Consortia under the OHADA Law and the interest of wage earners

Abstract

The economic development of commercial companies, matched with the desire to modernize the size and structure of commercial companies and business units, is manifested by the multiplication of branches and the creation of subsidiaries, which leads to the creation and the multiplication of consortia. This may be a plus for the business world, but, for the wage earners, it is mostly characterized by the disregard of their interest. The aim of this article is to show the legal apprehension of the situation of wage earners in a consortium under OHADA law. What are the mechanisms put in place by the law to remedy the unpleasant legal situation of wage earners in the consortium? In conceiving the possibility for commercial companies to come together through various ties to form an entity called a consortium, the OHADA Treaty had to see in which way the interests of those who play a major role (wage earners) for the development of such companies will be safeguarded. This article has a double interest: socio-moral interest and a scientific interest—socio-moral interest, in that it tries to examine how the interest of wage earners, which is mainly alimentary and will not be abandoned in favour of capital interest; and a scientific interest as it endeavours to reconcile the application of two rules of law: that of company law and of labour law.

I. Introduction

A wind of modernity is blowing on commercial companies under the Organization for the Harmonisation of Business Law in Africa (OHADA)¹—one that is wild enough to carry away the security of wage earners.² This new era of industrial mutations, characterized by serious upheavals in the size and structure of commercial companies, especially with the acceleration of the phenomenon of business concentration, bears heavy consequences on wage earners. Economically, business concentration is a good phenomenon because it leads to the creation of important units of production, but, on social grounds, it is susceptible to creating serious consequences as far as the interest of wage earners are concerned: faced with fusion, splits, the contribution of sector of activity from one company to another, and the creation of subsidiaries, wage earners do not benefit from any guarantee of the maintenance of their office.³ Meanwhile, they are at the centre of all commercial companies that evolve and prosper, consortium inclusive.

The Cameroon Labour Code, in its section 1(2), defines a wage earner (worker) as ‘any person irrespective of sex or nationality who has undertaken to place his services in return for remuneration, under the direction and control of another person, whether an individual or a public or private corporation, considered as an employer’. And the OHADA draft Uniform Act on Labor Law,⁴ in Article 2, defines a wage earner as ‘any natural person who has undertaken to place its professional activity, in return for remuneration under the direction and authority of another natural or legal person, whether public or private, called employer’. It is relevant to note that this Uniform Act excludes from its application persons appointed to a permanent post in an executive category of public administration and, likewise, staffs governed by public statutes.

Section 173 of the OAHADA Uniform Law relative to commercial companies and economic interest groups defines a consortium as a group formed by commercial companies bound to one another by various relations that allow one of them to control the others.⁵ These companies are bound together by relations that can be financial,⁶ contractual, or even personal relations⁷ that are susceptible to giving full power to one company to control the others:⁸ the controller is called the parent company, and the controlled are the subsidiaries. The power of control of the parent company over the subsidiaries can be obtained through techniques of law of contract, such as the contract of consortium and contracts of integration; or through techniques of commercial law, such as the creation of subsidiaries through the making of contributions to an existing company, and through the purchase of a majority share in an existing company.⁹ The manifestation of the power of control within the consortium leaves us with the feeling that the consortium functions as a single company; meanwhile, the Uniform Act relating to commercial companies considers not the oneness of the companies that form a consortium but the identity and the legal autonomy of each commercial company that forms the consortium—that is to say, the control of the parent company in their subsidiaries is fundamental to the functioning of the consortium. The element of control is even said to be the fundamental element that characterizes a consortium.¹⁰ The control of the subsidiaries by the parent company may start right from the creation of the company (subsidiary), or it can occur during the life of an existing company when the mother company enters into one of the above relations, but the time of creation does not influence the reality of the consortium. Once a company becomes a subsidiary, its total operation depends on the desires and scheme of the parent company. In other words, the subsidiary is totally dependent on the parent company in all its aspects, such that no decision can be taken by the subsidiary without the consent of the parent company.

