COMMISSION ON HUMAN RIGHTS AND ADMINISTRATIVE JUSTICE vs. GHANA COMMERCIAL BANK [2001-2002] 1 GLR 531

COMMISSION ON HUMAN RIGHTS AND ADMINISTRATIVE JUSTICE v GHANA COMMERCIAL BANK

[2001-2002] 1 GLR 531

Division: HIGH COURT, ACCRA

Date: 22 NOVEMBER 2001

Before: ANSAH JA

Banking—Cheques—Clearance—Duty of branch manager—Banks agreeing schedule for clearance of cheques between them—Cheques drawn on branches outside Accra to be rejected if not cleared within twenty working days—Bank managers required to process cheques issued by customers on day of receipt—Rationale for rule—Petitioner branch manager keeping cheques issued by customer without money in account for several days until ordered to process cheques by bank’s inspectors—Adverse effect of manager’s action on operations of bank—Whether dismissal of petitioner by bank justified.

Employment—Discipline—Exercise of disciplinary powers—Justification—Petitioner bank manager breaching rules and causing loss to bank—Whether isolated breach justifying disciplinary action against petitioner—Whether magnitude of loss or fact that other employees have caused more loss and not been dismissed relevant to wrongfulness or otherwise of petitioner’s dismissal.

Employment—Discipline—Punishment—Choice of options—Bank manager dismissed for causing loss to bank—Bank freezing petitioner’s end of service benefits in exercise of sanction option—Whether harshness of punishment rendering it wrongful—Whether bank rightly exercising discretion in choice of punishment.

The bankers’ clearing house was constituted by commercial banks, including the Ghana Commercial Bank. Under a schedule for clearance of cheques drawn on members of the house, all cheques submitted for clearing at centres not specifically provided for in the schedule were to be cleared within “twenty working days after lodgment to the payee’s accounts.” The petitioner was a manager of the Suhum branch of the Ghana Commercial Bank—a centre not specifically provided for under the schedule. When inspectors of the bank audited the branch accounts, they found that the petitioner had kept at the branch some cheques drawn by a customer on his accounts when he had no money in the account instead of returning them to the customer. He only passed the cheques through the drawer’s accounts when he was instructed by the bank to do so. The bank claiming that the actions of the petitioner in suppressing the cheques had resulted in a loss of ¢33,582,329.13 to the bank dismissed him from their employment and also froze his end of service benefits Aggrieved by that decision the petitioner petitioned the Commission on Human Rights and Administrative Justice against the sanctions imposed on him by the bank.

[p.532] of [2001-2002] 1 GLR 531

After an inquiry the commission accepted the petitioner’s contention that (i) under the schedule for the clearance of cheques, he had twenty working days within which to process cheques paid into any account, therefore he had not suppressed the cheques; (ii) he had only kept cheques totalling ¢2,250,292 because all the others fell within the twenty working days rule and therefore could have been returned to head office as not having been cleared. The commission therefore held that the bank was wrong in dismissing him summarily and ordered the bank to unfreeze his benefits and pay him two years’ salary for wrongful dismissal. When the bank failed to comply with that order after three months, the commission brought an action under section 18(2) of the Commission on Human Rights and Administrative Justice Act, 1993 (Act 456) against the bank at the High Court to enforce its decision.

Held:

(1) since the case involved bankers, the rules of instructions on the clearing of cheques had to be interpreted according to the practice and usage among bankers. It was clear from the rules that specified the number of days within which a bank could clear cheques it had received that they were meant for banks only. By those rules, a bank could reject a cheque submitted to branch outside Accra or those specified places that had stayed in the clearing system for more than twenty working days. But managers were required to either reject or adopt a cheque by passing it through the customer’s account the very day that the bank received it. Thus if the cheque was neither lodged nor returned to the issuing bank when the account had no funds in it, it amounted to suppressing the cheque. Moreover, it would become an unauthorised overdraft on which the bank would be denied the chance to charge interest or the account. Since the twenty working days’ rule was not meant for customers to be given time to put money in their accounts, the petitioner’s conduct could not be justified on any reasonable ground. Accordingly, his dismissal by the respondent-bank was justified.

