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Can an employee establish same business as an employer?

Can an employee establish same business as an employer?

Dear Mirror Lawyer, Is it permissible for a worker employed in an organisation to privately establish the same business and run it in his spare time to supplement his income?



Erasmus Ofei, Tema.


Dear Erasmus, I am aware that in Ghana, Some employees deliberately or out of ignorance are conflicted in their employment. They set up their own private businesses that compete with their employers' businesses.

 Notable among them are employees in the motor companies, caterers, teachers, medical doctors (Locum), advertising personnel employed in advertising companies, accountants and many other professionals. In local parlance, this is also called “galamsey.”

These acts constitute a serious breach of the fiduciary relationship between the employer and employee if the approval of the employer is not sought. A worker, once employed, is expected to devote his full-time attention to the business of his employer. Section 11 of the Labour Act, 2003, Act 651, recognises this obligation. It provides that the worker is to work conscientiously in the lawfully chosen occupation and to protect the interest of the employer.

 A worker therefore is under an obligation to serve his master in good faith and with fidelity. Though he has the right to use his spare time in a lawful manner to increase his earnings or social standing in society, this must be done in accordance with the law.

The rule of law has always been that where a servant acts in any manner incompatible with the due or faithful discharge of his duty to his master, the master has a right to dismiss him.

The relation of master and servant implies necessarily that the servant shall be in a position to perform his duty faithfully, and if by his own act, he does anything which is prejudicial to the interest or to the reputation of the master, the master will be justified not only if he discovers it at the time, but also if he discovers it afterwards in dismissing that servant.

In the case of Arkhurst v Ghana Museum and Monuments Board (1971) 2GLR 1, Arkhurst was a museum assistant employed by the board. During his spare time, he engaged people to make privately modern representations of museum objects, which, without licence, he exported at a profit to collectors.

That business was essentially the same as that of his employers, so it conflicted with his primary job. The conflict on the part of Arkhurst came to the attention of the management of the Museum Board. The board decided to dismiss Arkhurst since his private activities conflicted with the interests of his employers. He sued the board for general damages for wrongful dismissal. The High Court presided over Abban J. (as he then was) dismissed his claim. This is what the judge said:

"An employee owes a duty of fidelity to his employers even in his spare time and where an employee knowingly, deliberately and secretly in his spare time does any act that is likely to be prejudicial to the interests of the employers they are entitled to dismiss him. The objects clandestinely exported by the plaintiff were to his knowledge of cultural and historical interest and his conduct was untrustworthy, unpatriotic and offended against public policy and thus justifying instant dismissal."

While the law permits you to use your free time as you wish, including doing business that will bring you income, the law restricts any such private business to work other than one that runs in competition with that of your employers' business for as a worker the law does not permit you to engage in the same business as that of your employers.

In doing so, you will be competing with your employers and diverting lawful and lucrative customers away from your employers' business to your private business. However, at the end of the month, you expect your employers to pay you a salary. A conduct of that nature merits summary dismissal.

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