Month: January 2024

 “SIGA is a new institution and I expect that you would help develop a new culture… the attitude must be new king, new law; a new authority, a new culture; a culture of accountable governance and of respecting the norms; sensibilities and practice of good corporate governance.”

These were the words of the President of the Republic of Ghana during the launch of the State Interests and Governance Authority (SIGA). SIGA is the new authority established under the State Interests and Governance Authority, Act 2019 (Act 990)  (‘the SIGA Law’) to ensure that companies and other entities in which the government holds shares are efficiently run and adhere to good corporate governance, and ultimately make profit.

Typically, state-owned enterprises are established for the following reasons:

• Addressing market failures by providing public goods and funding for key infrastructure projects.^[1]
• Supporting vulnerable social groups by protecting jobs in so-called sunset industries.^[2]
• Ensuring stability and affordability of public utility prices.^[3]
• Promoting industrialization, particularly by launching new industries with significant start-up costs and long-term investments.^[4]
• Limiting non-state ownership in specific industries such as the arms and network industries (for national security reasons).^[5]

• Serving as vehicles of innovation, knowledge dissemination, and technological spin-offs.^[6]

Entities with state interest

In many of the world’s major economies, state-owned enterprises play an important role^[7] and the case in Ghana has been no different.

In many of the world’s major economies, state-owned enterprises play an important role and the case in Ghana has been no different.

After Ghana attained independence, the government realized the need to develop the economy in certain major areas. The government felt that some services were so fundamental that the companies that provided them had to be controlled by the State and not left completely in private hands.^[8]

Successive governments have therefore owned or held stakes in businesses operating in key sectors of the economy such as agriculture, agro-processing, mining, commodity trading, manufacturing, utility service provision, and hospitality. This deliberate policy led to the establishment of a myriad of entities with varying levels of government ownership and control.

Under the SIGA Law, businesses that are owned in whole or part by the government are classified under four main groups. They are either State-Owned Enterprises, Joint Venture Companies, or Other State Entities.

State-owned Enterprises (SOEs) are entities whose shares are wholly held or controlled by the Government of Ghana. They are usually entities set up for commercial purposes and may take the form of special-purpose vehicles like ESLA Plc. and Ghana Amalgamated Trust (GAT).^[9]

The last published State-Ownership Report by SIGA[10] stated that there are a total of 132 SOEs in Ghana.

Joint Venture Companies (JVCs) are business arrangements in which different persons or entities contribute capital, labor, assets, skill, experience, knowledge, or other resources useful for the business and share the profits and risks associated. Under Ghana’s State Ownership law, JVCs are those entities in which the government holds majority or minority shares.

Other State Entities (OSEs) are entities that, though not wholly or partly owned by the State, are nevertheless brought under the purview of the SIGA. The Minister of Finance, with supervisory authority over the SIGA, has the power to declare an entity as a Specified Entity; thus, bringing it under SIGA‘s ambit. Examples of Other State Entities are regulatory bodies and statutory agencies.

This article is an inquiry into the issues that underlie the poor performance of a significant number of entities with state interest and provides a commentary on whether the challenges are attributable to the legal regimes that have governed state-owned enterprises.

Down memory lane

State Enterprise Secretariat (SES-1965)

The SES-1965 was first set up by the State Enterprise Secretariat (SES), 1965 Legislative Instrument (L.I. 47) to ensure the efficient running of state enterprises and was directly responsible to the President. The SES had four main divisions;

• Planning and Statistics Division
• Accounts and Audit Division
• Inspectorate Division
• Personnel and Training Division

A look at the structure of the SES-1965 reveals that it was set up mainly to supervise and check the operations and financials of the fifteen (15) manufacturing enterprises and six (6) mixed enterprises that were under its jurisdiction.^[11]  The SES-1965 was short-lived as a result of the 1966 coup, but it failed in its short lifespan to achieve its mandate because it did not wield the power to ensure that its efficiency measures were implemented.

Some scholars have attributed the SES-1965’s failure at the time to the blurring of the responsibilities of the President, Ministers, and the SES-1965 itself.^[12]

State Enterprises Commission (SEC-1976)

The SEC-1976 was established by the Supreme Military Council Decree, 1976 (SMCD 10). This was a commission of a maximum of five members and headed by a chairman. The chairman was supposed to be a Ghanaian of distinction with a minimum of ten years of practical experience in an executive position in business or administration

It is interesting to note that to qualify for the chairmanship of SEC-1976, one had to be at least forty years of age. The rather interesting provision restricting the age of the chairperson may be attributed to the tensions that existed at the time between relatively junior officers in government and the senior commanders of the armed forces.^[13] The senior commanders of the armed forces who had just captured power from junior military officers perhaps wanted to keep the younger ranked officers in check by preventing them from holding influential positions.