(2) It was not necessary that the petitioner should have been guilty of many breaches of the rules governing his work before disciplinary action could be taken against him. Since there was cause to discipline him, the isolated instance or ground was enough. Besides, the magnitude of the loss caused to the bank by the petitioner had no bearing on the wrongfulness or otherwise of his dismissal. Accordingly, the fact that another employee had broken more rules than the petitioner or that the petitioner’s conduct caused far less financial loss to the bank than what another employee’s breach of the rule caused were irrelevant considerations in the case.

(3) Since the dismissal of the petitioner was justified in the circumstances of the case, the respondent-bank had the power to mete out whatever punishment it thought fit. Moreover, since the harshness of the punishment did not per se make it wrongful, the respondent-bank could not be faulted for choosing an option open to it. Accordingly, the respondent-bank rightly exercised its discretion in denying the petitioner of his benefits.

ACTION by the Commission on Human Rights and Administrative

[p.533] of [2001-2002] 1 GLR 531

Justice at the High Court, Accra under section 18(2) of the Commission on Human Rights and Administrative Justice Act, 1993 (Act 456) to enforce its decision against the Ghana Commercial Bank in respect of a petition for, inter alia, wrongful dismissal brought against the bank by the petitioner, a former employee of the bank, after the bank had refused to implement the decision of the commission. The facts are sufficiently set out in the ruling.

Cephas Essilfie-Ansah for the Commission on Human Rights and Administrative Justice.

Chris Opoku for the petitioner.

A T Tamakloe for the respondent-bank.

Ansah JA. The complaint put before the Commission on Human Rights and Administrative Justice (hereinafter referred to as CHRAJ) was that the complainant had been wrongfully dismissed from his employment. He therefore petitioned CHRAJ for the following reliefs:

“(1) The complainant should be paid his end of service benefits.

(2) The complainant should be paid his salary at current levels, in addition to two years’ salary as damages for wrongful dismissal.”

CHRAJ, in exercise of its constitutional duties heard the complaint by taking evidence from both sides after which it published its decision in the following terms, namely:

“In the light of all the circumstances the commission upholds its earlier decision that the petitioner cannot be faulted for the total loss that the respondents suffered. Having held that the petitioner is not liable, the commission is of the view that the petitioner is entitled to his end of service benefits including his salary at current levels and damages for two years’ salary in line with GNTC v Baiden [1991] 1 GLR 567, SC in which the Supreme court approved of the court of Appeal decision in the case of Ghana Cocoa Marketing Board v Agbettoh [1984-86] 1 GLR 122, CA.”

The decision was given on 7 March 1996. Now, it was provided

[p.534] of [2001-2002] 1 GLR 531 in section 18(2) of the Commission on Human Rights and Administrative Justice Act, 1993 (Act 456) that if within three months after the report is made no action is taken which seems to be adequate and appropriate, the commissioner may bring an action before any court and seek a remedy for its enforcement. CHRAJ by the present action, commenced by an originating notice of motion, sought an order to enforce its decision.

The application was supported by an affidavit. The gravamen of the facts deposed to in the affidavit was that the complainant before CHRAJ, one Mr Dugbartey, was, at the time material to these proceedings, temporarily assigned the duty of managing the Suhum branch of the Ghana Commercial Bank (hereinafter referred to as GCB). The GCB alleged that Dugbartey suppressed some cheques drawn by a customer on his account at its Suhum branch when, instead of returning them to the drawer, for he had no funds in the account, he did not do so but chose to keep it at the receiving branch. It was only when inspectors went to the Suhum branch on inspection that this irregularity was detected. The inspectors then instructed Dugbartey to pass the cheque through the drawer’s account, which he said he did. The petitioner claimed that he was not responsible for the suppression of the cheques or the “unauthorised overdrafts”; he said one Mr Okae, his predecessor-manager at the bank, was the one who held schedules 37/176 and 37/178 over the twenty working-day period. The petitioner asserted that at the Suhum branch, the mandatory period for the clearing of cheques fell within 20 working days. The petitioner also stated that apart from exhibit 4, all the other cheques could have been returned as having not been cleared by the petitioner to the High Street branch of the bank on 11 October 1990. In all, the petitioner asserted that the liability caused when he suppressed exhibit 4 was only ¢2,250,292; he did not suppress any cheques, which totalled ¢33,582,329.13 and it was wrong for the bank to have held him liable for the suppression of cheques of that value. On these facts as found by CHRAJ, the decision was made that it was wrong for the GCB to have purported to dismiss the petitioner summarily. An order was made that the petitioner’s end of service benefits which had been frozen should be “unfrozen” and paid back to him “forthwith.” It was further ordered that the petitioner should be paid two years’ salary for

[p.535] of [2001-2002] 1 GLR 531 wrongful dismissal. It was when GCB failed or refused to comply with the decision by CHRAJ that it brought the present action in order to enforce its decisions.