It is in this light that there exist within the consortium conflicts of different interests: the interests of the subsidiary, the interests of the parent company, the interest of the shareholders, the interests of the minority, and the interest of the workers (wage earners) in the different companies of the consortium.¹¹ In this light, consortia derogate the principle of the autonomy of legal personality, which states that a commercial company has a legal personality separate from that of its shareholders and that a commercial company is legally independent from any other. With respect to this principle, the parent company has no power to intervene in the functioning of the subsidiaries as they are legally recognized as autonomous companies. Yet the parent company goes against this rule and dictates everything that occurs within the subsidiaries; as such, it puts as stake many interests in the companies: the interest of the minority shareholders of the companies, the interest of the subsidiaries themselves, and, most especially, the interest of the wage earners, given the fact that their wages serve for their survival.

Many interests are at stake within the consortium, but our focus in this article is the interest of wage earners. As stated earlier, wage earners are at the heart of every company that evolves and prospers. They are the key to the success of every commercial company: for which reason, they should enjoy all the privileges given to them by law. Wage earners of an isolated company do not encounter the problems that those of consortia encounter, which is why the law has to put in place some mechanisms for the protection of their interest. The practice of consortia is capable of complicating the application of the legal provisions that organize individual and collective work relations or even frustrating their effects.¹² Hence, there is an urgent need for judges to elaborate a case law—a legal consecration that will acknowledge the realities of consortia where the protection of all social partners would be the order of the day and, particularly, the protection of wage earners. This is because the present reality of consortia endangers the interest of wage earners.¹³

It is important to say that there is a draft Uniform Act on Labour Law that has proposed many innovations for the protection of wage earners. Labour law is essential within the OHADA legislation for economic development, job creation, and investor confidence in African States—reasons why the OHADA legislators saw it necessary to draw up a Uniform Act on Labour Law.¹⁴ Truly, the Uniform Act on Labour Law has proposed measures to balance the protection of wage earners. The law also outlines workers’ rights, their working conditions, and legal processes for addressing disputes and highlights the role of collective bargaining and the necessity of protection of vulnerable workers. But the question remains: are these measures valid for wage earners who are present in consortia? The legal question we aim to answer in this article is that of the legal apprehension of wage earners in the consortium under OHADA law—that is, what is the legal situation of wage earners within the framework of a consortium? It is evident that the wage earners of isolated companies do not encounter the same difficulties as those of consortia, so they need a particular set of rules of protection to meet their needs.

This article has a social as well as a moral interest as its tries to examine how the interest of wage earners should not be abandoned in favour of capital interest and, even more so, a scientific interest and as it endeavours to reconcile the application of two rules of law: that of company law and that of labour law. This notwithstanding, this article is focused on revealing the unpleasant situation of wage earners working in consortia and examining the different mechanisms that can be put in place by the law to ensure that the wage earners benefit from all the privileges given to them by the law even within the framework of consortia. The first part of this article presents the reality of wage earners in consortia, which can be termed as gloomy, before analysing the different mechanisms put in place by law for their protection.

II. The unpleasant legal situation of wage earners in consortia

The situation of wage earners in consortia is characterized by numerous vicissitudes. The notion of a consortium is purely an economic phenomenon that does not favour wage earners who offer their services to the companies that form the consortium. The transgressions of consortia against wage earners are legion, mostly instigated by the absence of the legal acknowledgment of a consortium as a legal entity. It is important to note that the individual companies (subsidiaries) that form the consortia maintain their legal personality as stipulated by law. Their belonging to the consortium does not nullify their identity as legal entities.

Viewed on a pragmatic level, the legal autonomy of the subsidiaries is not firm, which is because they belong to a consortium. As stipulated earlier, the power of control held by the parent company over the subsidiaries empowers it to dictate everything that must occur in subsidiaries and at every level of the life of the company (subsidiary). By so doing, the different categorical interests, including those of wage earners in subsidiaries, are endangered. This is the main reason why the situation of wage earners in consortia is seen as unpleasant: first, because of the difficulty to acknowledge the employment relationship and, second, because of the difficult management of the employment relationship.

A. The difficult acknowledgement of the employment relationship

A wage earner in an isolated company does not encounter the difficulties encountered by those of consortia. There are legal provisions that can easily be applied within an isolated company but become difficult to enforce when it comes to consortia. This has to do with the accumulation of offices that is legally recognized by OHADA law, but the application of which, within the consortium, places the wage earner in a precarious situation.

