Corporate Liability

Corporate Liability

This discussion focuses on the concept of corporate civil

and criminal liability.

It discusses issues arising out of the actions of corporate

organisations in the light of legislations and decided cases.
 Civil & Criminal Liabilities

 Tax (Corporate Tax, Withholding Tax, Service Tax, VAT)

 Workplace (Employee rights, PAYE, Pension-Tier 1&2)
 3rd Parties (Occupiers liability, Product liability &Vicarious liability)
 Health Safety & Environment
 Bribery & Corruption
 Money Laundering
 Economic & Organised Crime
 Terrorism
 Examples of Laws Creating Liabilities
 The 1992 Constitution
 Anti-Money Laundering Act, 2008 (Act 749)
 Anti-Money Laundering Regulations, 2011, (LI 1987) and the
 Anti-Terrorism Act, 2008, (Act 762)
 Anti-Terrorism Amendment Act, 2012 (Act 842)
 Anti-Terrorism Regulation (LI 2181)
 Criminal Offences Act, 1960 (Act 29)
 Criminal Offences Amendment Act, 2012 (Act 849)
 The Factories, Offices and Shops Act 328, 1970
 Workmen’s Compensation Law 1987, PNDC Law 187
 ILO Conventions
 Examples of Laws Creating Liabilities

 The Economic and Organised Crime Office Act, 2010 (Act 804)
 The Economic and Organised Crime Office Regulations, 2012 (LI 2183)
 Companies Act, 1963 (Act 179)
 Foreign Exchange, Act 2006 (Act 723)
 Whistleblower Act, 2006 (Act 720)
 Labour Act, 2005 (Act 651)
 Labour Regulations
 Environmental Protection Act, 1994 (Act 490)
 Industry Specific Legislations
 Object of Legal Framework

Creates responsibilities & Duties

Provides for actions or inactions constituting Breaches
Specifies Remedies
Provides for Civil & Criminal Liabilities & Prosecutions
 Workplace (Employee rights, Pension-Tier 1&2)

General Corporate Responsibility

Corporate Organisations are both legally and morally
responsible for ensuring that the rights of employees are not
violated. Such rights include:

 
 Workplace (Employee rights, Pension-Tier 1&2)

Employee Rights
Deduction and Payment of Pension Contributions
Maternity & Holiday Pay, etc
Annual Leave & Statutory Holiday with Pay
Employment Protection Rights.
(Unfair dismissal & Redundancy pay etc.)
 
Workplace (Employee rights, Pension-Tier 1&2)

Employee Rights Contd.

 Payment of Tax (PAYE)
 Employer’s liability for torts committed by employees against
third parties (Vicarious Liability).
 Protection from Risk of Personal Injury
(Employer’s Duty of Care for Employees).
 Pension (Tier 1 & 2)

See Lane v Shire Roofing Co (Oxford) Ltd [1995] IRLR 493, CA or [1995] EWCA Civ 37
Workplace (Employee rights, Pension-Tier 1&2)

 To receive equal pay for work of equal value without distinction

of any kind;
 To have rest, leisure and reasonable limitation of working
hours;
 To form or join a trade union; (See also Section 14)
 To be trained and retrained for the development of his or her
skills; and
 To receive information relevant to his or her work.
 To work under satisfactory, safe and healthy conditions;
Consequences for Violating Employee Rights

 In the event of a violation of employment rights of workers,

such as in cases of unfair termination or redundancy, workers
have under sections 63, 64, and 65 of Act 651, been given a
remedy at law.

 A corporate body could also be prosecuted for violating

certain employee rights.
Eg. Failing to deduct and contribute towards employees’
Pension Tier 1 or 2, etc.
Remedies for Rights Violations

 Compensation
 Re-instatement or Re-Employment
 Severance or Redundancy Pay
 Certiorari to quash the termination or dismissal.
Health, Safety & Environment

Dompoase mine collapse in Nov. 12,

2009 – W/R
 Health, Safety & Environment

 Corporate Responsibility
 Corporate organisations are required to maintain health
and safety at the work place & whilst carrying out their
duties outside the workplace.

 This responsibility is backed by law and a breach would

attract the relevant sanctions.
 Legal Requirement to Maintain Health, Safety & Environment

 Satisfactory, safe and healthy conditions for workers;

 Safe plant and system with no risk to health;
 Safe and risk free handling, storage and transportation of
articles and substances;
 Necessary information, instructions, training and
supervision to ensure health and safety at work;
Organisations' Legal Requirement to Maintain Health
& Safety

 Prevent contamination of the workplace (toxic

gases, noxious substances, vapours, dust,
fumes, mists etc.)
 Separate, sufficient, suitable and adequate
toilet and washing facilities for males and
females;
 Prevent accidents and injury to health by
minimizing the causes of hazards
 Legal Requirement to Maintain Health &
Safety

 Consequence of Breach
• Its an offence and liable upon summary conviction to a
fine or a term of imprisonment to breach any of the above.

