Contracts and Dismissals
Written Employment Particulars
Ghanaian Labour Law requires that the contract of employment be provided in writing for workers employed for six months or longer.
This written statement must include:
- information about the worker and employer
- the date of appointment,
- job title,
- wage rate and payment interval,
- work hours and overtime payment,
- annual leave,
- conditions relating to incapacity for work due to injury or sickness,
- the length of termination notice required by the worker and employer, and
- details of the social security or pension scheme.
The written statement of particulars (containing main terms and conditions of employment) should be provided to a worker within two months of the commencement of employment. The contract must be signed by both parties and dated.
A contract of employment for a casual worker may not be written; but casual workers have the right to minimum wage for each working day, overtime and medical facilities.
Temporary workers are entitled to the Labour Act’s minima regarding minimum wage, hours of work, rest periods, paid public holidays, night work and sick leave, irrespective of whatever terms the parties agree.
Sources: § 12-13, 74-75 & Schedule I of the Labour Act 2003 (Act 651)
Fixed Term Contracts
The Ghanaian Labour Law allows fixed-term contract workers to be hired for tasks of a permanent nature. The Labour Act does not refer to any specific legal regime for the use of fixed-term contracts. There is no mention of the fixed term contracts' maximum duration (including renewals).
However, temporary and casual employment are regulated by special provisions. - Temporary worker is a worker who is employed for a continuous period of at least one month and is not a permanent worker or employed for a work that is seasonal in character; - Casual worker is a worker engaged on a work which is seasonal or intermittent and not for a continuous period of more than 6 months and whose remuneration is calculated on a daily basis.
A temporary worker employed by the same employer for a continuous period of six months and more is treated as a permanent worker.
Sources: § 73-78 of the Labour Act 2003 (Act 651)
Probation Period
There is no explicit provision in the Labour Act about maximum duration of probation period. The Labour Act refers to a "reasonable duration determined in advance".
Probationary period and conditions of probation are generally provided in collective agreements. If an employment contract requires a probation period, the contract must clearly state how long this probation period will last.
Sources: § 66(b) & 98(d) of the Labour Act 2003 (Act 651); Regulation 5 of Labour Regulations 2007 (LI 1833)
Termination of Employment
Types of Employment Termination
An employment contract may be terminated through: 1. Mutual agreement: Both parties agree to end the contract. 2. Expiry or completion of a fixed-term contract 3. Termination by employee: employment is terminated by the employee on grounds of ill-treatment or sexual harassment 4. Death of the employee: The employment contract terminates on the employee’s death. 5. Medical unfitness: If an employee is found medically unfit for work or cannot carry out work due to sickness or accident. 6. Incompetence: If the employee lacks the necessary skills or qualifications. 7. Misconduct: Proven misconduct by the employee. 8. Redundancy: Due to economic or structural changes in the organisation.
An employer can fairly terminate an employee’s contract for reasons such as poor performance or lack of qualifications needed for the job, proven misconduct, redundancy (when the job role becomes unnecessary), or if the employee is legally prohibited from performing their duties.
When is dismissal unfair?
A dismissal is deemed unfair if: 1. There is no valid reason: The termination lacks a fair ground, such as: - Misconduct (not proven or not serious enough). - Incapacity (without evidence of poor performance or ill health). - Redundancy (if not genuine or procedurally flawed).
- Procedural fairness is lacking: The employer fails to follow fair processes, such as:
- Not providing a hearing or opportunity to defend against allegations.
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Not adhering to notice requirements (unless gross misconduct applies).
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It is based on prohibited grounds:
- trade union membership (or even intention thereof);
- workers' representative (or seeking the office thereof);
- filing of complaint or participation in proceedings against the employer on violation of labour laws;
- worker’s gender, race, colour, ethnicity, origin, religion, creed, social, political or economic status;
- pregnancy and maternity leave;
- disability; temporary illness or injury as certified by a recognised medical practitioner;
- lack of qualification for work in which the worker has been employed (the current qualification requirement being different from the qualification required at the commencement of employment); and
- the refusal (or intention thereof) to do work at the time of participation in lawful strike unless the work is necessary to prevent actual danger to life, personal safety or health or maintenance of plant and equipment.
An employment contract is deemed to have been terminated unfairly if the worker terminates the contract, with or without notice, because of the employer's ill treatment of the worker and failure on the part of the employer to take action on repeated complaints of sexual harassment of the worker.
A termination is unfair if the employer fails to prove that the reason for termination is not fair or that the termination was made in accordance with a fair procedure of the Labour Act.
Remedies in Case of Unfair Dismissal
If a dismissal is deemed unfair, the employee can seek redress through the National Labour Commission (NLC).
Remedies include:
- Reinstatement:
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The employee is restored to their original position without loss of benefits or seniority.
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Re-engagement:
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The employee is rehired in a comparable role, not necessarily the same position.
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Compensation:
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Payment for losses suffered, which may include:
- Wages lost from the date of dismissal to the resolution of the case.
- Additional damages for distress or punitive purposes, as determined by the Commission.
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The Act does not cap compensation, leaving it to the Commission’s discretion based on the case’s merits.
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Combination of Remedies:
- The Commission may order both reinstatement/re-engagement and compensation if appropriate.
Process: - The employee files a complaint with the Commission within 3 months of the dismissal (extendable in exceptional cases). - The Commission investigates, mediates, and issues a binding decision, enforceable through the courts if necessary.
Under the Labour Act, collective dismissals or redundancies occur when an employer contemplates the introduction of major changes in production, programme, organisation, structure or technology of an undertaking.
Employer Obligations:
- Notification:
- Inform the affected workers and their trade union (if applicable) at least 3 months before the redundancy takes effect.
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Notify the Chief Labour Officer in writing within the same timeframe, detailing the reasons and extent of the redundancy.
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Consultation:
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Engage in good-faith consultations with the trade union or workers’ representatives to explore alternatives (e.g., redeployment, reduced hours).
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Selection Criteria:
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Apply fair and objective criteria for selecting employees to be laid off (e.g., length of service, skills).
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Redundancy Pay:
- Pay a redundancy settlement as negotiated with the employee or union. The Act does not specify a fixed amount, leaving it to agreement or industry practice.
Failure to follow these steps may render the dismissal unfair.
The Labour Act, 2003 (Act 651) of Ghana does not explicitly require an employer to provide a certificate of employment upon termination of employment.
Sources: §14-17 & 62-65 of the Labour Act 2003 (Act 651)
Regulations on Employment Security
- Labour Act, 2003 (Act651)
- Holidays Act, 2001 (Act 601)