1. The existence of accumulation of offices

Section 426 of the Uniform Act relative to commercial companies and economic interest groups stipulates that ‘[u]nless otherwise provided by the Article of Association, a worker of a company may be appointed director where his contract of employment corresponds to an effective job. Likewise, a director may conclude a labour contract with the company where such contract corresponds to an effective job’. This is a general principle admitted by OHADA law as it stipulates in Article 23 of the draft Uniform Act on Labor Law that no worker may enter into more than two contracts with the same employer. It treats it differently depending on whether the appointment to a corporate office came before or after the conclusion of the contract of labour.

The accumulation of functions can result either when a wage earner is appointed as a corporate officer to which case the labour contract is prior to the appointment or when a corporate officer enters into a labour contract with the company—in which case, the corporate office appointment is prior to the labour contract. It is as a result of the upgrading of the wage earner that he can be promoted to a corporate office, which does not necessarily mean that his labour contract is suspended or terminated; it simply means that in addition to his technical duty stipulated in his labour contract as a wage earner, he will hold a corporate office where he will also execute a precise task stipulated in his contract. According to the law, this appointment is submitted to no particular rule or procedure.

It must be admitted that the appointment of a wage earner to a post of responsibility is easier than for a corporate officer to enter into a labour contract with the company where he works; this is because the consequences may be enormous for the company. It may lead to a conflict of interest and fraud, which can lead to the diversion of the protective rules put in place in favour of wage earners. Nonetheless, the legislator is still receptive towards such an accumulation of functions, but it is subjected to certain conditions. This is why Article 426 of the Uniform Act provides that ‘an administrator can conclude a contract of labour with the company where he administers…in this case the contract shall be subject to the provisions of Article 438 of the Uniform Act’. So any administrator desiring to enter into a contract of labour must obtain the consent of the board of directors.¹⁵ In a company where there is no board of directors, the company’s administrator has the obligation to present a report on the agreements concluded with the company at the company’s ordinary general meeting.¹⁶ This is the case in public limited companies and private limited companies that function without a board of directors.

In order to confirm the presence of accumulation of offices, a judge will retain the classical elements of the definition of the contract of labour: salary, actual service, and the subordination link. It is through these elements that a judge will seek the criteria of accumulation of offices. Thus, for a judge to admit the accumulation of offices, they will seek the autonomy of the different functions. In other words, the contract of labour should be dissociated from the social function, or the judge will consider it to be confusion of functions. In addition, the technical functions should be separate, or they will be absorbed by the corporate office duties.¹⁷ But this dissociation and the technicality of the functions of the wage earner are not sufficient to demonstrate the reality of the accumulation according to the case law. This is why the judges apply the criterion of ‘specificity of tasks’, which is determined through the presence of the criteria of subordination that characterizes the wage earner’s situation towards the employer. The establishing of this criterion is always difficult, especially when both posts are held by the same person.

From these analyses, the conclusion is reached that the accumulation of offices is consecrated in law and case law, even though the two sources of law treat it differently. However, the management of the accumulation of offices in a consortium is not as easy as it can be in an isolated company.

2. Difficult management of accumulation of office

Accumulation of offices in consortia occurs when a worker is appointed to a corporate office in a subsidiary other than that in which they exercise their duties as a wage earner. It can also occur when a worker is recruited with the aim of their directing a subsidiary. The phenomenon of consortia has made it possible for a wage earner to be appointed as a corporate officer in a different subsidiary. However, at a legal level, it is said to be accumulation of functions because it clashes with the principle of autonomy of corporate personalities that govern company law, making the situation very uncomfortable for the wage earner as they cannot benefit from their seniority in the company. Fortunately, the practice of consortia, and even a French decision, have admitted that a wage earner in a holding can occupy the post of a general director in a subsidiary and still maintain his post as wage earner in that holding,¹⁸ which is a manifestation of the accumulation of offices. However, this is possible only if the judge has the proof of the continuation of the worker’s duties as a wage earner.

