ON THE SUBJECT OF EX- GRATIA: IS OUR CASE IN GHANA REALLY EX- GRATIA?

 I must first establish that this piece is no way linked to any recent happenings, the reason for which it stayed away from being specific on any instances of ‘ex gratia’ payments made to any specific individuals.

I will pick two definitions for the term ex gratia which has become a term we visit as a country at least once every four years. The Cambridge online dictionary describes an ex gratia as a payment that is not necessary, especially legally, but is made to show good intentions. The Hansard archive cited in the same Cambridge online dictionary states that “An ex gratia payment is one made where no legal liability to pay exists” . The second definition is drawn from the Collins online English dictionary which states that “An ex gratia payment is one that is given as a favour or gift and not because it is legally necessary”.

In their strict definitions, when payment is considered as an ex gratia, it means payments outside the defined remuneration to someone. It is free money given either as compensation, or as an appreciation for some work done over a period.

When people hold this definition true in all cases, it becomes difficult to sway their thoughts on something else. In our case in Ghana, what is termed ex gratia can be gathered to mean salary arrears plus pension.

From my understanding, Article 71 has some many things that needs explaining. It is up to us as citizens to decide whether or not to maintain Article 71 of the 1992 Constitution in its form. We must first decide to continue to:

(a) Pay pensions to Article 71 office holders who have served their entire 4 year term in our case.

(b) Allow salary arrears to accumulate to be paid as a lump sum after 4 years of office by Article 71 office holders.

What pertains in the case of the salary arrears which forms part of what we define as ex gratia, is that, upon assumption of office, the new government must take efforts to decide on the salaries and emoluments of Article 71 office holders. Committees are thus established to look into the conditions of service of these office holders long after they have taken office. So for instance, if a Committee on Emoluments is constituted in the final year of an administration to determine the salaries and emoluments that should be paid to office holders who ought to have been paid the salaries they are to determine in their 4th year at the time they took office, that automatically generates arrears in the salaries due the individuals which must therefore be paid.

To be practical, if the President constitutes an Emoluments Committee say in the year 2020 to determine the salaries and emoluments of office holders who took office in his administration in 2017, that automatically generates a problem for the public purse.

So, let’s take for instance, a minister in the Mahama administration took home a salary per month of say Ghc10,000.00 and gets inherited by a minister in the Akufo-Addo’s administration and is to take home after the Committee on Emoluments determine his salary from 2017 to be se Ghc15,000.00. If this salary of Ghc15,000.00 for a minister under President Akufo-Addo is determined in his 4th year in office, it means that already, the state owes this minister Ghc5,000.00 for every month in office which automatically places him to receive Ghc5,000.00 for 48 months being his salary in arrears.

In this scenario, Ghc5,000.00 by 48 months, being 4 years in office, stands at Ghc240,000.00. If this money is paid to the person after 4 years in office, does that make this payment illegal? No! But this cannot be termed ex gratia. Giving it the nomenclature ex gratia, automatically places this payment in the realm of problems because it would have meant this payment was for benevolence on the part of the state and not necessarily for any work done. Unfortunately, in this scenario, it is payment for work done for which we underpaid at the time the work was being done, and that we only rectified it after the work was done.

In the second instance, after serving in office for 4 years, the Presidential Emoluments Committee that is established to look into how best Article 71 office holders could be compensated for their service to the state, then sits and decide that for instance, having rectified the true salaries that needs to be paid an office holder, which is elaborated above, let us propose that for every year in office, three months of the person’s salary is calculated and paid as pension for each year served. So, in the case of the minister as stated above, let’s say he served in office for 4 years and was due to take home Ghc15,000.00 per month.

The emoluments committee could propose that the state pays this minister three months of this salary as pension per each year served. This means for every year, this minister would benefit from a pension of Ghc15,000.00 by 3 (15,000.00×3=Ghc45,000.00). for every year, the pension due this minister is Ghc45,000.00 by the number of years served which in this case is 4 years making this calculation, Gha45,000.00 by 4 (45,000.00×4=Ghc180,000.00). This means that at the end of the deliberations, Ghc180,000.00 which is pensions proposed by the Committee on Emoluments, is paid in addition to the salary arrears of Ghc240,000.000 is paid to the minister making it Ghc420,000.000 (combination of salary arrears and pensions). From my understanding, this payment is tax deductible of between 25% and 30%.

In its true sense, we can classify the pensions of Ghc180,000.00 as ex gratia if we so decide. But the component of salary arrears which is Ghc240,000.00 in the scenario created, cannot be classified as ex gratia because these are not discretionary payments.

It is possible to therefore debate two things: (a) the need for pensions for Article 71 office holders and (b) the factors that goes into determining the amount to be paid as pension. Issues of pension payments are matters of law, and it may be difficult to switch a debate to exclude pensions of individuals who serve in public office. Our strongest bargain may be on what goes into it, in a manner that does not disadvantage the public purse.

We can find a solution in dealing with the first instance of salary arrears which are paid.

First, we can decide as a nation that in the first term of every government, all officials must be paid salaries as those taken by officials of the previous administration. This is because, the conditions and standards of living may not necessarily vary significantly to warrant any significant adjustment in the conditions of service of Article 71 office holders.

Second, while at that, the ensuing administration, we can collectively decide that, must, within the 4th month, constitute an Emoluments Committee to determine within three months, the salaries that must be paid Article 71 office holders which shall be effective the second year in office of the administration.

We can also say that this should be done in the last year of the existing administration so that we can be sure of taking away biases in rewarding members of a current government. This way, we can take away the constant revisit to this contentious matters.

As to the issue of pensions, I have stated that it remains a matter of law, and we must together see how best to satisfy that legal imperative.