Supreme Court Defines Limits of "Public Service," Denies Enhanced Pension to Former State Attorney

In a significant judgment for the civil service and state-owned enterprises, the Supreme Court has clarified the constitutional definition of "Public Service," ruling that employment in state companies converted into commercial ventures does not count toward specialized public service pension requirements.

The case, Sylvester Kow Williams v. The Attorney-General, was initiated by a former Chief State Attorney who sought a declaration that his 14-year tenure with Ghana Telecommunications Company Limited (Ghana Telecom) constituted public service for the purpose of calculating his retirement benefits.

The dispute arose in April 2022 when the Controller and Accountant General’s Department halted the plaintiff’s monthly pension payments. The government argued that Mr Williams, despite a career spanning over 31 years, only recorded approximately 16 years of actual "public service"—falling short of the mandatory 20-year requirement stipulated under Article 155(1)(b) of the 1992 Constitution for lawyers in the Legal Service to retire on their full consolidated salary.

Mr Williams contended that because the Government of Ghana remained the sole shareholder of Ghana Telecom following its 1995 conversion into a company limited by shares, it remained a "public service" entity until private shares were sold to Vodafone in 2008.

The Plaintiff invited the Court to adopt the purposive interpretation since the literalist approach to interpret what is a commercial venture was likely to produce very unpalatable and absurd consequences. Citing examples of Public Service institutions as the Judicial Service, the District Assemblies and Health Service, he argued that those institutions charge fees for services rendered. Yet, those institutions charging fees per se do not make them commercial ventures in the eyes of Article 190(1)(b) of the 1992 Constitution.

The Supreme Court, in a judgment authored by Justice Mensah, rejected the "Commercial Venture" Test argument. The Court held that the legal status of an entity is determined by its "pith and substance" and the statutes governing it, rather than just its shareholding.

The Court ruled that the Statutory Corporation (Conversion to Companies) Act, 1993 (Act 461) fundamentally changed the corporate spirit of the Telecommunications Division of the erstwhile Posts & Telecommunications Corporation. By converting the corporation into a successor company under the Companies Code, the state intended for it to operate as a commercial venture.

The Court further stated that the position of the law remains steady and firm that in construing a statute, it is legitimate for the court to refer to an earlier decision of a court that has pronounced on and or given judicial interpretation to some provisions of the Act in question, as a guide. Put differently, when a court is faced with a provision in an enactment that has already been authoritatively interpreted upon, it is legitimate for the previous decision to be followed to ensure consistency and predictability. 

The Court referred to the case of Irene Tettey-Enyo v Electricity Company of Ghana Ltd, Civil Motion No. J7/02/2023 dated 26/04/2023 (unreported)  where the Supreme Court was called upon to review the decision of the ordinary bench. The main issue turned essentially on whether upon coming into force of Act 461, the Electricity Company of Ghana Ltd continued to be part of the Public Service. 

In that case, the Court held that Act 461 operated to turn Electricity Company of Ghana Ltd and other State owned enterprises listed in the Schedule from public corporations simpliciter to commercial ventures owned by the State. By this change, the specified State owned enterprises are required by law, annually, to prepare profit and loss accounts and whenever dividend is declared by the board of directors, to pay it to the Government as the shareholder. 

The Court further held that these requirements are clear indications that such enterprises are intended by the State to operate as a commercial venture and to make profit. Upon a true and proper interpretation of the provisions of the statutes that apply to the stated enterprises, such enterprises were set up as commercial ventures and do not form part of the Public Services of Ghana under article 190 of the Constitution.

Under Article 190(4) of the 1992 Constitution, public corporations set up as commercial ventures are explicitly excluded from the "Public Services of Ghana". Therefore, the Court found that Ghana Telecom ceased to be part of the public service on June 16, 1995, meaning any service Mr Williams provided after that date could not be credited toward his public service pension.

The Court also addressed the status of the two-year extension Mr Williams served after attaining the mandatory retirement age of 60. Mr Williams argued that this period should be included in his contributory years, potentially pushing him past the 20-year mark.

However, the Court held that a legal officer granted additional years of service is deemed to have retired on their original due date, and the extension period does not count as pensionable service. This follows established precedents that a "stay over" by a retired officer does not constitute a continuation of the original pensionable employment.

In referring to the case of Wuaku v Attorney General & anr [1994-95] 1 GBR 262 and Osei Hwere v Attorney General [1994-95] 1 GBR 261, the plaintiff urged the Court to hold that having retired as a Chief State Attorney and granted an extension, he was deemed to have retired at the end of the extended period.

The Court held, contrary to the plaintiff’s contention, that the period of extension granted him does not count as pensionable service for the purpose of calculating the plaintiff's retiring benefits. The Court applied the ruling inWuaku v Attorney General & anr where it was held that the six (6) months stay over by a retired judge under Section 1(2) of PNDCL 161 to deliver his outstanding judgments did not count as pensionable service.

Furthermore, the Court held that upon a true and proper interpretation of Regulation 91(1)(b) of the Legal Service Regulations, 2014 (LI 2210), a legal officer employed in the Legal Service who is granted additional years of service after attaining the age of sixty (60) years shall not be deemed to have retired at the end of the extended period but on the due retiring date.

This ruling reinforces the dissolution of the old statutory corporation model in favour of profit-oriented state companies. It serves as a stern reminder to employees of state-owned enterprises that the conversion of their employers into limited liability companies has profound implications for their constitutional pension rights.

"The eligibility criteria for pension under Article 155(1)(b) are strict and unambiguous," the Court concluded, ultimately dismissing Mr Williams’ suit and declaring the cessation of his pension payments lawful and constitutional.