Its members were to be appointed by the political administration at the time^[14] and the SEC-1976, as a corporate body, was answerable to the Head of State. The SEC-1976 had both advisory and executive powers over the operations of all statutory corporations. It could recommend the revision of the objectives of any statutory corporation, perform a management audit of officers of statutory corporations, review operations, staff strength, and conditions of service, as well as recommend the closure or reclassification of any entity that was ill-conceived or could not make a profit.

During a parliamentary debate on May 27, 1981, the following reasons were given as to why the SEC-1976 was unable to live up to expectations.

• The range of functions and responsibilities assigned to SEC-1976 was too enormous for its size and capacity.
• It never had its full complement of members over the entire period of its existence.
• It did not have the staff strength and competence to effectively supervise and control the operations of the corporations.
• It had no say in the appointments of the chief executives and directors on the Board.
• There was an overlap in the mandate of some of the ministries and the state-owned enterprises, resulting in unnecessary political interference. This was worsened by the fact that the ministries themselves did not have the time or expertise to supervise or coordinate the corporations.
• Notwithstanding the challenges associated with ministries, the corporations tended to gravitate toward their parent ministries in dealing with their operational challenges rather than SEC-1976.
• The government did not provide the needed capital and financial support.

State Enterprises Commission (SEC-1981)

The SEC-1981 was established by the government of the Third Republic of Ghana after a period of military rule. The enactment of the State Enterprises Commission Act, 1981 (Act 433) replaced the State Enterprises Commission (SEC-1976). One of the key features of SEC-1981 was that it had no executive powers and its functions were mainly advisory.

While the totality of SOEs made a loss during the year in review,

SOEs with minority government interests made a profit.

The State Enterprises Commission Act, 1981 (Act 433) separated the commercial corporations from non-commercial ones. The functions of the SEC-1981 were limited to the industries that were intended by the government to act as purely commercial entities and operate on commercial lines. This change was a reaction to the lack of capacity of the SEC-1976 to adequately supervise all the covered entities.

State Enterprises Commission (SEC-1987)

This was set up by the State Enterprises Commission Law, 1987 (P.N.D.C.L. 170) which repealed the SEC-1981.  It had thirteen objectives, many of which were a repetition of the objectives of its predecessors. Some of the new objectives were the examination of investment proposals of the entities, ensuring the payment of appropriate dividends to the government, recommending government guarantees, credit, and financing, provision of consultancy services at an agreed fee to be paid into the Consolidated Fund, and the possibility of engaging the services of a consultant where it requires such services.

Entities with state interest^[15] were required to submit annual reports and any documents required to the SEC-1987. PNDCL 170 proscribed any expansions or modifications without the approval of a feasibility report by the SEC-1987. The SEC-1987 was answerable to the President through the Minister. The SEC-1987 also had disciplinary powers in the form of recommending the dismissal, suspension, or forfeiture of an officer who contravened the provisions of the State Enterprises Commission Law, 1987 (P.N.D.C.L. 170).

State Interests and Governance Authority (SIGA)

SIGA was established by the enactment of the State Interests and Governance Authority (SIGA) Act 2019 (Act 990) after the findings of a joint Government of Ghana and World Bank study^[16] recommended that the management of SOEs be streamlined and centralized under the government’s oversight to strengthen corporate governance, transparency, and accountability.

Under Act 990, SIGA has five objectives, which are to:

(a) Promote within the framework of government policy, the efficient or where applicable, profitable operations of specified entities;

(b) Ensure that specified entities adhere to good corporate governance practices;

(c) Acquire, receive, hold, and administer or dispose of shares of the State in state-owned enterprises and joint venture companies;

(d) Oversee and administer the interests of the State in specified entities; and

(e) Ensure that:

(i)  State-owned enterprises and joint venture companies introduce effective measures that promote the socio-economic growth of the country including, in particular, agriculture, industry, and services per their core mandates; and

(ii) Other State entities introduce measures for efficient regulation and higher standards of excellence.

It, however, has as many as thirteen functions as opposed to the two of its immediate predecessor. Notable among these functions are the development of a Code of Corporate Governance, assessing the borrowing levels of SOEs by the Public Financial Management Act^[17], advising the government on the removal of chief executive officers and board members of SOEs, coordinating the sale and acquisition of entities with state interests, ensuring adherence to annual performance contracts signed by entities with state interest and advising the minister with oversight over the authority.

