THE LABOUR ACT AND IN HOUSE POLCY DRAFTING

The Labour Act, 2003 (Act 651) serves as guide for the drafting of in-house policies on various
employment issues such as setting a minimum wage, regulating working hours, overtime,
termination of employment, and ensuring workplace health and safety. Below are key areas in
the Act which should be considered in policy making.
Employment Contract
Section 12 of the Labour Act states that a written employment contract is required for work done
for six months or the sum of working days equivalent to 6 months.
An employment contract according to a section 13, can be written or oral, and it should clearly
outline the employer and employee’s rights and obligations. After the employment begins, the
employer must provide a written statement detailing the main terms of the employment contract
within two months. This statement should include essential details such as job title,
remuneration, working hours, and other relevant terms of employment.
The employment contract terms are negotiable, and employees can negotiate the contract offer
when offered employment. There are three basic types of employment contracts in Ghana:
permanent employment, casual employment, and temporary employment:
Permanent employment
In Ghana, it is mandatory for employers to provide a written employment contract within two
months of the employee’s start date. This contract should contain important details such as the
worker and employer’s information, wage rate, job title and payment interval, work hours,
annual leave, overtime payment, incapacity for work due to injury or sickness, and length of
termination notice required by both parties.
The employment contract should be for a continuous period until the employee reaches 60.
Foreigners who want to work in Ghana must obtain a work permit, which requires the sponsoring
company to apply to the Ghana Immigration Service (GIS) and provide sufficient justification
for the foreign worker’s employment.
Casual employment
The Labor Act governs informal jobs in Ghana, which applies to all workers and employers
except those in the armed forces, police service, prison service, and securities intelligence
agencies. Section 74 states that casual workers are those engaged in seasonal or intermittent
work for up to six months, with remuneration calculated daily.
Temporary employment
Section 75 provides that a temporary worker who is employed by the same employer for a
continuous period of six months and more shall be treated as a permanent worker. In Ghana,
temporary workers are entitled to receive the minimum wage and have specific working hours,
rest periods, paid public holidays, compensation for working at night, and sick leave, as stated in
the Act. This is applicable regardless of any terms that might have been previously agreed upon
by both parties.
Ghana’s minimum wage is GHS 18.15 daily, effective January 1, 2024. There has been an
increase as compared to last year’s minimum salary of 13.53 cedis. The minimum wage is
mandated by law, and every worker in Ghana can be paid at least this statutory minimum salary.
The Act also provides formulae for the calculation of the wages of temporary and casual workers
under section 76.
WEEK DAYS ONLY per 7 DAY WEEK per month
month
TEMPORARY Daily wage x 27 Daily wage x
365 divided by 12
CASUAL

Recommendation
An in house policy on employment should differentiate between the different types of
employment and also include the mandatory terms. Remuneration, work hours, overtime pay,
leave days should be stated in the contract.
The minimum wage of each type of worker may be stated subject to the national minimum wage.
The formulae for calculating wages can be included.
Work hours
Sections 33 to 39 of the Labour Act cover hours of work. As per the Ghana Labor Law, the
maximum allowable working hours for an employee are 8 hours per day. The law also mandates
a daily rest period of at least 12 consecutive hours between two successive working days and a
weekly rest period of 48 consecutive hours every seven days of regular working hours. Workers
in an undertaking (business) may not be required to work overtime if there are no fixed rates.
Overtime is defined as work done after the fixed hours of work. A worker shall not be compelled
to do overtime work except for undertakings or enterprises the very nature of which requires
overtime in order to be viable; or which are subject to emergencies that require that workers
engage in overtime work in order to prevent or avoid threat to life and property. A worker may
be required to work beyond the fixed hours of work without additional pay in certain exceptional
circumstances.
Recommendation
The company may have a policy to address overtime rates. This may be done per hourly.
The time for start and close of work should be stated. If due to emergencies or exceptional
circumstances one would like to move their working time, a procedure may be provided to allow
such.
The company may state the exceptional circumstances under which a worker may be required to
work without overtime pay.
Severance Pay
In Ghana, there is no fixed method for determining severance pay, as it is typically subject to
negotiation between an employer and employee or labor union. Ghana labor laws dictate that
individuals who have their employment terminated are eligible for compensation, including
severance pay. The law on termination of employment is regulated by the Labor Act of 2003
which requires remuneration and compensation. However, there is no severance pay available in
situations where a worker is terminated for non-economic reasons on an individual basis.
Recommendation:
The company is therefore allowed to decide on how severance pay is paid. The formula is
usually tied to ones position in the office and therefore may be differentiate on such basis. It may
be as below:
 The entry-level employees might be given one week of pay per year worked, while
senior-level employees might be offered a month of pay for every year of service.
 Mid-level employees might expect two to three weeks, while CEOs and other C-suite
employees may expect even more compensation.
Suggested formula by INTOO Global
[Employee's weekly salary] x [Number of weeks] (Number of years) = Total severance
allowance.
Maternity leave and work of pregnant women and mothers:
According to Section 57 pregnant employees is entitled to at least 12 weeks paid maternity leave
at of their full regular pay. In the case of multiple or complicated births, maternity leave is
extended to 14 weeks. Following maternity leave, a woman is entitled to one hour of leave
during the workday to nurse her child until the child reaches the age of one. This provision aims
to promote and support maternal and child health in the workplace.