But, still, who holds the power of authority over the wage earner? The question that is difficult to answer here is to know which company is the worker’s real employer. Is it the holding (consortium) or the subsidiary with which they have a labour contract? A French case law retains the consortium to be the worker’s employer.¹⁹ This is why Paul Le Cannu says all the managers of the consortium can be seen as the employer. So it is the parent company that will be considered as the worker’s employer.

Another problem can occur at the breach of the labour contract of a wage earner who holds a corporate office. At this level, company law and labour law are difficult to reconcile.²⁰ The provisions of company law are applied in relation to what concerns the corporate office and labour law is applied in relation to the worker’s labour contract with the company. The accumulation of office that automatically leads to the accumulation of a labour contract and a corporate office is governed by the autonomy of these different legal situations. This simply means that the dismissal of the corporate officer, which puts an end to his corporate office, will not lead to the breach of his labour contract. Also, the breach of the labour contract will not lead to the end of the worker’s corporate office. In other words, the end of one post will not mean the end the other. This measure serves a good purpose for the protection of the wage earner’s interest.

Another doubt comes from the conflict of interest that may occur with the worker with double functions. Accumulation of offices is a source of conflict of interests:²¹ the worker’s interest as a wage earner and their interest as a corporate officer. The case law provides that the two functions are independent from each other; the fact that they are held by the same person does not modify their independent nature. The independence of these functions concerns the technical and specific character of the wage earner function and the power that arises from the mandate of his function as a corporate officer. In the absence of dissociation between these two functions, the judge may consider it as confusion of functions. So the problem with the management of accumulation of functions is the difficulty to dissociate the two functions; they must show the proof of the specificity of their different functions within the company. It is worthy to note that, the larger their power as a corporate officer, the lesser the chance to prove the specificities of their duty as a wage earner.²²

B. The difficult management of employment relationship

The geographical mobility of wage earners is another element that affects the interest of wage earners within the consortium. The situation of wage earners in consortia is characterized by instability: the movement of wage earner from one subsidiary to another—from the parent company to a subsidiary and from one geographical area to another have negative impacts on their interest. The mobility of wage earners from one subsidiary to another has negative effects on the interests of wage earners.

1. Possible mobility of wage earners within the consortium

The phenomenon of mobility of wage earners is not specific to consortia. The Cameroon Labour Law as well as the draft Uniform Act on Labour Law permit the mobility of wage earners in isolated companies; wage earners can be transferred from one post of work to another or from one company or branch to another with geographical differences. Mobility can be defined as the movement of wage earner from one post of work to another, which can be geographical—that is, when the wage earner is transferred from one place of work to another. The mobility can be professional—when it involves only the corporate office. The mobility can also be judicial—where the wage earner’s legal situation changes with the company.

The phenomenon of mobility has taken a larger proportion in consortia and has also greatly weakened the situation of wage earners. The consortium has the same managers and the same capital, which is the sum of capital belonging to the different subsidiaries and the same personnel.²³ This simply means that the consortium, with all its subsidiaries, functions as a single company, and the employees (wage earners) are treated as if they belong to a single company. As such, the management of the consortium is underpinned by the phenomenon of the mobility of employees from one subsidiary to another or from the parent company to the subsidiary and vice versa.

As stated earlier, the mobility of wage earners is not only the prerogative of consortia; it is a legal rule established by the Cameroon Labour Law and has been accepted in the draft Uniform Act on Labour Law.²⁴ So every wage earner has the obligation to submit to the rules that govern labour contracts. The wage earner must permit a certain measure of flexibility in the management of his post of work within the company where he executes his duty.²⁵ However, the phenomenon of mobility is not always imposed on wage earners. It can be subject to an agreement through individual labour contracts or through a collective convention by including a mobility clause in the contract, where the parties agree to the mobility clause under the condition that the transfer from one post/place of work to another be justified by the nature and technicality of the new function and by the interest of the company.