Having gone back in time to scan the legal regime governing entities with state interest, it is clear that most of the predecessors of SIGA had the power to punish, or at least, recommend the removal of officers who failed to perform their corporate governance duties.

The current law, Act 990 specifically in sections 4 (i) and (j), empowers SIGA to:

(i) Advise the sector minister on policy matters for effective corporate governance of specified entities;

(j) Advise government on the appointment and removal of chief executive officers or members of the boards or other governing bodies of specified entities;

These wide powers notwithstanding, SIGA, in its latest State Ownership Report[18], only lamented the failure of entities with state interest “to honor their reporting obligations”, and noted that it is “a flagrant violation of the Public Financial Management (PFM) Act, 2016 (Act 921)” and condemned the practice as “a most unfortunate development that needs to be remedied’’.

The paradox of performance

From the foregoing, it can be concluded that the inability of entities with state interest to be efficient and profitable is not caused by a poor legal regime, but by poor implementation of the legal regime. It appears that the less interest the government has in a commercial venture, the more likely it is that the entity will be run efficiently and profitably.

In 2020, SOEs (wholly government-owned) recorded an aggregate loss of GH¢2.61billion while JVCs (with 10-50 percent government ownership) recorded an aggregate profit of GH¢11.81million. Entities in which the government holds an interest of not more than 10 percent^[19] made an aggregate profit of GH¢11.25billion.

Although these figures ought to be considered within the context of the impact of the COVID-19 pandemic, the trend is quite conspicuous. While the totality of SOEs made a loss during the year in review, SOEs with minority government interests made a profit.

While the totality of SOEs made a loss during the year in review,

SOEs with minority government interests made a profit.

SOEs and JVCs have been reporting net losses and net profits, respectively for quite some time now. Net loss for SOEs in 2017 stood at GH¢1,289million compared to net losses of GH¢2,115million and GH¢30,144million for 2016 and 2015 respectively. JVCs made net profits of GH¢711million in 2016 and GH¢800million in 2017.^[20]

Appointments of key personnel to SOEs are usually spoils of war to the lieutenants who fought alongside the king in the trenches during the election campaign. This practice, which was identified as far back as the days of the State Enterprise Secretariat in 1965, must be changed, or at least, balanced with a mechanism that compels the rewarded lieutenants to comply with the corporate governance principles enshrined in the law.

If these are not done, irrespective of the number of times the king changes the law, or the institution implementing the law, the words of Jean-Baptiste Alphonse Karr will still hold truth.

“Plus ça change, plus c’est la même chose”, to wit:  the more things change, the more they stay the same.

“Turbulent changes do not affect reality on a deeper level other than to cement the status quo. A change of heart must accompany experience before lasting change occurs.”

References

[1] Vickers, John, and George Yarrow. 1991. “Economic Perspectives on Privatization.” Journal of Economic Perspectives, 5 (2): 111-132.

[2] H. Christiansen Balancing Commercial and Non-commercial Priorities of State-Owned Enterprises. OECD Corporate Governance Working Papers no.6 OECD Publishing, Paris (2013)

[3] P. Matuszak, B. Kabaciński Non-commercial goals and financial performance of state-owned enterprises – some evidence from the electricity sector in the EU countries J. Comparative Econ. (2021), 10.1016/j.jce.2021.03.002

[4] A. Musacchio, S.G. Lazzarini Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond (first ed.), Harvard University Press (2014)

[5] Robinett Held by the Visible Hand: the Challenge of State-Owned Enterprise Corporate Governance for Emerging Markets World Bank, Washington, DC (2006)[5]

[6] P. Castelnovo, M. Florio Mission-oriented public organizations for knowledge creation L. Bernier, M. Florio, P. Bance (Eds.), The Routledge Handbook of State-Owned Enterprises, Routledge, London & New York (2020)

[7] Maciej Bałtowski, Grzegorz Kwiatkowski, State-Owned Enterprises in the Global Economy June 2, 2022, by Routledge

[8] Mr. K.Addai-Mensah, Member of Parliament for Bantama during the Second Reading of the State Enterprises Commission Bill May 22, 1981

[9] State Ownership Report 2020 – Ministry of Finance of the Republic of Ghana

[10] State Ownership Report 2020 – Ministry of Finance of the Republic of Ghana

[11] Public Corporations in Ghana (Gold Coast) during the Nkrumah Period – Dr. Dennis K Greenstreet

[12]   Public Corporations in Ghana (Gold Coast) during the Nkrumah Period – Dr. Dennis K Greenstreet

[13] Singh, Naunihal (26 August 2014). Seizing power: the strategic logic of military coups. Baltimore, Maryland: Johns Hopkins University Press. pp. 89 & 139. ISBN 978-1421413365.

