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With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance in Ghana. 

01 Overview of the Labor Law System

1.Legal System

The Ghanaian jurisdiction operates under the common law legal system.

2.Resources and Agencies

The main statute and regulations relating to employment in Ghana, are the Labour Act, 2003 (Act 651) and the Labour Regulations 2007 (L.I. 1833).

The Ministry of Employment and Labour Relations sets national labour policy and coordinates enforcement. The Labour Department carries out inspections, registers unions, and monitors workplace practices. The National Labour Commission resolves disputes and enforces rulings under the Labour Act. The Factories Inspectorate ensures compliance with occupational health and safety standards. 

02 Employment Qualifications and Classification

1.Employment Age

In Ghana, the minimum employment age is 15 years. However, where the nature of the work is dangerous, a person may only engage in hazardous work at 18 years and above, with “hazardous work” defined as work dangerous to health, safety, or morals. Employment relationships generally end at 60 years, which is the compulsory retirement age under the National Pensions Act, 2008.

2.Qualifications for Employment

A foreign business is generally not allowed to hire locally in Ghana without establishing a permanent presence, such as a representative office, branch, subsidiary, or other recognized local entity.

For employment, the Labour Regulations, 2007 (L.I. 1833) stipulates that proper documentation and approval from the Chief Labour Officer are required for foreign contracts, and the corporate background of the employer must be verified.

3.Classification of Employment

The types of employment relationships recognized in Ghana include:

i. Employee (Contract of Service)

ii. Independent Contractor (Contract for Services)

iii. Labour Dispatch/Agency Worker

iv. Outsourcing

v. Employer of Record (EOR)

vi. Task Worker

vii. 人Domestic Worker

viii. Temporary, Part-time, Casual, and Permanent Employment

Ghana’s labour law recognizes three distinct categories of employment: casual workers, temporary workers, and permanent workers.

4.Foreign Workers

Under the Labour Regulations, 2007 (L.I. 1833), an employer cannot engage a worker under a foreign contract without proper documentation, and such contracts are generally valid for no more than one year unless the Chief Labour Officer grants written permission for up to two years . Foreign contracts must be forwarded to relevant government ministries, and employers must pay a capitation fee for each foreign worker, as determined by the Minister in consultation with the Chief Labour Officer. 

03 Recruitment and Employment Contracts

1.Background Examination

In general, there are no explicit legal restrictions preventing employers from conducting background checks on job applicants.

2.Contract Types

Ghana’s Labour Act, 2003 (Act 651) provides for different types of employment contracts, each suited to specific circumstances.

3.Probationary Period

Probationers are entitled to basic benefits, including payment of wages or salary and notice of termination, unless the contract or applicable regulations specify otherwise. The length of probation must be reasonable. Notice requirements during probation vary: some regulations require written notice or payment in lieu of notice. Probationers may be dismissed more easily than confirmed employees, but not “with impunity”, the dismissal must comply with contractual or statutory grounds.

04 Working Standards

1.Remuneration and Statutory Benefits

The minimum wage is a “national daily minimum wage”, which is not subject to regional or provincial differences.

Payment of salaries is generally arranged monthly, as supported by definitions in case law and statutory regulations, which describe salary as a monthly or quarterly payment for regular employment.

2.Social Security and Employment Taxes

Statutory employee benefits in Ghana primarily include social security contributions, which are mandated by law for employees and paid annual leave.

3.Working Hours

The statutory types of working hours in Ghana are primarily governed by the Labour Act, 2003 (Act 651). The law allows for standard, flexible, and shift- based (irregular) working hour systems, provided the total working hours and rest periods comply with the Act .

There is no statutory specified rate of pay for overtime. The fixing of overtime pay rate, in practice, is in accordance with Article 6 of ILO Convention No.1 and Article 7 (4) of ILO Convention No. 30. Generally, the specific pay rate for overtime is a policy of the employer or where there is unionized labour, it is fixed by an agreement between the union and the employer, which is spelt out in a collective bargaining agreement.

