Rivermate | Ghana flag


Dispute Resolution and Legal Compliance

Understand dispute resolution mechanisms and legal compliance in Ghana

Labor courts and arbitration panels

Ghana has a unique court structure specifically designed to address employment-related disputes. Known as the Labor Division of the High Court, it operates with its own set of distinct procedures.

Jurisdiction of Labor Courts

Labor courts in Ghana handle a broad spectrum of labor disputes. These include wrongful dismissal and termination issues, disputes arising from employment contracts, wage, salary, and benefits disputes, discrimination and harassment claims, and social security and pension disputes.

Process in Labor Courts

The process in labor courts begins with filing a claim, which is initiated by filing a writ of summons within the Labor Court. The court may encourage mediation as an attempt to resolve the dispute amicably before a full trial. If mediation fails, a formal hearing is held with evidence presentation, legal arguments, and witness examination. The labor court judge then issues a decision, which may be appealed to a higher court.

The Courts Act, 1993 (Act 459) is the primary legal framework governing the structure, jurisdiction, and procedures of labor courts in Ghana. The Labour Act, 2003 (Act 651) is the substantive labor law covering employment rights and obligations, used in resolving cases before the labor courts.

Arbitration in Ghana

Arbitration serves as an alternative or a supplementary method of resolving labor disputes in Ghana. It is a voluntary process that requires agreement between the parties, either through a pre-existing clause in the employment contract or a subsequent agreement to arbitrate. The National Labour Commission (NLC) often acts as a mediator and can facilitate arbitration if the parties involved agree. The Arbitration Act, 2010 (Act 798) provides a legal framework for arbitration in Ghana, including in labor disputes.

Advantages of Arbitration

Arbitration offers several advantages. Parties can tailor procedures to suit their specific dispute, making it potentially less formal than court processes. Arbitrators can be selected with expertise in labor law and specific industries. Arbitration proceedings are generally confidential. Additionally, arbitration can sometimes be faster than litigation through labor courts.

Compliance audits and inspections

In Ghana, a variety of regulatory bodies are employed to ensure businesses adhere to the necessary laws and standards.

Key Regulatory Authorities

Several governmental agencies are tasked with conducting audits and inspections within their respective areas of authority:

  • Labour Department (under the Ministry of Employment and Labour Relations): This department inspects workplaces to ensure compliance with labor laws and regulations, including those on working conditions, minimum wage, and social security contributions.
  • Environmental Protection Agency (EPA): The EPA conducts environmental audits and inspections to enforce environmental laws and regulations.
  • Ghana Revenue Authority (GRA): The GRA conducts tax audits and inspections to ensure compliance with tax laws.
  • Factories Inspectorate Department: This department enforces health and safety regulations in factories and other industrial workplaces.
  • Minerals Commission: This commission conducts inspections of mining operations to ensure compliance with mining laws and safety regulations.

Inspection Frequency

The frequency of inspections in Ghana is dependent on several factors:

  • Industry and Risk Profile: Industries with higher risks, such as construction and mining, may face more frequent inspections.
  • Complaint-Driven: Inspections can be triggered by complaints from employees, the public, or reports from other agencies.
  • History of Non-Compliance: Businesses with a history of violations might be subjected to greater scrutiny.

The Inspection Process

The general steps involved in a compliance inspection typically include:

  1. Notification: Inspectors may provide notice, though unannounced inspections can occur.
  2. Document Review: Inspectors examine records, permits, licenses, and other documents relevant to the area of inspection.
  3. On-site Walkthrough: This involves physical inspections of facilities, equipment, and observation of work processes.
  4. Interviews: Inspectors may interview employees or management to gather further information.
  5. Report: The inspector prepares a report detailing their findings and any observed areas of non-compliance.
  6. Corrective Actions: Non-compliant businesses may be given a timeframe to rectify identified issues.

Importance of Compliance Inspections

  • Maintaining Standards: Regular inspections protect workers, consumers, and the environment by ensuring businesses adhere to relevant laws and regulations.
  • Promoting Fairness: Inspections help foster fair competition and prevent businesses from gaining an unfair advantage by disregarding regulations.
  • Deterrence: Knowledge of potential audits and inspections serves as a strong deterrent for non-compliant behavior.
  • Improvement: Inspections can highlight areas where businesses can improve their operations, ultimately helping them become more efficient and compliant.