[14] The Supreme Military Council

[15] With the exemption of 79 entities stated in the Schedule to P.N.D.C.L. 170

[16] On the corporate governance framework of the various SOEs from the year 2013 to the year 2015.

[17] Public Financial Management (PFM) Act, 2016 (Act 921)

[18] 2020 State Ownership Report

[19] Mostly mining companies

[20] 2017 State Ownership Report

Imagine having to spend a great deal of time, effort, and resources to resolve an otherwise avoidable project-related dispute that arises from a contractor’s inability to complete your project within schedule and budget. What’s more, consider having to expend money to resolve a misunderstanding on the parties’ obligations simply because you failed to monitor and ensure that your project objectives were met. The expense, both financially and time, for the resolution of such avoidable disputes especially concerning construction contracts can lead to financial loss, project cost overruns, and delays with attendant opportunity costs. This and many other reasons are why it is vital that upon the execution of a contract for any project or work, steps are taken to manage and monitor the performance of the contractual obligations of the parties.

The construction sector is one of the most active sectors in Ghana with activities cutting across all forms of infrastructure. The construction sector is ranked as one of the highest contributors to Ghana’s GDP and ranked as one of the fastest-growing sectors of the economy. The sector witnessed a positive growth of 14.2% in the first quarter of 2021 according to figures from the Ghana Statistical Services. As a capital-intensive activity, the costs usually associated with the construction of any infrastructure should warrant that its execution must be without disputes or minimal disputes. A major factor in avoiding (or at least minimizing) such disputes and attendant implications is effective contract administration. The focus of this article is to discuss the importance and requirements of administering contracts. It makes a case for the need for prudent contract management or administration and provides a guide for entities and individuals already implementing projects to improve their contract administration practices to achieve excellent results.

The scope and practice of contract administration

In our day-to-day activities, the administration of contracts is evident in one way or the other, when we strive to ensure we get what we pay for from service providers. From the customer who requests the carpenter to produce an item or the one who commissions another professional to build a physical infrastructure. The constant monitoring of project delivery to ensure that one is satisfied with the product or services being obtained under a contract is administering the contract. This is done to ensure that we obtain an end product that is of the requisite quality, on time, and within budget. The failure to monitor the progress of one’s “order” from a service provider can result in having to deal with all manner of misunderstandings.

From the above, contract administration simply refers to the effective management of contracts between an employer or client and a contractor to ensure the successful realization of the contract objectives. The administration of any contract is not limited to any identifiable group of professionals or specialized practice or industry. If one monitors the progress of “personal projects”, then it is undeniable that for major construction projects in which huge resources are invested, the omission of a diligent and professional administration of the contract would come with unfavorable outcomes.

Thus, it is important that project sponsors or financiers, contractors, and in some cases, regulators ensure that prudent administration of contracts is made a part of any project to help the parties effectively measure the performance of contractors. Instituting this as part of any project also helps to achieve a clear understanding of the contract requirements to maximize contractual benefits and avoid all manner of challenges. Even if challenges should exist, the contract being administered will ensure early detection and resolution of challenges thereby reducing bigger or complex problems in the future.

The initiation or commencement of any project or work will require that the parties (client and the supplier) agree on the scope of the required services, the obligations of each party, the reporting requirements and agreements on how potential disputes will be resolved, and other matters. These details will usually be outlined in a written contract after negotiation of the key terms. An important aspect of the entire contract execution cycle is the contract administration process. The process is all-inclusive and often begins from when the contract is awarded through to when:

• The works/project is completed and accepted by the owner or;
• When the contract is terminated per the contract terms;
• Payment has been made;
• All defects have been rectified; or
• Where disputes have been completely resolved.

The administration of any contract may vary from project to project depending on the project type and size. However, the management or administration of the contract requires the contract administrator to possess a high level of accountability and responsibility. The individual must have the knowledge and skill to understand the relevant contractual provisions, obligations, and rights of the parties, understand the nature of each contractual party’s objectives, and ensure that the agreed terms are complied with to ensure those objectives are met. The individual appointed to undertake this role could be an employee or representative of the project owner whose responsibility is to monitor the contract implementation.

Technically, the role of the administrator will commence when the contract is in place, although practically, the responsibilities will have commenced before the contract comes into existence. It is therefore important to ensure that, a contract administrator is involved at each stage of the contract process until finalization. At the early stages of the contractual cycle for a typical construction project, some of the contract administrator’s roles would generally include, advice on the appropriate procurement method to deploy, the selection of the contractor, and the appropriate contract form to use for the project, etc.