The doctrine might be very hostile towards the mobility clause, but the case law reaffirms it by admitting that the employee will be guilty of fault if they refuse to respect the contractual clause that permits them to be transferred to another post/place of work.²⁶ This comes to reinforce the idea that the mobility clause is an element that secures the labour contract, although it does not always work in favour of the wage earner. It should be noted that, in most cases, the conditions of the clause of mobility are not respected, notably when the interest of company is at stake. According to French case law, as far as the mobility of the wage earner is for the benefit of the company, the respect of the conditions of mobility clause is no longer obligatory.²⁷ The same position is held by the Cameroon Labour Law of 14 August 1992, which stipulates that the clause of mobility is applicable exclusively for the company’s interest. This further explains to what extent the interest of the wage earner is neglected. Nevertheless, the respect of notice period is mandatory where the wage earner must be notified before time of their transfer.

Within the different national collective agreements that treat the matter of mobility of wage earners,²⁸ the National Collective Agreement governing undertakings in public works, building, and related activities of 16 June 1976 provides explicitly that ‘wage earners can be muted to a place different from where they have the habit of exercising their duty.’²⁹ The collective agreement governing agricultural undertakings and related activities in its Article 40 also provides that ‘a worker can be sent to work temporally or for an indefinite period of time, to a place different from where he was employed’. The problem with this form of mobility is that these conventions do not give the implementation modalities. For instance, the generality with which the obligation is stipulated and the absence of restriction as to the geographical sphere of mutation shows that the wage earner can be muted to an enterprise out of the national territory, which might not be in their favour.

2. The obnoxious effects of the mobility of wage earners within the consortium

The mobility of wage earners of consortia has obnoxious effects at various levels, and the first is that of the determination of the employer. The traditional criteria of determination of the employer are the affective exercise of work, subordination link, and remuneration. These criteria are easily met in isolated companies but very difficult to determine in consortia. According to the case law,³⁰ the identity of the employer is given to the subsidiary that has a labour contract with the wage earner—that is, the company that exercises a legal and financial authority over the wage earner. The payment of wages, the delivery of a pay slip, and even the exercise of an activity for a different company other than that one do not affect the position of the case law.³¹ Meanwhile, at the practical level, it is the parent company that is considered to be the employer. This is because it has the power to decide on all that concerns the subsidiaries and their workers; it decides on the mobility of wage earners and maintains control over the progress of every subsidiary with their wage earners. This can be justified by the fact that the parent company is fully responsible for the welfare of the consortium as a whole.

The judge is not interested in the legal relations between natural persons; he is more interested with the level of economic relations that exist between the companies that form the consortia. This is why the criterion of authority and economic dependence is often used to identify the employer. In French case law, a French company was attributed the status of an employer and ordered to pay the salary arrears of a worker that was sent to work in an African company. This was due to the fact that the African company was a subsidiary and was not independent of the French company that actually managed its activities. Nonetheless, this criterion is not sufficient as it can only lead to a plurality of employers.³²

The problem with mobility of wage earners is more evident when it is international. We talk of international mobility when the wage earner is sent to work out of their national territory, which is frequent with multinationals. The foreignness of the wage earner is another factor that does not favour the wage earner. This is because the application of the rule of conflict of law and of jurisdiction will certainly entangle the application of the substantial law related to consortium. It is important to state that there is insufficient legislation on conflict of jurisdiction. Articles 14 and 15 of the Cameroon Civil Code give the privilege of jurisdiction to Cameroon. In case both parties are foreigners, the doctrine proposes Article 132 of the Civil Code, which introduces a principle according to which the competent jurisdiction should be that of the place of execution of contract.³³ Yet this does not solve the problem as wage earners in foreign countries will witness the transfer of litigation from place of residence to a former place of work in case of breach of contract—a reason for the creation of a subsidiary competence for the jurisdiction of place of residence of the wage earner. Nevertheless, the parties can agree on the terms of competent jurisdiction through bilateral and multilateral conventions. A good example is the labour agreement between Cameroon and Gabon signed on 19 August 1974 in Libreville.

III. The necessary mechanisms of law for the protection of wage earners in consortia

In recent years, working and employment conditions have changed significantly in many countries, both advancing and developing. This is due to globalization, technological changes, and regulatory shifts. Also, there is a growing recognition that improving the quality of work is an important policy goal. Yet the challenge is the kind of policy actions that need to be developed to improve the everyday reality for workers. With this challenge in mind, it is very necessary for the law to offer new ideas and insights on how to improve working conditions while protecting the interests of the workers.