4.Rest and Leave

The Labour Act under Section 42 provides for weekly rest periods, requiring a rest period of forty-eight consecutive hours in every seven days of normal working hours, typically from Saturday to Sunday.

05 Occupational Health and Special Protection

1.Occupational Health and Security

There are minimum occupational health and safety requirements that employers must abide by. Employers in Ghana are required under the Labour Act, 2003 (Act 651) and the Factories, Offices and Shops Act, 1970 (Act 328) to ensure the health, safety, and welfare of employees at the workplace.

2.Special Protection

Ghanaian law provides special protections and assertive actions for specific groups of workers, including women, elder workers, persons with disabilities, and other vulnerable groups.

The Labour Act, 2003 (Act 651) prohibits unfair termination based on gender, pregnancy, disability, race, ethnicity, religion, or social status, and specifically protects women from dismissal due to pregnancy or maternity leave, and workers with disabilities from termination due to their disability.

06 Personal Information and Privacy

1.General Rules

In Ghana, employee privacy and the handling of personal data are governed by the Data Protection Act, 2012 (Act 843). This legislation establishes a comprehensive framework for how employers, classified as data controllers, must collect, process, store, and protect personal information belonging to employees and job applicants.

2.Transnational Transfer

The transnational transfer of employees’ personal information is governed primarily by the Data Protection Act, 2012 (Act 843). 

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Employers are legally obligated to maintain a workplace that is safe, respectful, and free from discrimination or harassment. They must take proactive steps to prevent misconduct, respond promptly to complaints, and ensure that any violations are thoroughly investigated. When misconduct is confirmed, employers are required to take appropriate corrective action, including disciplinary measures.

2.Protective Characters

The 1992 Constitution protects sex/gender, race, colour, ethnic origin, religion, creed, social/economic status; while the Labour Act’s non-discrimination clause covers employment decisions; and the Persons with Disabilities Act protects disability.

08 Internal Policies

1.Applicability

Internal HR policies (handbooks, codes of conduct, anti-harassment, data protection notices, IT use) are customary and often referenced in collective agreements (CBA contents can include probation, hours, leave, discipline, termination, dispute procedures).

2.Validity

In unionized environments, some policies may require negotiation or consent before implementation.

3.Whistleblowing

The Whistleblower Act, 2006 (Act 720) protects disclosures of impropriety made to specified bodies by whistleblowers. These workers are protected from civil or criminal proceedings for those disclosures, as well as victimization and dismissal.

09 Transactions

1.Employment Relationship

Statutory provisions, such as the Labour Act, 2003 (Act 651), require that employment contracts express the rights and obligations of the parties clearly. In cases of organizational restructuring or transfer, accrued benefits and past services must be preserved, and employees should not suffer a diminution in their terms and conditions of employment.

2.Compensation

Employees’entitlement to compensation due to mergers and acquisitions (M&A), equity, or asset transfers depends on whether the transaction results in a severance of employment or a diminution in terms and conditions. Redundancy compensation is only triggered if the restructuring or transfer results in actual termination or redundancy.

10 Termination of Employment

1.Termination Grounds

An employer may not dismiss an employee for any reason; there must be a fair and lawful cause for dismissal or termination. Under the Labour Act, 2003 (Act 651), the employment of a worker shall not be unfairly terminated by the employer, and specific grounds are provided for fair termination.

2.Termination Procedure

Under Ghana’s Labour Act, 2003 (Act 651), employers are generally required to give prior notice before terminating an employment contract. The length of the notice period depends on the nature and duration of the employment.

However, there are specific circumstances under which an employer may dismiss an employee without notice or payment in lieu. These include cases of gross misconduct, such as theft, violence, serious insubordination, or any act that fundamentally breaches the employment contract. In such cases, the employer must be able to substantiate the misconduct through a fair process, typically involving investigation or disciplinary hearing, to avoid claims of unfair dismissal. or termination due to the death of the employee or dissolution of the employer’s business.