In managing the day-to-day activities of any project, the contract administrator must keep a keen eye on any potential issues that may give rise to future disputes and ensure these are addressed at an early stage. To successfully administer the contract, the contract administrator will have to put in place the relevant steps to be adopted to achieve specific outcomes. The steps should identify the specific tasks to be undertaken, break down the tasks into activities, indicate the timelines for performing each activity, and the precise steps involved with carrying out each activity.

The Process of Contract Administration

To have an efficient administration process, it is recommended to set out in a practical manner activities to be undertaken at each stage of the project. That is at the contract preparation stage, the implementation and completion stages.

The following activities or actions are recommended at each stage:

1. Preparation of a Contract Administration Matrix

It is crucial to develop a schedule that outlines or breaks down all the key deliverables or work structures. It must also incorporate dates or milestones in the contract for achieving specific phases or outputs of the work. The matrix or schedule must have the following:

• A breakdown of obligations – the obligations of each party to the contract (including subcontract) must be identified with a list of the specific people who will perform each task.
• Timelines with inbuilt buffer or lead time for performance – the timelines for the performance of each obligation identified must also be noted. The schedule must ensure adequate lead times to avoid delays.
• Risks or dangers – issues that may lead to project delays, cost overruns inability of service providers to perform, etc. must be flagged in the matrix and steps must be taken to address them.
• Risk prevention or mitigation measures – having identified those potential issues that may pose a risk in one way or the other, the specific actions that must be undertaken to address or reduce the impact of the risks should be outlined.

1. Implementation

• Checklist – it is key to develop a list of all the actions that must be undertaken as part of implementation. Specific documents such as permits, licenses, guarantees that must be submitted, notices to be issued, reports to be submitted, etc. must be included in the checklist as appropriate.
• Alerts – reminders for required activities and reports including the formats of the reports and the mode of delivery must be included in the schedule.
• Notices – ensure that a good communication process is established to help both parties achieve a clear understanding of issues. For example, setting up a project-specific email for all persons involved with different aspects of the project implementation is essential for regular updates.
• Meetings – periodical meetings (including site meetings) must be held between all the stakeholders to help facilitate better communication and manage the project successfully. Records of such meetings must be properly kept.
• Use of payment-tied deliverables – adopting a system where payments are tied to the successful execution of various aspects of the project (which are measurable) will aid in effective administration.
• Proactive engagement – it is important to plan, be in control, and manage all the stakeholders and aspects of the project for timely execution.
• Fallback mechanism – to help counter risks that have a higher impact, the development of a contingency measure is necessary for managing risks so that alternative options can be readily deployed where necessary.

1. Completion

• Testing and handover – clearly identify the persons who will engage in quality control and testing and also establish clear criteria or protocols to be followed for testing, inspection, and handover of the project.
• Defect period monitoring – there should be a periodic review of the completion of all defects and any outstanding works. A final inspection with all relevant parties must be carried out ahead of the expiration of the defect period.

Conclusion

An effective contract administration is beneficial to all parties involved in any contract in one way or the other. The need for project sponsors or owners, contractors, and financiers to ensure that the project in which resources are invested is executed within budget and time cannot be overemphasized. Project sponsors will find that an efficient contract administration will allow them to make some real-time decisions, and review and understand all relevant details of the project during implementation. The opportunity to monitor costs, promote transparency in project cost variations as well as enhanced engagement with relevant stakeholders are some of the numerous advantages that come with contract administration.

It is not, therefore, enough to simply execute a contract and hope that the contractor and all other professionals involved will deliver a good project. Attaining quality services that meet the specifications of the contract, timely completion of projects within budget and problem-free close-outs do not happen by chance. It requires thorough management and supervision by a professional who is dedicated to ensuring that your objectives are met. So the next time a project is being developed, remember to put in place an efficient administration process.

In this competitive global economy, where competition is no longer limited by geography or industry, formidable new competitors can arise seemingly overnight. To succeed in the business environment, organizations must be able to inspire all levels of employees to be innovative or risk being overtaken by creative competitors. In such an environment, one of the surest ways for an organization to fail is its inability to innovate.  A major factor that kills innovation is workplace bullying. Bullies not only stifle productivity and innovation throughout the organization, but they most often target an organization’s best employees, because it is precisely those employees that bullies see as a threat. As a result, enterprises are robbed of their human capital in today’s competitive business environment. For organizations to survive, they must root out workplace bullying before it crushes their employees’ creativity and productivity, or even drives out their best employees, fatally impacting an organization’s ability to compete.

