Practice Area Articles
January 16, 2023
Karen Fulton, Tshepo Mokoana and Tarika Patel
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KEY DEVELOPMENTS FOR 2023
Increase in minimum wage
In November 2022, the National Tripartite Committee, the regulatory committee responsible, made up of representatives of the Government, employers and organised labour groups, announced an increment in the daily minimum wage for 2023 by 10% from GH¢ 12.53 to GH¢ 14.88 (equivalent to USD1), in accordance with Section 113 (1)(a) of the Labour Act, 2003 (Act 651). This minimum wage requirement is applicable to all categories of workers. Employers in a free zone area must also be guided by International Labour Organisation ("ILO") Conventions in determining the wage, rights, and other condition of its workers. Employers whose daily minimum wage falls below the new rate must adjust accordingly from 1 January 2023, when the increase will take effect.
Anticipated increase in redundancies
At the end of 2022, Ghana’s ongoing economic challenges have led to an increase in the number of companies facing financial difficulties and undergoing restructurings, which has in turn led to an increase in redundancy exercises.
In this context, it may be helpful to remind employers that the Labour Act, 2003 (Act 651) requires any employer that is contemplating the introduction of major changes in production, programme, organisation, structure or technology of its business that are likely to result in the termination of employment of any of its employees to notify the Chief Labour Officer and any relevant trade unions and to consult the relevant trade union on measures to be taken to avert or minimise the need for redundancies and to mitigate the effect of any redundancies on the employees concerned – for example by helping them to find alternative employment.
Employees will generally be entitled to redundancy pay in the event of any such termination and the amount of any redundancy pay and the terms and conditions of payment are subject to negotiation between the employer and the employee or the trade union concerned. In practice, if there are multiple non-unionised employees who may be affected, the negotiation would likely be with representatives of both groups, and one package may be agreed for all staff.
The notification and consultation obligations and requirements for redundancy pay described above are generally not applicable to employees engaged under a contract of employment for a specified period of time or specified work, employees serving a probationary period, or casual employees. The term “casual employees” is a term of art under Ghana’s labour laws and covers employees who are engaged in work that is seasonal or intermittent and not for a continuous period of more than six months and whose remuneration is calculated on a daily basis.
Anticipated prevalence in hybrid work system
As anticipated in last year’s update, the COVID-19 pandemic has led to an increasing adoption of remote and, perhaps more commonly, hybrid working.
This trend has been magnified by the effects of the rising cost of living associated with the recent depreciation of the Ghana cedi and the high cost of fuel at the pump, where the cost of fuel has more than doubled since January 2022.
Given this ongoing trend, it is increasingly important for employers to have clear policies and procedures to specifically regulate remote and hybrid work. Traditional work policies and procedures are often tailored to the traditional workspace and do not cater adequately for a remote or hybrid model.
But there is still work to be done in this area. In 2022, the International Labour Organization and the Ghana Employers’ Association published a joint study on “The Next Normal: The Changing Workplace in Ghana” which observed that only around 52% of the Ghanaian businesses that participated in the study had implemented a remote or hybrid working policy.
In addition to specific remote and hybrid working policies, employers will also need to review their other policies and procedures in light of this new model. For example, policies on whistleblowing, grievances, disciplinary procedures and, in particular, data and cyber security may all become increasingly critical in the new workplace environment.
KEY DEVELOPMENTS FOR 2022
Mandatory vaccination policies
Although there is no express law presently in Ghana requiring mandatory vaccination, the Government, acting through the Ministry of Health has directed all government and public agencies, including Ministries, Departments and Agencies (MDAs), to strictly enforce a “no vaccination, no entry” policy on their premises with effect from 5 January 2022. In line with this directive, all staff, as well as visitors, to all such government and public agencies now require proof of vaccination by producing their vaccination cards to access these premises. Unvaccinated persons are required to submit a negative PCR result weekly to gain access to the premises.
Some employers within the private sector now require the same from their employees, visitors and other third parties who require access to their premises. There has been some resistance from employees who maintain that they cannot take the vaccine due to religious or health reasons and/or that the Government’s position on mandatory vaccination is an infringement on their rights including the freedom of movement. It is likely that there will be several lawsuits on this topic covering issues such as:
- the necessity for the mandatory vaccination;
- the frequency of taking the PCR Covid-19 tests;
- who should bear the cost of the tests/ how much the test should cost;
- constructive dismissal; and
- unfair termination of employments, among others.
For employees who remain unvaccinated and cannot submit a weekly negative PCR test, the only alternative is to work from home. However, it is not yet clear how this is expected to impact their employment in terms of disciplinary action. In the meantime, employers in the private sector should review their vaccination and homeworking policies (if they have one) to assess whether they give rise to any particular risks.
Expectation of increased COVID-19 related employment litigation
It is anticipated that there will be various court judgments/decisions on COVID-19 related issues and its impact to the benefits of employees in Ghana in 2022.