• Employer must report occupational accidents and

diseases to the relevant government agency (Chief Labour
Officer or the Inspector of Factories) .

 See sections 118 – 121 of Act 651 and reg. 18 & 19 LI 1833
Workers Duties and Rights : Health and
Safety

 Use of Safety Appliances

 To use the safety appliances, fire-fighting
equipment and personal protective
equipment in compliance with the
employer's instructions;

 An employer would not be liable should a

worker fail to comply with the above,
Workers Duties and Rights : Health and Safety

 Exposure to Imminent Hazards

• Worker must report to Employer/Supervisor

when he reasonably believes he’s being exposed to
hazards or danger to his life, health or safety.

• He must remove himself from the danger

• Employer shall not require worker to return

when the danger is still in existence

• Employer shall not dismiss, terminate or

withhold worker’s wages in that event.
 Cases

 Whether an Employer would be liable for injuries sustained by

a Worker at the workplace?

 Whether an Employer can transfer his Duties to an Agent?

Kuni v. State Gold Mining Corporation and Another [1978] GLR
205-211

 Facts:

 The plaintiff, an employee of the Prestea Goldfields Ltd.,

a subsidiary of the State Gold Mining Corporation,
sustained serious injuries when a mass of loose graphite
rocks fell on him whilst working underground at the
mines. 

 He brought the present action against both the State

Gold Mining Corporation and the Prestea Goldfields
Ltd. for damages. 
Kuni v. State Gold Mining Corporation and Another [1978] GLR 205-211

 Held

 Where a person was authorised by statute or bound by

contract to do a particular work, he could not escape
responsibility by contracting with another person to do it.
 
 It was clear that the plaintiff was seriously injured whilst
he was resting near the footwall side of the stope drive
after shoveling. 
 Kuni v. State Gold Mining Corporation and
Another
 This area did not appear to have been effectively barred
down of loose or loosened rocks by the senior headman. 

 The responsibility of the agent was that of the

employer, and the State Gold Mining Corporation was to
be held liable for the negligence of the mines manager
of Prestsa Goldfields Ltd. which resulted in the injuries
suffered by the plaintiff
 Moshie v. State Gold Mining Corporation   [1968] GLR 944,
Annan J.
Employer’s Duty to Provide Safe System of Work and
Competent Fellow Workmen.

•The plaintiff was the headman of labourers in the

defendants' employment. His right hand got crushed whilst
loading a pontoon in the usual course of his employment

•He claimed damages for personal injuries arising from the

employer‘s failure to provide competent workmen, a safe
system of work and failure to fence a dangerous machine.
 Moshie v. State Gold Mining Corporation   [1968] GLR
 Held: 944, Annan J.

 the Employer’s workmen were negligent in the performance of

their duties;

 the Employer’s were negligent in that their system of work in

respect of the work done by the plaintiff was not safe. 

 The machine in which the plaintiff's hand was caught was a

dangerous one which should have been fenced. 

 There was a statutory duty on the defendants to anticipate the

kind of accident which had happened and to fence the
machinery in that area.
 Issah v. Mim Timber Co. Ltd [1980] GLR 430

• The Plaintiff was employed to fell trees. He got injured

whilst felling a tall tree.

• He sued the employer for:

 Failing to ensure that a proper warning was given as to the
direction in which the tree was falling; and
 Breach of the employer’s duty to provide a safe system of
work.
 Issah v. Mim Timber Co. Ltd [1980] GLR 430

Holding:
 The law places a high duty of care on the employer towards
his servants.

An employer owes a duty to his employees to take reasonable

care for their safety in the course of their operation.
 Issah v. Mim Timber Co. Ltd [1980] GLR 430

These duties include:

 duty to provide competent fellow workmen
 duty to provide adequate material and
 duty to provide a proper system of work and
 effective supervision.
Employer’s Duty of Care

 It has also been held that:

If an employer employs a practical joker
whose jokes cause injury, the employer would
be in breach.
 Duty Owed to Persons Other than Employees

• Organisations' must conduct their undertakings in such

a reasonable manner so as not to injure or expose
persons not in their employment but who may be affected,
or exposed to risks to their health and safety.

• It is the duty of Organisations' to provide prescribed

information and protective measures to such persons
so as not to expose them to risks to their health and safety.
Environmental & Health Hazards

 Corporate Responsibility
Protect the Environment and Prevent Health Hazards

• The Ghanaian laws make specific provisions for the

protection of the environment and prevention of health
hazards.

• The Body responsible for protecting the environment in

Ghana is the Environmental Protection Agency,
established by the EPA Act, 1994 (Act 490).
 Environmental & Health Hazards

 Environmental Pollution

 EPA empowered to issue environmental permits and

pollution abatement notices to:
• control the volume,
• types,
• constituents and
• effects of waste discharges, emissions, deposits or
• Other source of pollutants and of substances which are
hazardous or potentially dangerous to the quality of the
environment or any segment of the environment;
 Environmental & Health Hazards

 Volume, Intensity and Quality of Noise in the

Environment.