It was contended by the GCB that CHRAJ erred in ruling that the petitioner did not suppress the cheques. This was because CHRAJ completely misunderstood the “twenty day rule” for the clearing of cheques. On the finding by CHRAJ that the petitioner suppressed only one cheque, the point was made that, that alone was enough to call for a disciplinary action to be taken against the petitioner. CHRAJ therefore erred in describing the dismissal of the petitioner as being unlawful. It was also said that it was wrong for CHRAJ to have awarded two years’ salary as damages for the petitioner. The GCB then submitted that the decision and order by CHRAJ were wrong; hence their refusal to comply with them.

A careful reading of the submissions as well as the affidavits by both parties in this application shows that there was no dispute that the GCB dismissed the petitioner from its employment for the reason that he suppressed some cheques and that this caused some financial loss to the bank. The suppression was caused when the petitioner refused or failed to return some cheques drawn on the bank by a customer when there were no funds in his account. According to the petitioner, he had 20 working days within which he could return those cheques and in fact but for the intervention of some inspectors, he would have done that. On the other hand, the GCB disputed the interpretation put on the 20 working days rule by the petitioner, which interpretation was manifestly accepted by CHRAJ. What then did the rule mean? This was, I think, one of the most important issues raised in this application.

This was a case involving bankers and rules of this nature must be interpreted according to the practice and usage among bankers. In other words, the rule must be interpreted according to how bankers have used or understood it among themselves. This could be ascertained from instructions issued by the bank from time to time. The GCB tendered a document containing the rules of instructions on the clearing of cheques. That document specified the number of days within which a bank could clear cheques it had received. I shall now set out the relevant portions of this document, which was a circular to

[p.536] of [2001-2002] 1 GLR 531 all area supervisors and branch managers and issued on 6 September 1990. It reads:

“CHEQUE CLEARING SYSTEM I write to inform you that at a meeting of the Bankers Clearing House held on 23 August 1990, members of the clearing house decided on the following schedule for clearance of cheques drawn on members of the house, effective 1 October 1990:

(1) Cheques submitted for clearing at the under-listed regional centres will be cleared ten working days after the date of lodgement to payee’s account:

Kumasi Ho Koforidua Cape Coast Takoradi Tamale Sunyani (2) Cheques submitted in Accra for clearing will be cleared one working day after date of lodgement to payee’s account.

(3) All cheques submitted for clearing at centres not mentioned above will be cleared twenty working days after date of lodgement to payee’s account.”

All addressees of this directive were asked to note the cheque-clearing schedule. Branches were also asked to ensure compliance with the above directives.

It is very clear from this document that these rules were meant for banks only. In other words, they were only for the banks to clear their cheques as they receive them. By these rules, a bank could reject a cheque that had stayed in the clearing system for more than twenty working days. That was in respect of cheques which were submitted for branches from outside Accra or those specified places. I also agree that by these rules, if a bank did not return a cheque within those number of days, then the receiving bank could presume that the cheque had been cleared. With regard to managers they were supposed to either reject or adopt a cheque by passing it through the customer’s account the very day the bank received it. They were not supposed to keep the cheques for even a day. That was especially so when the particular account had no funds in it; they were to return the cheque the

[p.537] of [2001-2002] 1 GLR 531 same day to the bank from where it was issued. No manager was expected to keep the cheque for a period of time beyond what had been agreed upon so that a customer could mobilize funds from elsewhere to improve upon the state of his account. The GCB made it clear that all cheques received must be lodged in the payee’s account. If a cheque was neither lodged nor returned to the issuing bank when it had no funds in it, it amounted to “suppressing” the cheque. That was so, otherwise many an unscrupulous customer would draw dud cheques on the banks. The twenty working-day rule was not fashioned out to throw a lifeline to an impecunious customer. It was not meant for managers to keep a cheque for so many days so that the so-called “good customers” could find money to wipe off their indebtedness to the bank.