Section 55 further provides that unless with her consent, an employer shall not assign or employ
a pregnant woman worker to do any night work between the hours of ten O’clock in the evening
and seven O’clock in the morning; and engage for overtime a pregnant woman worker or a
mother of a child of less than eight months old. The pregnant woman worker or the mother may
present a written complaint to the National Labour Commission established under section 135
against an employer who contravenes. The Commission shall investigate the complaint and its
decision on the matter shall subject to any other law be final.
Annual leave and sick leave are different from maternity leave. A woman may extend leave if
medically certified.
The National Service Act, 1980 (Act 426) also allows for personnel to go for maternity leave.
Section 5 provides that she would be required to serve for three additional months to make up for
the period of service lost. Heads of user-agencies and employers are expected to inform both the
Executive Director and the Regional Directors of the Scheme before anyone proceeds on
maternity leave and on resumption of duty. While on maternity leave they will not be paid
allowances.
Recommendation
 An in-house policy would have to have the minimum number of weeks for maternity
leave.
 As the company has retainer services of various hospitals, a requirement for extension of
maternity leave to medically certify by a medical practitioner belonging to any of these
hospitals.
 The policy may state the rights the employee is entitle to and also inform them of the
right to make complaints in the event that the company fails to comply. A complaint
mechanism may be put in place to ensure that issues can be handled internally.
 Though there is no mention of paternity leave the labour it is to the discretion of the
company to decide on whether to implement it. The Public Service Commission in the
Human Resource Management Policy Framework and Manual (HRMPF&M) for the
Ghana Public Services suggest five days paid leave to new fathers upon proof of birth.
 The policy also include some rules concerning pregnant National Service Personnel.
Vacation time:
Sections 20 to 32 state to the effect that employees are entitled to at least 15 working days of
paid annual leave after completing 12 months of continuous service. Employee are entitled to
uninterrupted leave but may be asked to come to work in case of necessity. Public holidays
cannot be deducted from annual leave. Sickness, communal work, civic duties, special leave
would not be deducted from annual leave. It should be noted that agreements to forgo leave is
void.
National Service Personnel under the National Service Act, 1980 (Act 426) are entitled to a one-
month terminal leave in any normal service year. If for any reason User-agencies are unable to
allow national service personnel to enjoy annual leave, the organizations shall arrange to pay one
month’s allowance, in lieu of the leave, from their own resources.
Recommendations:
A policy for vacation time and annual leave should include the following.
  Worker may take leave in two equal parts. Workers are not allowed to forgo their
leave in exchange for remuneration or compensation.
 The scope of what would constitute communal work and civic duties.
 The grounds for interrupting leave days may be stated.
 A required notice for one to take unscheduled leave.
 The number of persons who can take leave at a time. This can be done according
to departments.
 The date for National Service Personnel to take their leave.
The offence of sexual harassment.
Section 175 defines it as “any unwelcome, offensive or inopportune sexual advances or request
made by an employer or superior officer or a co-worker to a worker, whether the worker is a man
or a woman”.
The Act only provides for sexual harassment as a ground for termination of a contract. However
a policy for the reporting and handling of sexual harassment is needed. This may include the
following:
 Definition of sexual harassment, to include physical, verbal and nonverbal
conduct and gender neutrality.
 Scope of persons affected; to include clients, employee, casual workers, visitors
and contractors.
 Declaration that sexual harassment is prohibited whether it takes place within
company premises or outside, including at social events, business trips, training
sessions or conferences sponsored by the company.
 Also state a clear complaint procedure allowing for a formal and informal
mechanisms. This allows for an employee to handle the issue how the feel
comfortable with.
Sanctions and disciplinary measures should be included. These may include verbal or written
warning, adverse performance evaluation, reduction in wages, transfer, demotion, suspension,
dismissal.
Disability
Part V of the Labour Act protects workers with disabilities. This part is read in conjunction with
the Persons with disabilities Act (Act 751). Section 46 offers special incentives for the
employment of persons with disabilities, and section 53 places special emphasis in training and
retraining to enable the worker to cope with any aspect of the job. A person who becomes
disabled will not lose his employment if he can be placed in a position with the same undertaking
or a corresponding job. If such cannot be found the employment may be terminated by notice of
less than a month.
Recommendations:
An in house policy concerning retention and termination of employees with disability should be
passed. This is to provide a clear framework for handling employees which fall under section 50
of Act 651 and section 12 of Act 751. A clear definition of who considered as a disabled person
suffering from an impairment.
As an employer, the company should take reasonable steps to ensure:
 Recruitment processes and terms of employment do not discriminate for reasons related
to disability;
 Stages of employment (e.g. Opportunities offered for promotion, transfer, training or
other benefits) are the same for all employees;
 Take reasonable steps so a disabled person is not put at a disadvantage because of their
disability (e.g. Flexible working, provide specialist equipment, reorganize the working
environment).
 Including any relief which the employee is entitled to under the Workmen’s
Compensation Law, 1987 (PNDCL 187). PNDCL 187 provides for disfiguring injuries,
fatal cases permanent total or partial incapacity.
To conclude, ti s necessary to implement policies on these key areas. The recommendations
made could be modified, expatiated and included in such policies.