Navigating COVID-19 – Your Legal Employment Strategies
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Navigating COVID-19 – Your Legal Employment Strategies

With the World Health Organization (WHO) declaring Coronavirus (COVID-19) as a global pandemic, various degrees of disruptions for businesses and their workforce have come into focus.

As guidance from the Government rapidly changes, most businesses in Ghana are adjusting to a large proportion of their workforce working remotely, temporary closure of business, modification of operation to reduce Employee workload and working hours and/or time-off as paid leave or unpaid leave as the case may be. In further steering these unchartered waters, key Employer considerations will include the strategies to reduce cost to business and guaranteeing the rights of Employees.

Although some businesses may already have crisis management / contingency plans in place in the form of human resources policies on sick leave or remote working for example, adjustments may have to be made to such policies, with this unprecedented set of circumstances.

In general terms however, an employment relationship is governed under contract, and where an unforeseen external event (such as the outbreak of a pandemic like COVID-19) occurs, making the contract incapable of performance, the parties may rely on a pre-existing force majeure provision within the contract for the suspension or termination of the employment. Some contracts may go further to include clauses that permit variations and renegotiation of terms to suit various scenarios.

Where Employees are members of a trade union, which has a collective agreement[1] in place, the collective agreement may contain relevant terms to the negotiation. It is important to note that such terms will supersede any pre-existing contract of employment between the Employer and Employee (unless the contract of employment has more favorable terms to the Employee)[2].

This note assumes a context of a generic employment contract without a force majeure clause or a collective agreement. It seeks to address some of the issues pertaining to the relationship between the Employer and their Employee, in relation to working arrangements per the Ghanaian law, but it is not intended to be a substitute for legal advice as each Employer’s circumstances are different.

The Ghanaian law prescribes three main types of Employees categorized as, casual workers, temporary workers or permanent workers.

A casual worker is employed on a seasonal or intermittent basis and not for a continuous period of more than six months. A temporary worker is employed for a period of more than one month but not a seasonal worker. All employment contracts (excluding casual and temporary workers) must be in writing, outlining clearly the rights and obligations of the Employer and Employee, the terms and conditions of employment.

For the purposes of this analysis however, we will focus our attention on employment contracts for permanent Employees; workers employed on a continuous basis for a period exceeding six months.

Depending on the nature of the business, the following actions may be considered by the ‘generic employer’ in the midst of the Covid-19 outbreak, pursuant to Ghanaian employment law.

 

A. Temporary Closure of Business

i. Special Leave Without Pay

This proposes an arrangement in which the business temporarily ceases operations and Employees are not remunerated until business operations resume. For example, where an Airline ceases operation due to closure of national borders. Such a period of leave does not constitute part of the annual leave entitlement of the employee. The law clearly states as follows:

Interruption of work by voluntary communal work, civic duties and special leave

“A period during which a worker is absent from his or her normal duties with the permission of the Employer on account of the worker’s participation in voluntary communal work, the discharge of civic duties or the granting of special leave with or without pay, shall not be counted as part of the worker’s annual leave.”[3].

The above provision factors in leave without pay and does not compel the Employer to pay the Employee under the described circumstances.  Secondly, such leave may be taken by the Employee only with the consent of the Employer[4], and, that thirdly, Special Leave is to be distinguished from the ‘annual leave’ entitlement.

Consequently, the Employer may request Employees to apply to proceed on special leave without pay for the pendency of the pandemic. Equally, there may be specifically drafted provisions within an employment contract which authorizes the Employer to request that the Employee proceed on leave. The Employer may take the opportunity to trigger such a provision in circumstances where there is temporary closure of business activities.

ii. Special Leave With Pay[5]

This is an arrangement where both parties may agree that the Employee proceeds on leave but with pay.

The law clearly states, with regards to annual leave, that the Employee is entitled to full pay[6]. Full pay as defined by the Labour Act, 2003 (Act 651) (the Act) as:

“the worker’s normal remuneration, without overtime payment, including the cash equivalent of any remuneration in kind”[7]. Remuneration is further defined as including “the basic or minimum wage or salary and any additional emoluments payable directly or indirectly by the Employer to the worker on account of the worker’s employment”[8].

However, an important distinction can be drawn here. This is because the law does not expressly require the Employer to provide full pay for Special Leave. Therefore, barring an express prohibition, the Employer may agree with the Employee that the Employee proceeds on Special Leave with varied or reduced pay for the period of the pandemic. Having said that, the terms of the Special Leave in those circumstances should be ideally, agreed upon by the parties and form the basis of a written agreement.

B. Reduced Working Hours and/or Quantity of Work with Reduced Salary.

Ghanaian Labour Law permits the Employer to modify business operations[1], most applicable when there is a business downturn. The Employer can temporarily rearrange the working hours of the Employee, rotational work, which may be accompanied by an agreed reduction in salary commensurate with the working hours and level of output.  Such measures however cannot be imposed on Employees; both Employer and Employee should agree on the terms governing, what is most likely to be, a temporary arrangement, with an executed contract.

In conclusion, while the above legal options are available to Employers, they are not one-size-fits-all for every business. To achieve the best risk mitigation approach, which protects business operations as well as Employee health, safety and security, Employers must select options which suit their peculiar circumstances.

Any changes implemented in the workplace has to be subject to the existing employment law and would require the Employee’s consent. In circumstances where the alternative is a termination of employment or redundancy, it will be in the best interest of the Employee to engage in a process of dialogue and negotiation.

Ultimately, it is imperative to respect the specific contractual terms undergirding each employer-employee relationship, the requirements imposed by the Government and prevailing official guidance.

 

[1] Per Section 96 of the Labour Act, 2003 (Act 651) “…a collective agreement relating to the terms and conditions of employment of workers, may be concluded between one or more trade unions on one hand and representatives of one or more employers or employers’ organizations on the other hand.”
[2]  Section 105, Labour Act, 2003 (Act 651).
[3] Section 23, ibid.
[4] Section 23, ibid.
[5] Section 23, ibid.
[6] Section 20, ibid
[7] Section 20 (2), ibid.
[8] Section 175, ibid.
[9] Section 8(c), ibid.

 

To further discuss this blog post or related matters, visit our office at House No. 99A 4th Norla Street, Labone – Accra or contact us on 0307001566 or info@bpaghana.com and a member of the B&P ASSOCIATES legal team will be happy to provide further insight.