This article discusses bullying in the workplace, looking at its various forms and implications. It also discusses cyberbullying in the light of remote working occasioned by the spread of Covid-19. The article will look at Ghana’s regulatory framework on the subject and propose some measures that workers can adopt when bullied. It then concludes with suggestions on the way forward.

Workplace Bullying

Workplace bullying consists of “acts or verbal comments that could psychologically or ‘mentally’ hurt or isolate a person in the workplace. Bullying usually involves repeated incidents or a pattern of behavior that is intended to intimidate, offend, degrade, or humiliate a particular person or group of people. It has also been described as the assertion of power through aggression”[1]. Bullying, therefore, takes the form of verbal, physical, social, or psychological abuse. Concerning workplace bullying, there is usually evidence of interpersonal hostility in the workplace through aggressive behaviors which happen frequently over a long time. Further, it happens where there is an imbalance of power.

Forms of Workplace Bullying

Workplace bullying may take various forms. The verbal or physical abuse may be obvious. However, other less obvious forms include:

1. Requesting an employee to undertake new tasks or tasks that fall outside the employee’s typical duties or skill set without training.
2. Stalling applications for training, leave, or promotion without valid reasons.
3. Removing areas of responsibility without cause.
4. Giving unreasonable deadlines that will set up the individual to fail.
5. Constant or frequent unwarranted supervision by the employee’s supervisor or manager.
6. Persistently ridiculing an employee with the explanation that the employee cannot handle his/her work and thus requires further training though the specific shortfalls are not discussed with the employee.

These incidents may initially seem random. However, they may become continuous and cause the employee to worry that such incidents are a result of his/her actions and cause the employee to fear that he/she is likely to be fired or demoted.  Consequently, thinking about work, even during time off and leave days may cause anxiety, fear, and stress affecting the employee’s physical, emotional, and mental health which may indirectly impact their work output. There are instances where workplace bullying has led to the death of employees by suicide as happened in the Brodie Panlock case in Victoria, Australia where a 19-year-old took her own life after being relentlessly bullied at work leading to the passage of the Brodies Law.[2]

Remote Working and Cyber Bullying

Workplace bullying is not only confined to the physical workplace where the employees meet as a group. The COVID-19 pandemic brought about an increase in remote working, that is, working from home or places other than the physical workplace designated by the employer. As companies shift to remote work, workplace bullying has shifted into cyber bullying which is on the rise[3]. Workplace cyberbullying typically occurs through email, social media, internal communication platforms, voice calls, or text messages. Workplace cyberbullying is generally defined to cover “frequent interruptions during virtual meetings, unkind emails and repeated and excessive emails from managers. Some employees may “hide behind their screens” and not uphold the usual standards expected of them”. With this work arrangement, bullies can reach their victims at all times of the day due to the increased use of and reliance on technology to communicate. Natalia D’Souza, of Massey University in New Zealand, stated that “workplace cyberbullying can extend into targets’ home lives and act as a constant stressor, preventing them from unwinding and replenishing their coping resources.” Cyberbullying has the same effect on employees as in-person workplace bullying. The emotional turmoil to the victim and the risk to the organization remain the same.

Implications of Bullying

Workplace bullying (including cyberbullying) exists in organizations often between a superior and a subordinate and in less varying degrees between or amongst co-workers. Bullying can have serious effects on the physical, emotional, and mental health of an individual leading to anxiety, depression, and low self-worth. Bullying in the workplace is a systemic problem related to the actions and reactions of an organization. It also affects the individuals involved, as well as all those who witness the behavior. Whilst witnesses may be willing to actively help and support the employee being bullied, it is often very difficult for them to stand up against the bully. Often, they fear retaliation from the bully, as they fear losing their job or may believe that they do not have the authority to intervene. Additionally, persons who witness such bullying may either ignore the bullying or frame it as “normal behavior”, especially when it is recurrent within the organization without consequences or without the perpetrator being held accountable. These behaviours affect the productivity of the individual and since the achievement of the organization is dependent on the collective efforts of all its staff, poor performance of individual staff has a snowball adverse effect on the organization. Specifically, workplace bullying will result in poor work performance, valuable employees leaving the organization, and a hostile work environment.

In a survey conducted by the International Bar Association’s Legal Policy and Research Unit, which examined the nature, prevalence, and impact of bullying at the workplace, the responses showed that the failure to combat bullying has very serious consequences, including employees leaving the workplace. The ultimate effect of this is that it is likely to lead to a detrimental impact on the brand and reputation of the organization. Where there is no accountability for bullying in an organization, it can quickly become an entrenched problem. When this happens, there are implications not only for the employees but the organization too, as unhappy staff are not productive staff.