3.Termination Protection

Dismissal must be based on lawful and justifiable grounds. Employees cannot be dismissed for reasons that are discriminatory, retaliatory, or in violation of their rights under the law. For example, dismissal based on gender, race, religion, union membership, or political affiliation is prohibited. Workers are also protected from dismissal for filing complaints, participating in lawful strikes, or cooperating with investigations into workplace misconduct.

4.Severance and Compensation

The Labour Act does not establish a general right to severance (also called redundancy pay) pay upon termination of employment. Under the Act, the right to severance pay is applicable in specific instances.

The Act requires employers to consult with the relevant trade union and negotiate measures to mitigate the adverse effects, including the payment of redundancy pay. The amount and terms of redundancy pay are not fixed by statute but are subject to negotiation between the employer (or their representative) and the worker (or trade union).

5.Wrongful Termination

When a termination is found to be unlawful or unfair, meaning it lacked just cause, violated due process, or breached contractual terms, the National Labour Commission (NLC) or the courts may order reinstatement or re-engagement of the employee.

6.Mass termination and Layoffs

Mass termination, particularly due to redundancy, is regulated under Section 65 of the Labour Act, 2003 (Act 651). Employers must consult affected employees or their representatives and negotiate severance pay. There is no statutory formula for severance, but it must be fair and reasonable. Notification to the Chief Labour Officer is required.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

Confidentiality agreements are not mandatory under Ghanaian law but are commonly used in employment contracts, especially for employees who handle sensitive business information. These typically include senior management, finance personnel, legal advisors, IT staff, and others with access to proprietary data. Such clauses are enforceable if they are reasonable in scope and duration.

2.Non-Compete and Non-Solicitation

Non-compete and non-solicitation clauses are legally permissible in Ghana but must be carefully drafted to avoid being overly restrictive. Courts assess their validity based on whether they protect legitimate business interests without unfairly limiting the employee’s right to work. 

12 Work Representation and Trade Unions

1.Work Representation

Ghanaian law allows the formation of employee representatives and trade unions under Sections 79 to 95 of the Labour Act. While there is no mandatory requirement for work councils, employees may organize through unions or elected representatives to engage in collective bargaining, participate in dispute resolution, and represent workers in disciplinary or redundancy matters.

2.Trade Unions

In Ghana, trade unions exist at the enterprise level, sector level, and as affiliates of national bodies like the Trades Union Congress. They have rights to freely associate, bargain collectively, protect members from discrimination, and take industrial action. To qualify for collective bargaining, a union must be registered with the Chief Labour Officer and represent a significant portion of the workforce. 

13 Dispute Resolution

1.Procedures & Enforcement

Labour disputes in Ghana are resolved through a structured process that includes internal grievance procedures, mediation, arbitration by the National Labour Commission (NLC), and litigation in the Labour Division of the High Court. NLC decisions are binding and enforceable.

2.Waiver & Enforcement

Employees cannot waive statutory rights under the Labour Act. Any contractual clause attempting to do so is void to the extent it conflicts with the law. 

14 Others

1.Latest Development & Trends

Recent developments in Ghana’s labour landscape include proposed amendments to the Labour Act that would extend maternity leave and introduce paid paternity leave. The Affirmative Action Act, passed in 2024, mandates gender equity policies and penalizes discriminatory practices. 

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Victoria Barth is the Managing Partner and Head of Litigation and Dispute Resolution at Sam Okudzeto & Associates, one of Ghana’s leading law firms. Her primary areas of expertise include civil litigation, labour law, property law, estates and wills, and banking and insurance. 

Isaac Aburam Lartey is a Senior Associate at Sam Okudzeto & Associates, where he specializes in dispute resolution, labour law, and construction law.

Kofi Elikem Ashiadey is a Pupil at Sam Okudzeto & Associates, where his practice focuses on litigation and dispute resolution. 

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.