At the national level, different constitutions have created a sense of awareness in the mind of workers concerning their rights as wage earners: the right to form and join trade unions and the right to strike as well as the sense of belonging.³⁴ This further gives them the freedom of communication, expression, press, assembly, association, and trade unionism as well as the right to strike actions granted them by the State under the conditions fixed by the law.³⁵

At the international level, the United Nations Universal Declaration of Human Rights (UDHR) stipulates that everyone is entitled to equal protection against discrimination and violation.³⁶ Relating to the protection of workers’ right, it is an obligation for every State to ensure the right to work of every citizen, the right to free choice of employment, just and favourable working conditions, and the right to protection against unemployment.³⁷ Article 23(2) of the UDHR provides that everyone has the right to equal pay for equal work. Any worker has the right to a just and favourable remuneration that permits them to provide for themselves and their family, an existence worthy of human dignity, and, if necessary, other means of social security, such as the right to form and join a trade union that will serve for the protection of their interest.³⁸

Added to this is the International Labour Organization, which is aimed at achieving decent working conditions for all by promoting social dialogue, social security, and employment creation as well as the respect for international labour standards. The International Labour Organization is equally aimed at promoting workers’ rights at work as well as encouraging decent employment opportunities. With these national and international regulations, the protection of the interests of wage earners in their different spheres of work are made easy especially in isolated companies, which is not the case in consortia. When the companies involved are subsidiaries, it becomes complicated due to the nature of the body in which they belong (a consortium). It is thus necessary for legislators to take into consideration the nature of a consortium while enacting laws for the protection of wage earners.

A. Necessary preventive measures for the protection of wage earners in consortia

The protection of wage earners should be the priority of every business organization. It has been observed that instruments for the protection of the interest of wage earners have shown some progress at the level of drafting, but they have greatly failed in their implementations. According to Leviss Itoe Ngoe, this is because of the lack of an efficient regulatory force to implement the laws.³⁹ Notwithstanding, we know that information is the key to every door, which is why we think the first preventive measure for the protection of the interest of wage earners is information, which can be followed by the right to the representation of wage earners.

1. The right to the information of wage earners

No economic activity can prosper without the intervention of wage earners. For maximum input, wage earners need to benefit from maximum information—that is, they need to be informed of the everyday situation of the company. First, wage earners should be able to obtain information concerning the real and actual situation of the company.⁴⁰ This information will help the wage earners in the execution of their contract and also help to orientate them for better participation in the management of the company. This right also plays a major role in the protection of the interest of wage earners. They might not have economic power in the company, but they play an indispensable role. They are the masterpiece and the cornerstone for the economic development of the company. For this reason, a minimum amount of loyalty towards them will oblige that they be informed and consulted, in a timely manner, about the modification of the structure of the company that may have some major repercussions on their interest.⁴¹

The aim of this information is to permit wage earners to better prepare themselves on how to protect their interest. In Article 178(1)–(5), the project of the draft Uniform Act on Labour Law confirms this by stipulating that ‘staff representatives have amongst other attributions, to give their opinion on matters concerning all proposed acts of the employer instituting rules applicable on workers’. In France, for instance, wage earners are treated as shareholders. They receive complete information about the company in a permanent and continuous manner.⁴² The objective of this obligation is to give wage earners complete information concerning capital remodelling, control taking, merging, and partial contributions and, mainly, to give them the opportunity to prepare their defence either by law or by extrajudicial means, such as through mediation and negotiation in order to avoid open conflicts.