Regulatory Framework in Ghana

Ghanaian law provides that every worker has the right to work in a safe and healthy environment. Consequently, all employers have a responsibility to ensure that their employees work under satisfactory, safe, conducive, and healthy conditions by developing and implementing workplace practices that address inappropriate workplace behavior and respond to complaints effectively. The Constitution of the Republic of Ghana, 1992, (“Constitution”) and the Labour Act, 2003 (Act 651) both provide for the need for an employee to work in a safe, healthy, and conducive environment. Too often, however, the focus has been on physical safety in the work environment and not the behaviors of colleagues employees, or superiors that affect the mental health of workers. Whilst it can be argued that bullying detracts from the requirement of a safe working environment, it is overlooked and not expressly mentioned in the regulatory framework. The Constitution and Article 1 of the Universal Declaration of Human Rights (UDHR) also prohibit discrimination based on gender, race, color, sex, religion, political opinion, national extraction, economic status, or social origin. If such factors form the basis of bullying at the workplace, such acts will be in breach of the statutory provisions against discrimination.

What Employees Can Do When Bullied

Unfortunately, there is not a one-size-fits-all approach. In a publication titled “Dealing with Workplace Bullying- A Practical Guide for Employees” published by the Government of South Australia under an Interagency Roundtable on Workplace Bullying discussion, the following can be considered as remedial and coping mechanisms:

1. Employees who feel bullied must try to respond instead of reacting. Responding means being prepared for the outcome in advance and assessing the outcomes. Approach the bully and make it clear to the bully as soon as possible that the behavior is unacceptable.
2. Employees must familiarize themselves with their rights and know their workplace bullying policy and the reporting procedure and follow it if needed. These procedures are often in an Employee Manual or the Employment Contract.
3. Use more formal procedures to resolve the issue. By this approach, a formal investigation may be required if the informal procedures are not successful, or the situation is more serious.

If the situation cannot be resolved, consider the option of leaving the organization, as it is difficult to change a bully. Real behavior change is difficult, and it takes time. A bullied person would not have control over the bully’s willingness to accept that they have a problem and to work on it. Thus, the option available is to manage the situation. In the worst-case scenario, an employee who is bullied may decide to leave the job or be prepared for a long hard fight with the bully.

What Employers Can Do in Bullying Matters

Employers must take steps to maintain a work environment that is devoid of bullying. There must be active steps and measures to discourage bullying and to effectively deal with it quickly if it happens. Specifically, employers must:

1. Ensure current policies and procedures address issues related to employees respecting one another in the workplace (physical or remote).
2. Provide easy access to communication channels and support systems
3. Process complaints fairly by implementing a standard investigation process to evaluate reported incidents.

Just as employers have preventative measures to deal with employees’ physical health, there must be systems to deal with bullying which affects the mental health of employees.

Recommendations and Conclusions

Bullying is not acceptable under any circumstance as it has, in extreme cases, caused the deaths of bullied employees by suicide (as in the Brodie Panlock Case). Bullying, therefore, has no place in an organization that seeks to be successful. Consequently, workplace bullying requires greater focus and priority due to its adverse effect on the employee. For organizations to compete, the organization needs to adopt internal measures that allow for complaints and investigation of bullying behavior without victimization. Additionally, the organization must train human resource personnel and managers to spot red flags such as when a superior refuses to assign tasks to particular employees, consistently undermines the employee’s work, or socially excludes particular employees and addresses them effectively. Stricter punishment must apply to bullies, especially in cases of serious bullying such as persistent criticism. Having a workplace policy on bullying that does not allow interference with any investigation is a step to prevent workplace bullying and is likely to benefit organizations and the health of their employees. This will ultimately boost staff retention and more especially retain top talent of the organization.

There should be a national dialogue to have a robust regulatory framework that adequately caters to persons bullied at the workplace and makes the penalty punitive enough to serve as a deterrent to others, especially in instances where the bully intends their victim to experience “mental harm” which encompasses suicidal thoughts and self-harm.

Above all this, workers must always remember to take care of their own emotional and physical health first!