Under Ghana law, an employer is not permitted to create an intolerable work environment which causes the employee to resign, else risk being sued for constructive dismissal. An employer is also not permitted to unfairly terminate an employee’s employment. Currently, the mandatory vaccination policy in Ghana is likely to result in an increased number of constructive dismissal and unfair termination/dismissal claims.
Employers should consider any developments in this area, particularly whether the Government takes a formal stance on this issue by making into law, either through executive instrument or legislative instrument, the requirement for mandatory vaccination, the basis of such requirement and the impact it is expected to have on employment and in work environments. Employers should also keep abreast of any judicial decisions that may be relevant to these issues.
Anticipated prevalence of remote working
Employers may enter into private agreements with their employees to enable them work from home since there are no laws in Ghana prohibiting it and it is being done in practice. Most employees and employee associations will start advocating for the alternative of working from home if other institutions are doing it.
Employers must therefore anticipate making provisions for a shift to remote working since there is a likelihood that employees and employee associations will start advocating for this.
New law permits the President of Ghana to impose a restriction on the movement of persons
The Imposition of Restrictions Act, 2020 (Act 1012) may lead to the President of Ghana passing an Executive Instrument that will impose a restriction on the movement of persons, thereby forcing employees to work from home. If such an Executive Instrument is passed, most employees will be required to work from home.
Employers should therefore prepare for unanticipated situations where employees are required to work from home and ensure that there is infrastructure in place to support this.
KEY DEVELOPMENTS FOR 2021
Labour (Domestic Workers') Regulations, 2020 (L.I. 2408)
The Labour (Domestic Workers') Regulations, 2020 (L.I. 2408) was passed by Parliament in 2020 to regulate activities and ensure the protection of domestic workers. The law requires that an employer and a domestic worker enter into a written agreement which states the terms and conditions of the employment relationship.
National Unemployment Insurance Scheme
Due to the effect of the COVID-19 pandemic on employment, especially in relation to job losses in the formal sector, the Government of Ghana announced in 2020 its intention of creating a National Unemployment Insurance Scheme. To execute its intention, the Government has put in place a Tripartite Technical Committee to come out with the modalities for implementation of the scheme. The scheme will focus on providing direct income support to workers who lose their jobs or suffer pay cuts in the event of a social or economic crisis. The scheme will also offer opportunities for training, re-training, job search support, apprenticeship, and internships to enable those who lose their jobs to re-adjust.
Youth Employment Agency (YEA) Programs
The YEA has instituted the "Work Abroad Program," which is designed to facilitate the placement of Ghanaian youth into job vacancies existing in other countries. According to the YEA, some countries that requested for placements include Japan, Australia, and the Cayman Islands.
Review of the Labour Act 2003 (Act 651)
The Minister for Employment and Labour Relations, in consultation with the Ghana Society of the Physically Disabled, the Ghana Association of Persons with Albinism, the Ghana Burns Survivors Foundation, the Ghana National Association of the Deaf (GNAD), and the National Council for Persons with Disability (NCPD), among other stakeholders, is putting in place measures to amend the Labour Act. The reason for the proposed amendment is to broaden the scope of application of the Labour Act to encompass all forms of disabilities, including albinism. The review is also intended to create fair and inclusive employment opportunities for persons with disabilities.
KEY DEVELOPMENTS FOR 2020
Implementation of the Occupation Health Safety Bill
The Occupation Health Safety Bill (OHS Bill) is expected to be passed in 2020. When passed into law, the OHS Bill will promote health and safety in the workplace.
Institutional Inspections by the Ministry of Employment and Labour Relations
On 26 June 2020, the Ministry of Employment and Labour Relations (MELR) issued a communiqué informing employers of its decision to undertake inspections of their enterprises to ensure that effective measures are taken to protect the health of employees during the COVID-19 pandemic.
The MELR set out 10 criteria that employers must adhere to, including the creation of an isolation room for employees with COVID-19 symptoms and the training of management on the effective use of personal protective equipment.
New Insurance Bill
The new Insurance Bill, which is due to be passed by the Parliament of Ghana in 2020, will compel certain employers to take out workmen's compensation insurance for all of their employees. This is to guarantee the compensation of employees who are injured in the course of carrying out their employment duties in accordance with the Workmen's Compensation Act, 1987.
Youth Employment Programmes
The Youth Employment Agency ("YEA") recently launched Job Centre, an online platform to link job seekers to potential employers in both public and private sectors. Other initiatives of the YEA are the Artisan Directory (to train and provide tools to artisans), the Work-Abroad Programme (to enable Ghana to export young professionals to foreign countries for work purposes) and the Agriculture-based Flagship Project (to support the youth to venture into farming activities).
KEY DEVELOPMENTS FOR 2019
Petroleum commission sets out employment guidelines
The Petroleum Commission’s employment guidelines came into effect on 1 June 2018. The Guidelines seek to ensure transparency in the recruitment process for companies operating in the country’s oil and gas sector. The Guidelines covers succession planning methodology, recruitment processes, training, skills transfer and capacity building. Additionally, the Guidelines provide the criteria for how expatriates may be hired to work in Ghana and how skills transfer to local persons may be maintained.