French case law⁴³ ratified this obligation by deciding that information provided to wage earners should be mandatory; it should be done before every final decision. This court decision also stipulated that the company work council must be given sufficient time to study the information; the court of cassation estimated that seven days is not sufficient for the wage earners to study the files and give their opinion.⁴⁴ The staff representative can give a substantial opinion only if they benefit from a fair and reasonable time limit that will permit them to keenly study the file and give a reasonable opinion. The content of the information should be clear enough for the staff representative to give an informed opinion. This is why Article L 435–5(2) of the French Labour Code provides that ‘to permit him to give a reasoned opinion, the company’s work council must be given a written precise information, transmitted by the company manager’.⁴⁵

The company management also has the obligation to inform the wage earners of the difficulties of the company.⁴⁶ This is the case in France under the business protection law of 1 March 1984. Under this law, wage earners benefit from the protective rights of shareholders during any difficult phase of the company. It is under this law that the wage earners were given the right to trigger alert procedures in case of financial difficulty and also to question the company management on the different strategies put in place to redress the financial state of the company. The main reason behind this power is to permit wage earners to play a role in the protection of the interest of the company from which they derive their financial income.⁴⁷

OHADA law, after a great deal of time, has finally granted wage earners the power to trigger an alert, which not only serves the interest of the company but also that of the wage earners. The right to information should likewise be reinforced between the wage earners and the company management concerning all domain of the company and all situations and circumstances that would help prepare them in the protection of their interest. The Uniform Act on Accounting Law reiterates this right to information when it stipulates in Article 1 that ‘all companies have the obligation to keep accounts of all financial transactions, with the aimed to inform the internal and external partners of the company’.

2. The right to the representation of employees

Under the Cameroon Labour Law, wage earners are represented by a staff representative, whose first prerogative is to defend the interest of their co-workers. The interests of wage earners can be validly defended only by an institution with the effective means to do so. But it is shameful to admit that the staff representative does not have the adequate legal and economic strength that would permit them to effectively fulfil their mission. The precarious nature of their job does not permit them to take initiatives as a staff representative. If wage earners in isolated companies face such difficulty, what about consortia with a large number of wage earners distributed in subsidiaries with relative autonomy?

It is an obligation for every commercial company to have an organ of representation for wage earners. OHADA law is silent on the representation of wage earner in consortia. Meanwhile, it is of outmost importance that wage earners be implicated through their representative in the management of the business. A wise employer will fully implicate wage earners in the functioning and the management of his business; this is done through the information and consultation of the wage earners through the staff representation organ.⁴⁸ It will be beneficial for the employer to create an organ of representation for wage earners in the consortium; it is a source of balance during social dialogue. The economic strength of a consortium puts it in a situation of permanent unilateralism. As such, the creation of the staff representation organ known as corporate group committee will be a salutary measure for wage earners.

The staff representation is a corporate organ with legal personality and is comprised of the employer, a staff representative, and one or more trade union representatives. Their objective is to hold social and economic prerogatives for the protection of the interest of wage earners and their well-being. The organ has the duty to provide more complex information to staff representatives in the consortium; to centralize information on the consortium’s activities; to receive communications on consolidated accounts and inform the staff on public purchase; and to exchange offers. The staff representative organ permits the acknowledgement of wage earners and their interests in the consortium and helps in the resolution of conflict between the consortium and inter-company wage earners.⁴⁹

Even though the preliminary draft Uniform Act on Labour Law does not mention the corporate group committee, the liberty is given to the different parties to create organs that will help their wage earners to be confident.

B. The reactive measures for the protection of wage earners

Measures for the protection of the interest of wage earners can also be reactive. OHADA law has provided for reactive measures to counter the action of consortia that jeopardize the interest of wage earners. The legislator has taken into consideration the modifications of the legal situation of wage earners. This is why it provides that the transformation of an isolated company into a subsidiary must not modify the legal situation of the wage earners. Article 41(1) of the Cameroon Labour Code takes the same step by providing that ‘in the event of any change in the legal status of the employers in particular, through succession, sale, amalgamation, financial reorganisation or transformation into a partnership or company, all contracts of employment in force on the date of the change shall subsist between the new organisation and the personnel of the undertaking’. Hence, the modification of the legal situation of the company will not have any repercussions on the wage earners. The legislator intends to maintain the judicial ties between the personnel and the company, no matter the modifications that affect the situation of the employer.⁵⁰