 To issue notice in the form of directives, procedures

or warnings to such bodies as it may determine for the
purpose of controlling the volume, intensity and
quality of noise in the environment.
Environmental & Health Hazards

 Enforcement Notices by EPA

In performing its duties, the EPA, may issue and

serve enforcement notices, on persons
responsible for the undertaking where it
appears to it that:

 the activities of any undertaking poses a

serious threat to the environment or
 to public health
 Environmental & Health Hazards

 Offence = Non-Compliance with Enforcement Notice or

Permit

It is worth noting that the law makes it an offence

punishable upon summary conviction to a fine and in
default to a term of imprisonment for failing to comply
with an enforcement notice or permit issued by the EPA.
TAX
Offences by Bodies of Persons under the Law

 Consequences of an Offence Committed by a Body of

Persons

• Body Corporate (Other than a Partnership)

The Body corporate and each director or officers of the
body shall also be considered to have committed the
offence.

• Partnership
All partners shall be deemed to have committed the offence.
Case Study
Cyanide Spillage By Newmont, Ghana

On 8 October 2009 an overflow of sodium cyanide

process solution occurred at the company’s Ahafo
gold mine processing plant site after a pond-level
instrument malfunction, resulting in water
pollution and death of a number of fish.

A report by the EPA showed that the company

breached their environmental permits published
on 25 April 2005.
 
 Cyanide Spillage By Newmont, Ghana
The Ghanaian Ministerial Panel, which evaluated the accident, has
requested the company to pay an amount for its inability to
prevent, report and investigate the mishap in an appropriate and
timely manner.

According to the Ghanaian Ministerial Panel report, the company

was liable to pay compensation for:

 simultaneously running several water ponds

failing to inform the regulatory agencies and communities in good
time
Absence of preventive measures, amongst others
 Cyanide Spillage By Newmont, Ghana
Newmont was fined $4.9m in compensation for the cyanide
spill.

The compensation was to be shared amongst:

 the affected communities
 the Ghanaian Environmental Protection Agency (EPA), and
the Inspectorate Division of the Minerals Commission,
which suffered most from damage to the environment.
Reasons for the Fine

 the company must be directed to pay a fine for

violating certain provisions of the
environmental permit, deliberately holding
information on the spill from EPA, till 10th
October 2009, 3 days after the incident.

 The fine must be deterrent in nature to the

company and other players of the industry.
Other Remedies for the Breach

• The company must provide permanent, portable and

adequate water for communities affected by the spill.

• It must submit to the agency its emergency response

procedures and incident classification criteria for review.

• Comprehensive studies on soil and all sediment within

the operational area must be conducted to trace the high
sources of the metal concentration.
 Question
• Bentum Oil Ltd is a big oil mining company operating on the
shores of a fishing coastal village for the past three years. Due
to some unexplained reasons there appear to be frequent oil
spillage along the coast and even on the high seas resulting in
huge losses in the fishing business and rendering over 90% of
the community workforce jobless.

• Children living in the village appear to be showing signs of

stunted growth and unexplained diseases.

• Some site engineers have also been complaining of having

difficulty in breathing.
Question

• As a consultant to Bentum Oil Ltd, you have

been approached by the Board of Directors to
find a permanent and efficient solution to
these problems.

• Advise Bentum Oil Ltd on its liabilities,

indicating any implications for CSR.
 Case Studies

 Organisations'' duties - Provisions of safe system of working -

Failure of Organisations' to remedy known defects in machine - Industrial
accident - Whether employer was in breach of his common law duty to
provide proper machinery   Ekem v. Wiseway Cleaners Ltd   [1981] GLR
801, Twumasi.

 Organisations'' duties - Provision of adequate training and

supervision - Employee fatally injured while operating dangerous
machine - Claim against employer for negligence and breach of statutory
duty to provide adequate training and supervision - Failure of plaintiff to
lead evidence to establish breach of statutory duties - Nature and scope of
Organisations'' duties to provide training and supervision - Factories,
Offices and Shops Act, 1970 (Act 328), s. 36   Ekem v. Wiseway Cleaners
Ltd   [1981] GLR  801, Twumasi J.
Case Studies

 Fencing - Unguarded electric saw-machine - Whether

dangerous machine - Whether risk of injury in using
unguarded saw-machine reasonably foreseeable - Meaning
of "dangerous” - Factories, Offices and Shops Act, 1970
(Act 328), s. 38 (1)   Nelson v. Mensah   [1976] 1 GLR 178,
Edusei J.
 Food & Drugs
Project Work

 Considering the sale of various unwholesome and expired goods

and drugs being sold in our markets, it can be concluded that the
Food and Drugs laws of Ghana has failed to achieve its purpose.

 Discuss
 Ghana Standards Authority
Project Work

 The Ghana Standards Authority is an institutions created and existing in the

Ghanaian statute books only. It has no force in the export market and has
been unable to maintain international standards.
 How true is this statement?