When an employee is unlawfully dismissed, the employer may owe compensation. But how much? For how long? And does the number of children the employee has matter?
These were the questions that travelled from the High Court all the way to the Supreme Court in the case of Moses Okrah v. Agricultural Development Bank. At the heart of it was an employee who had served for 13 years and felt he had been unfairly removed and deserved more than just an apology.
The courts didn’t all agree. But by the time the Supreme Court spoke, some important principles had been clarified, especially on how damages in wrongful dismissal cases are calculated, and what the courts would not consider when awarding compensation.
Case Background: Summary Dismissal of Moses Okrah
Moses Okrah had worked with the Agricultural Development Bank (ADB) for over thirteen years when he was summarily dismissed in April 1999. The bank offered no notice and no benefits. He challenged the dismissal in court, claiming it was wrongful and that he was entitled to compensation.
Not long after he sued the bank, criminal charges were brought against him at the instance of his former employer. Those charges, however, were eventually struck out for not being effectively prosecuted. Mr. Okrah argued that the criminal case was an attempt to frustrate his civil action.
Despite the turmoil, he found alternative employment as a trader. He maintained that although he moved on, he was still entitled to damages for the abrupt and unlawful termination of his job.
Decision of the High Court: Dismissal was Wrongful so Damages Must be Awarded
The High Court agreed with Mr. Okrah that his dismissal was wrongful. And it awarded him compensation on several fronts. These included:
- Loss of salary and allowances from the date of dismissal to the day of the court’s judgement.
- Three months’ salary in lieu of proper notice of dismissal.
- SSNIT arrears and provident fund contributions.
- GHS 30,000 for prospective loss of employment.
- Interest on the total sum at the prevailing bank rate.
- All end of service benefits Mr Okrah was entitled to.
In making these awards, the trial judge considered not only the legal loss but also the fact that Mr. Okrah had four children and had suffered a failed criminal prosecution at the instance of his employer.
Appeal by ADB at the Court of Appeal
ADB appealed, not against the finding that the dismissal was wrongful, but against the size of the damages. The Court of Appeal agreed that the awards were excessive and had been influenced by irrelevant factors, such as the number of children and criminal charges that had not resulted in a conviction.
It therefore reduced the damages significantly. It ruled, among other things, that Mr. Okrah was to receive only 15 months’ salary and allowances and, also the SSNIT and provident fund contributions were limited to those same 15 months.
Final Appeal at the Supreme Court by Mr Okrah
Mr. Okrah wasn’t satisfied. He argued that the reduced damages didn’t reflect the realities, especially since ADB had delayed the trial for years. He asked the Supreme Court to restore the higher compensation and base it on the current salaries of ADB staff holding similar positions. But the Supreme Court declined both to reinstate the earlier amount and to tie the payment to current salary levels of similar workers.
In a unanimous decision, the Court upheld the 15-month salary award as fair, noting that Mr. Okrah had testified that he found alternative work as a trader within a year of being dismissed, meaning he had mitigated his loss.
The Court also:
- Restored the three months’ salary in lieu of notice, affirming that there was an abrupt termination of an over-a-decade relationship. So the three months’ salary was fair.
- Confirmed that the SSNIT contributions must be paid to SSNIT, not to the plaintiff directly.
- Ordered that all other entitlements under his contract such as leave, bonuses, and long-service benefits must be paid for the 15-month period, using the salary structure that was in place at the bank when he was dismissed.
- Reinstated interest on the amount due, calculated from the date of the High Court judgment.
Lessons From the Case
1. Wrongful dismissal is a breach of contract, not a personal injury: You can get compensation, but it’s based on the pay you should have received, not on your emotional pain.
2. Compensation is only given for a reasonable time it would take to find a new job: The court won’t give you 10 years of salary. Usually, getting paid for one to two years is seen as fair, depending on your job and how hard it is to find new work.
3. You must try to mitigate your losses: If you found another job or started a business soon after the dismissal, the compensation will reflect that.
4. You don’t get paid based on current salaries: Unless a law expressly says otherwise, your compensation will be based on what you were earning at the time of your dismissal, not what people in that role earn today.
5. You can still claim benefits under your original contract: Even after dismissal, you are entitled to whatever earnings and allowances you were due under your contract, for the limited compensation period.
Final Word
This case shows how far the law has come in balancing fairness with principle. Yes, employees must be protected from unjust treatment, but compensation must still be reasonable, lawful, and based on contract.
As the Court made clear, the compensation owed to a wrongfully dismissed employee is not meant to reflect every hardship suffered, but only those losses that arise naturally from the dismissal, or were within the reasonable contemplation of both parties when the employment contract was made. The law does not ignore injustice, but it also does not pay for every misfortune. It simply restores, within reason, what was lost.