The objective of the legislator here is to ensure that the wage earners have a certain stability in their employment, irrespective of the remodelling of the company’s capital or legal situation. Article 41(a) of the Cameroon Labour Law is applicable in case of partial transfer of the company’s assets, irrespective of whether or not there is a legal tie between the two successive employers or whether the company is undergoing a collective procedure for the settlement of debts. The interesting part of this legal provision is the maintenance of the labour contracts and the maintenance of the same economic conditions that will provide sustenance for the advantages acquired by the wage earner in the company, such as seniority, which is an advantage for the calculation of paid leave, retirement, and dismissal benefits.⁵¹ In the case of mobility, the calculation of seniority in the company begins from the date of the wage earner’s employment to their first post in the consortium. Article 51(2) provides that ‘when a wage earner is transferred from one subsidiary to another or from the parent company to a subsidiary, he preserves the benefits of seniority and all the advantages acquired from his/her first post of office’.

The same solution is applied in case of dismissal of a wage earner. If a wage earner is on a temporal mobility, the first contract with their initial employer remains active. If the transfer is for an indefinite period of time, a second contract will be born between the wage earner and a new employer without putting an end to their former (first) contract. In case of breach of the second contract, the first contract will be reinitialized.⁵² The first contract cannot suffer the effects of the second because both contracts are autonomous. The facts that led to the breach of the second contract cannot justify the breach of the initial contract.

The method of calculation of seniority in a consortium is the same in case of dismissal. Seniority is calculated from the day of entry into the consortium—that is, from the day the first contract was signed. Seniority serves as a base for the calculation of dismissal indemnities; so, the extension of its computation increases the value of indemnities due. The Cameroon Labour Law is silent on this matter, while its counterpart—that of Senegal—considers consortia as a single entity: a homogeneous body that reminds us of the concept of economic and social unit,⁵³ created by the French case law and consecrated by reforms from the lois Auroux in France.⁵⁴ These reforms disregard the legal autonomy of subsidiaries and regard consortia as legal entities where all the wage earners are considered and treated as part of the same economic unit.⁵⁵

Another reactive measure for the protection of the interest of wage earners is the reduction of the multiple obligations that weigh on them, such as the obligation of non-competition,⁵⁶ which is diluted in consortia. This obligation is difficult to respect because of the mobility of wage earners in different subsidiaries belonging to the same consortium; they know and master the commercial techniques and policy of the different companies of the consortium.⁵⁷ For the respect of the interest of wage earners, the Senegalese law no longer sees consortia as a body of legally independent companies but, rather, as a single economic entity. It will be advantageous for OHADA law to follow suit in order to give wage earners the place they deserve given the important role they play for the sustenance and the development of commercial companies.

IV. Conclusion

Conclusively, the wage earners of commercial companies—especially, those of subsidiaries—are exposed to different situations that lead to the disregard of their interest. For the protection of the interests of the different actors of consortia—especially, wage earners—OHADA law has to take different measures to remedy this situation. Preventive and reactive measures are indispensable, as proposed in this article, to better the legal situation of wage earners in the consortium. A consortium is not recognized as a legal entity, but the legislator must find a way to protect these partners whose presence in the consortium is indispensable given the important role they play in the growth of commercial companies. It is regrettable that even the draft Uniform Act on Labour Law, which has tremendously created measures for the protection of wage earners, is silent on matters of accumulation of office, mobility of wage earners, and the determination of employment relation within the consortium.

Africa possesses rich natural and human resources that present significant potential for economic development—the reason for the harmonization of labour law rules to accompany the other Uniform Acts aimed at unifying business laws among its Member States to foster economic activity. It emphasizes that the protection of wage earners be broad and be extended to vulnerable groups and that there should be a better means of dispute resolutions through the prioritization of negotiations.

Nonetheless, there is a difficulty in implementing effective protection in Member States where economic realities favour employers and where the tradition of negotiations in labour relations is not well established. We can certainly say that the draft Uniform Act on Labour Law is not sufficient for the protection of wage earners as it does not protect employees of the informal sector and those with economically precarious situations where their negotiation power is weak. For this draft to be efficient, it must improve its measures at every level, especially in organizations like consortium, strengthen enforcement mechanisms, and ensure that the balance between the protection of employees and the promotion of business growth is fair and effective.

Footnotes