Govt Can’t Sack CEOs – Supreme Court Declares

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The removal of heads of public corporations as a result of a change of government has been declared as unconstitutional by the Supreme Court.

In a unanimous decision, a seven-member panel of the court, presided over by the Chief Justice, Justice Sophia Akuffo, held that per Article 190 Clause 1(b) of the 1992 Constitution, public corporations were part of the Public Services of Ghana and, therefore, such persons were public service officers whose appointments were protected by the Constitution.

According to the court, the appointments of such public service officers were governed by Article 195 of the Constitution.

The removal of such public service officers, the court held, must, therefore, be done in accordance with the terms and conditions of their contract of engagement or it must be justified, as stipulated in Article 191 of the Constitution.

Article 195 Clause 1 of the Constitution gives the President of the Republic the power to appoint public service officers, but with the advice of the governing board of the specific corporation, “given in consultation with the Public Services Commission”.

Article 191 (b) states: “A member of the public service shall not be dismissed or removed from office or reduced in rank or otherwise punished without a just cause.”

Import of the decision

By this decision, the Supreme Court has repealed the section of the Presidential (Transition) Act 2012 (Act 845) which terminated the appointments of the chief executives or director-generals of public corporations, statutory boards and authorities upon the assumption of office of a new President.

“To the extent that Section 14 of the Presidential (Transition) Act 2012 (Act 845) requires the chief executives or director-general (however described) of public boards or corporations to cease to hold office upon the assumption of office by a person elected as President of the Republic of Ghana, the same is hereby declared to be unconstitutional and void for being in contravention of articles 190 and 191 of the Constitution,” the court held.

The unanimous decision of the court was read by Justice Professor Nii Ashie Kotey, while the other members on the panel were Justices Jones Dotse, Sule Gbadegbe, Anthony A. Benin, Samuel K. Marful-Sau and Nene Amegatcher.

Legal challenge

The case culminating in the Supreme Court’s judgment was initiated on January 4, 2017, by a legal practitioner, Mr Theophilus Donkor, who invoked the original jurisdiction of the court to interpret the 1992 Constitution.

Counsel for the plaintiff was Mr Godwin Edudzi Tamakloe.

It was the contention of the plaintiff that the practice whereby CEOs, director-generals and heads of public corporations, statutory boards and authorities, as well as the governing boards of such institutions, must step aside during a change of government was unconstitutional.

He sought the following reliefs:

A declaration that the removal from office of such chief executives, chief executive officers, director-generals (howsoever called) and members of governing boards of public corporations merely on account of the assumption of office of the person elected as President “does not amount to a just cause and is accordingly unconstitutional”;

Second, a declaration that to the extent that Section 14 of the Presidential (Transition) Act 2012 (Act 845) requires all chief executives, chief executive officers, director-generals (howsoever called) and members of governing boards of public corporations to cease to hold office merely on account of the assumption of office of the person elected as President, the said Section 14 is unconstitutional as being inconsistent with the letter and spirit of the Constitution, particularly articles 70(1)(d)(iii), 190 and/or 191(b) of the Constitution;

Third, an order of perpetual injunction restraining any person or authority from removing from office such chief executives, chief executive officers, director-generals (howsoever called) and members of governing boards of public corporations merely on account of the assumption of office of the person elected as President.

Board members can be removed

The court, however, dismissed the plaintiff’s relief with regard to the members of the governing boards of public corporations appointed by the President, in accordance with Article 70 Clause 1 (d) (iii).

According to the court, the board members appointed by the President could be removed upon the election of a new President because they were not public service officers.

“Members of governing boards of statutory boards and corporations appointed in accordance with Article 70(1)(d)(iii) of the Constitution are not members of the Public Service and their tenure is not governed by articles 191 and 195 of the Constitution. Therefore, each person may be removed at will by the President. We declare accordingly,” the court held.

Article 70 Clause 1(d)(iii) of the Constitution states: “The President shall, acting in consultation with the Council of State, appoint the governing boards of public corporations.”

Public corporations

The judgment by the Supreme Court affects all public corporations under Article 190 Clause 1(b) of the 1992 Constitution. These are public corporations not set up for commercial ventures.

They include the National Petroleum Authority, the Forestry Commission, the National Communications Authority, the Securities and Exchange Commission, the Petroleum Commission and the National Pensions Regulatory Authority.

Limited liability companies

The Supreme Court further made a pronouncement on state enterprises set up for commercial ventures, such as the GCB Bank, the Agricultural Development Bank, the Ghana Oil Limited, the State Housing Company and the National Investment Bank Limited.

It held that although such companies were not public corporations under Article 190 Clause 1(b) of the Constitution, both their heads and their governing boards could not be removed on the assumption of office of a new President.

“These are not statutory boards or corporations. They are limited liability companies incorporated under the Companies Act, 1963 (Act 179). Some are listed on the Ghana Stock Exchange. Upon purposive interpretation of Section 14 of Act 845, we hold that members of the governing boards of these companies and chief executives are not affected by Section 14 of Act 845. Members of the boards and chief executives of such companies shall only be removed in accordance with the articles of incorporation of the company and the Companies Act, 1963 (Act 179),” the court held.

By: Graphic.com.gh