contract, a violation of the ESB freeze policy in existence since 1991 and a highly questionable, perhaps fraudulent, payment of ex gratia.

In sum, this transaction is diseased with illegalities and improprieties.


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