Ghana boasts a robust legal framework governing labor relations and employment practices, primarily outlined in the Labor Act 2003 (Act 651) and its accompanying regulations. This legislation meticulously defines the concept of a “contract of employment,” explicitly incorporating an implied duty of mutual trust and confidence between employers and employees.
This comprehensive guide aims to provide an extensive overview of Ghana’s labor code, assisting companies in ensuring compliance with employment regulations during the recruitment and management of personnel.
Applicability of the Act:
The implementation of the Employment Act in Ghana encompasses various aspects, including the establishment of a minimum wage, regulation of working hours, overtime, termination procedures, and ensuring workplace health and safety. The Ministry of Employment and Labor Relations, through the Labor Department, oversees the enforcement of this Act. Simultaneously, labor organizations and unions play a pivotal role in advocating for workers’ rights and holding employers accountable.
Key points highlighted in the Ghana employment law guide include:
- Applicability to all workers and employers, excluding those in specific sectors such as the armed forces, police service, prison service, and securities intelligence agencies.
- Mandating a written employment contract for work exceeding six months within a year.
- Ensuring equal pay for equal work, regardless of distinctions.
- Requiring a minimum of 15 working days of annual leave per year of service, with companies having the flexibility to provide more.
The Ghana National Pensions Act, 2008 (Act 766), addresses the administration of Ghana’s Basic National Social Security Scheme, with employers contributing 13.0% of the basic salary.
Employment Contract:
In Ghana, a written employment contract is obligatory for work lasting six months or the equivalent of 6 working days. The Labor Act No. 651 of 2003 consolidates and modernizes previous labor legislations, aligning them with ratified International Labour Organization (ILO) Conventions.
The contract, whether written or oral, should explicitly outline the rights and obligations of both parties. Within two months of employment commencement, the employer must provide a written statement detailing crucial terms such as job title, remuneration, working hours, and other relevant employment terms.
Types of Employment Contracts:
- Permanent Employment: Mandates a written contract within two months of the start date, covering essential details for continuous employment until the age of 60. Foreign workers require a work permit obtained through the Ghana Immigration Service.
- Casual Employment: Governs informal jobs, applicable for up to six months with daily remuneration. Casual job opportunities are prevalent in Ghana, with the Ghana Revenue Authority providing PAYE information for casual workers.
- Temporary Employment: Entitles workers to the minimum wage, specific working hours, rest periods, paid public holidays, compensation for night work, and sick leave, irrespective of prior agreements.
Key Provisions of the Act:
The Constitution of Ghana and the Labor Act establish provisions to regulate employment, covering areas such as public and private employment centers, discrimination prevention, minimum wage levels, fair termination, equal employment opportunities, and the creation of a National Labour Commission.
Additional Factors:
- Minimum Wage: Set at 14.88 cedis daily, effective January 1, 2023.
- Work Hours: Maximum 8 hours per day with mandatory daily and weekly rest periods.
- Severance Pay: Negotiable between employer and employee; governed by labor laws.
- Maternity Leave: 12 weeks at 100% regular pay, extended to 14 weeks in specific cases. One hour of leave per day for nursing mothers post-maternity leave.
Penalties:
Non-compliance with the Labor Code may result in penalties, including fines and compensation for losses. Employers unlawfully employing foreign workers face fines, while foreign workers without proper authorization are also subject to penalties.
Compliance Strategies for Employers:
Employers should conduct regular compliance audits to identify and mitigate risks. Compliance with rules for employing foreign workers is crucial, and entities must maintain good standing with relevant authorities.
HRLeverage’s Role in Ensuring Compliance
Let HRLeverage guide you in creating an environment where your team thrives both personally and professionally. Connect with us today to embark on a journey toward enhanced employee well-being, engagement and overall success. Reach out to us at info@hrleverageafrica.com and let’s start building a workplace where balance isn’t just a goal – it’s a reality.