Consequences of Non-Compliance

Failure to comply with regulations in Ghana can result in severe repercussions:

  • Fines and Penalties: Regulatory agencies can impose substantial fines for violations.
  • Remedial Orders: Businesses might be ordered to make immediate changes or rectify any non-compliance, potentially leading to costly changes in procedures.
  • Temporary or Permanent Closure: In serious cases, businesses may face temporary suspension or even permanent closure of operations.
  • License/Permit Revocation: Licenses or permits essential for operation may be suspended or revoked due to non-compliance.
  • Criminal Prosecution: Certain violations carry the risk of criminal charges, potentially leading to imprisonment for individuals involved.
  • Reputational Damage: Public exposure of non-compliance can severely tarnish a business's reputation.

Reporting and whistleblower protections

In Ghana, there are several avenues for individuals to report misconduct, regulatory breaches, and other unlawful activities. These can be broadly categorized into internal and external reporting mechanisms.

Internal Reporting

Internal reporting mechanisms primarily involve the organization where the individual is employed. Ideally, organizations should have internal whistleblowing procedures that encourage employees to report concerns through designated channels within the company. In cases where no formal procedures exist, employees may report issues directly to supervisors, HR, or other appropriate representatives within their organization.

External Reporting

External reporting mechanisms involve entities outside the individual's organization. Violations concerning specific industries should be reported directly to the relevant regulatory body. For serious offenses, particularly those of a criminal nature, reporting directly to the police or relevant investigative bodies is essential. The Commission on Human Rights and Administrative Justice (CHRAJ) has a mandate to investigate corruption and administrative abuses, providing a potential avenue for whistleblowers. Additionally, NGOs with specific areas of focus may have reporting mechanisms for related concerns.

Whistleblower Protections in Ghana

Ghana has a dedicated law aimed at safeguarding whistleblowers: the Whistleblower Act, 2006 (Act 720). This Act provides a legal framework for disclosing impropriety and offers protection against victimization of whistleblowers.

Key Protections

The Act prohibits a wide range of retaliatory actions against whistleblowers, including dismissal, demotion, harassment, discrimination, and other disadvantages. Whistleblowers who suffer retaliation may be entitled to reinstatement, compensation, or other remedies. The law also seeks to protect the whistleblower's identity unless disclosure is necessary for legal proceedings or with the whistleblower's consent.

Limitations and Practical Considerations

The protections primarily apply to disclosures made in good faith and where the whistleblower reasonably believes the information to be true. The Act lists specific bodies for reporting different types of impropriety, so knowing the right channel is crucial. While the law offers protection, the whistleblower may still need to provide evidence if their claims are challenged or they face retaliation.

Practical Considerations for Whistleblowers

Whistleblowers should gather evidence to substantiate any potential future claim of retaliation. They should familiarize themselves with internal company policies, the specific reporting channels outlined in the Whistleblower Act, and any other relevant NGO mechanisms. It might also be helpful to consult with an attorney or an organization specializing in whistleblower support to get the best advice before acting.

International labor standards compliance

Ghana is a member of the International Labour Organization (ILO) and has shown a commitment to upholding international labor rights principles. The country has ratified all eight fundamental ILO conventions, which include the Freedom of Association and Protection of the Right to Organise Convention, the Right to Organise and Collective Bargaining Convention, the Forced Labour Convention, the Abolition of Forced Labour Convention, the Minimum Age Convention, the Worst Forms of Child Labour Convention, the Equal Remuneration Convention, and the Discrimination (Employment and Occupation) Convention.

Alignment of Domestic Law with International Standards

Ghana's domestic labor laws reflect the principles enshrined within these core ILO conventions. The 1992 Constitution of Ghana, for example, enshrines fundamental human rights, including those related to labor such as the freedom of association. The Labour Act of 2003, which is the cornerstone of Ghanaian labor legislation, incorporates provisions on freedom of association, collective bargaining rights, the prohibition of forced labor and child labor, and safeguards against discrimination. The Children's Act of 1998 reinforces the prohibition of child labor and provides protections for children in the workplace.

Other Relevant ILO Conventions

In addition to the core conventions, Ghana has ratified numerous other ILO conventions addressing areas such as occupational safety and health, social security, and maternity protection.

Monitoring and Enforcement

To uphold its international labor obligations, Ghana employs several mechanisms. The Labour Department inspects workplaces and investigates potential violations of labor laws, including those pertaining to international standards. The National Labour Commission (NLC), a tripartite body consisting of the government, employers, and workers, is responsible for resolving labor disputes and promoting compliance. Furthermore, Ghana submits regular reports to the ILO on its implementation of ratified conventions.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.