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OVERVIEW
Employment issues in Ghana is regulated and governed by the Labour Act, 2003 (Act 651). The
Labour Act, Act 651 applies to all workers and to all employers except those in the security services
who are under the Security and Intelligence Agencies Act 1996 (Act 526).
4. TERMINATION OF CONTRACT FOR SERVICE
The Labour Act, Act 651 sets the grounds for termination of employment as follows; 1
1. By mutual agreement between the employer and the worker
2. By the worker on grounds of ill-treatment or sexual harassment
 Sec. 15 of Act 651

3. By the employer on the death of the worker before the expiration of the period of
employment
4. By the employer if the worker is found on medical examination to be unfit for employment
5. By the employer because of the inability of the worker to carry out his work due to
i. Sickness or accident; or
ii. The incompetence of the worker;
iii. Proven misconduct
6. Due to legal restriction imposed on the worker prohibiting the worker from performing the
work for which he or she is employed
7. For economic reason (redundancy)
The law stipulates that notice should be in writing and given in matters of termination are in the
manner infra; 2
1. In the case of a contract of three years or more, one month’s notice or one month’s pay in
lieu of notice;
2. In the case of a contract less than three years, two weeks’ notice or two weeks’ pay in lieu of
notice; or
3. In the case of contract from week to week, seven days’ notice
It is important to note that the day of notice is included in the notice period. Also the procedure
above does not apply where the contract or agreement between the employer and the worker have
express provisions which relates to termination are in favour of the worker.
In the case of dismissals due to redundancy, the law provides that where the worker becomes
unemployed or where the worker suffers any diminution in the terms and conditions of employment
(measured by past services and accumulated benefits), such worker is entitled to compensation
(“redundancy pay”). The terms and conditions of redundancy pay are subject to negotiation between
the employer and the worker or the trade union concerned. 3
Under Act 651, there are grounds considered as unfair termination of employment. These grounds
are as follows; 4
● That the worker has joined or intends to join or has ceased to be a member of a trade union
or intends to take part in the activities of a trade union
2 Sec 17 of Labour Act, 2003 (Act 651)
3 sec. 65 of Labour Act, 2003 (Act 651)
4 Sec. 63 of Act 651

● That the worker seeks office as, or is acting or has acted in the capacity of a worker
representative
● That the worker has filed a complaint or participated in proceedings against the employer
involving alleged violation of this Act or any other enactment
● The worker’s gender, race, colour, ethnicity, origin, religion, creed, social, political or
economic status has been discriminated against
● In the case of a woman worker, due to the pregnancy of the worker or the absence of the
worker from work during maternity leave
● In the case of a worker with a disability, due to the worker’s disability
● That the worker is temporarily ill or injured and this is certified by a recognized medical
practitioner;
● That the worker does not possess the current level of qualification required in relation to the
work for which the worker was employed which differs from the level of qualification
required at the commencement of his or her employment
● That the worker refused or indicated an intention to refuse to do any work normally done by
a worker who at the time was taking part in a lawful strike unless the work is necessary for
the maintenance of plant and equipment.
It is imperative to note that where the dismissal is as a result of misconduct by the worker, the
position of the law is that he should be given fair hearing as held in the case of Lagudah v Ghana
Commercial Bank. 5 This was espoused in the case of Ghana Commercial Bank v Aboagye. 6 In
that case, the court held that the conduct of an employee ought to be compatible with the faithful
discharge of his duty and should not be injurious to the employer’s business.

CONCLUSION
With the foregoing, the regulatory framework of termination of contract for service in Ghana, is the
Labour Act, 2003 (Act 651). The law provides the basis for termination and dismissal. It should be
emphasized that where dismissal is predicated on misconduct of the employee, he should be a given
fair hearing.