[1] Definition by the Canadian Centre for Occupational Health and Safety

[2] Crimes Act, 1958 (Act Number 6231/1958) Version 294, and (Section 21A (8), Amendment to the Victorian Crimes Act, 1958

[3] Gwen Moran, Why Remote Work Hasn’t Cut Down on Workplace Harassment, /www.fastcompany.com/90694967/why-remote-work-hasn’t-cut-down-on-workplace-harassment

Former United Nations Secretary-General Kofi Annan once famously said —” It is my aspiration that health finally will be seen not as a blessing to be wished for, but as a human right to be fought for.”  The right to health is now universally recognized as an integral part of human rights. In Kenya, the right to health has been categorized as a socioeconomic right that has its footing in Article 43 of the Constitution which provides that: “Every person has the right to the highest attainable standard of health, which includes the right to health care services…”

Health and medical care are intrinsically linked; although one never needs medical care when one is healthy, good health, once lost, is restored through good medical care. In what way therefore does the right to medical care play out in the employment context? Do employers have the duty to guarantee their employees the right to health as enshrined in the Constitution? Does the Employment Act cast any obligation upon employers to ensure (or try their best to ensure) the good health of their employees?

The Employment Act on the Right to Health

Part V of the Employment Act lists all the duties of employers concerning contracts of employment. Of particular note in the context of health is the employer’s duty to provide medical attention, prescribed under section 34 of the Employment Act. The duties are set out as follows:

(1) An employer shall ensure the provision sufficient and of proper medicine for his employees during illness and if possible, medical attendance during serious illness.

(2) An employer shall take all reasonable steps to ensure that he is notified of the illness of an employee as soon as reasonably practicable after the first occurrence of the illness.

(3) It shall be a defense to a prosecution for an offense under subsection (1) if the employer shows that he did not know that the employee was ill and that he took all reasonable steps to ensure that the illness was brought to his notice or that it would have been unreasonable, in all the circumstances of the case, to have required him to know that the employee was ill.

The Court’s interpretation of section 34 of the Employment Act

The Employment and Labour Relations Court is a specialist Court set up under Article 162 of the Constitution to hear and determine matters on employment and labor relations. While Parliament must enact and pass legislation, the duty of interpreting the law is vested in the Courts.

The Employment and Labour Relations Court was recently called upon to interpret section 34 of the Act in the case of Eddie Mutegi Njora v Mega Microfinance Co. Ltd [2015] eKLR.

Brief facts of the case

On 26th July 2008 the Claimant was employed as an Administrative Officer with the Respondent but a written contract of employment was only issued to him on 22nd February 2011 and was backdated to 26th July 2008. The Claimant was also simultaneously engaged with Mega Initiative Welfare Society which was a sister entity to the Respondent company. The terms of the Claimant’s contract were that he would be paid Kshs. 40,000.00 per month as his salary; be entitled to 30 days leave per year; and an in-patient medical cover. The contract of employment was not issued immediately as is required by law and as a result, the Claimant did not know his terms and conditions of work. On 27th June 2011 the respondent issued the Claimant with a letter notifying him that his contract of service would end on 31st July 2011. Upon termination of the contract, the Respondent filed suit seeking:-

1. a) Accrued leave;
2. b) 3 years’ service pay
3. c) Unpaid medical cover; and
4. e) Compensation for not being issued with an employment contract

Decision of the Court

Upon hearing the case, the Court pronounced itself as follows concerning the employer’s duty under section 34 of the Act:-Where an employer provides a medical cover, such a cover is to ensure the employer has taken a progressive step to ensure all employees are covered in terms of medical care and attention at all times. Where an employer has not provided such a medical cover, once an employee is unwell, such information should be brought to the attention of the employer as soon as it is reasonably practical.

The employer then has to address the matter as appropriate where such sickness has been brought to their attention. The evidence by the Claimant is that he remained without medical cover from March to July 2011 and therefore should be compensated for the lack of such medical cover.

The Claimant however failed to submit any evidence of sickness and need for medical attention that was brought to the attention of the Respondent and that the Respondent failed to address such a  situation or that the Claimant was forced to incur medical bills and the Respondent failed to reimburse. The respondent here has to ensure the provision sufficient and of proper medicine for his employees during illness and if possible, medical attendance during serious illness as under section 34(1) of the Employment Act.

 Conclusion

The Court, in its application of section 34 of the Employment Act, adopted a literal approach and did not cast any greater burden upon employers to provide medical care for employees than what the Act expressly provides for.

There was no suggestion by the Court that an employer must obtain medical cover or insurance for employees but the Court did acknowledge that an employer that elects to do so (provide medical cover) is taking progressive steps towards ensuring its employees have the necessary medical care and attention at all times.

The Court however did confirm that the employer must provide proper medicine to its employees during illness, and medical attention during serious illness. Whilst the Court found that the employer has to know of any illness affecting an employee, there is an equal duty owed by employees to inform the employer of the same.