I believe that the petitioner was very much aware of this rule and its meaning along these lines and that was why, according to him, he started to return the cheques to the drawers. The impression he created was that he would have returned the cheque to the customer had the inspectors not asked him to rather pass it through the customer’s account. When the inspectors asked him to do that they were only asking him to do what was expected of him when he received the cheques.

The question to ask is, if the petitioner honestly believed that he could keep the cheque for twenty working days, why did he start in the first place to return it to the customer by writing “rtd” on it, as he said he did? I believe that the petitioner knew that he was not supposed to keep a cheque for any period of time and that he had to return it when he received it and found that the customer had no money in his account. I believe that the interpretation put on the twenty working days rule by the petitioner was wrong for its effect would be that there could be no suppression of a cheque within the twenty days. It was also wrong for CHRAJ to accept that construction as being correct. Any decision based on this wrong interpretation must be wrong and must be held as such. All things considered, it was a monstrous idea that a customer could issue a cheque from one branch to be drawn on another branch, where he knew that he had no money and hope that he would be given twenty working days, ie four weeks in all, to get his account back in the blue. If that were to be allowed, how many banks

[p.538] of [2001-2002] 1 GLR 531 would be able to operate on sound commercial basis in this country? These are the sorts of dealings which go on in some of our commercial banks. The danger inherent in this practice is that when the cheque is not passed through the customer’s account so that it becomes an “unauthorised overdraft” (a term given by bankers), the banks are denied the chance to charge interest on those accounts.

There was another point made clear in the matter before CHRAJ. It was that the petitioner admitted having suppressed only one cheque, for his predecessor in office was responsible for the rest. Even if that were so, it would not mean a dismissal based on those grounds was wrongful. In other words, it is not necessary that an employee should be guilty of many breaches of rules governing his work before disciplinary action could be taken against him. Provided there was cause to discipline him, an isolated instance or ground was enough. It was equally untenable that someone else also broke the rules more than the petitioner did, or that what the petitioner did caused far less financial loss to the bank than what another person’s breach of the rule caused. Also, it was unacceptable that the petitioner’s breaches caused only a very little loss to the bank. The magnitude of the loss had no bearing on the wrongfulness or otherwise of a dismissal. They may be useful for other considerations.

The sum total of the above is that the totality of the facts put before CHRAJ revealed that the petitioner broke the rules of the bank on what to do when a customer drew a cheque on a bank when he did not have sufficient money in his account. In such a situation the receiving bank had the duty to return the cheque to the issuing bank; he did not have to keep the cheques for any period of time. The rule which allowed a cheque to be kept for twenty working days was to enable the banks to clear the cheque drawn by a customer. It was not meant for customers to be given time to put money in their accounts. Upon no reasonable grounds therefore could the petitioner’s conduct be justified. The GCB was therefore right in dismissing the petitioner. On the facts of this case, the dismissal of the petitioner from its employment was justified. On the other hand, the decision by CHRAJ, with the greatest respect, was wrong.

The dismissal by the GCB having been found to be justified under the circumstances, I do not think that it would be wrong to say that the

[p.539] of [2001-2002] 1 GLR 531

GCB had the power to mete out whatever punishment it thought fit according to the situation. It has not been the case for the petitioner that the GCB did not have the power to discipline him in the manner in which he was punished. The harshness of the punishment per se did not make it wrongful. There was nothing unlawful about it. If the petitioner thought his punishment was harsh he could take such steps as were permissible in the outfit of the GCB, like the collective agreement, if there was any applicable to him, his working conditions, or the terms of employment with the GCB. I do not think the GCB was not justified in denying the petitioner of his benefits. The discretion was for the GCB to exercise one way or the other. None could fault it for having chosen one option open to it. That was irrespective of how harsh or unpalatable the person found it to be.

I do not think CHRAJ was right in deciding that the dismissal of the petitioner was wrong. I also believe that it would be wrong to find any problem with the sort of punishment the GCB dished out to the petitioner. This court, therefore, is unable to find any support for the decision CHRAJ gave in this case. In the result, I find myself unable to grant the application before me. I dismiss the application.

Application dismissed.

DRKS