The government of the United States of America recently issued an Executive Order suspending
all foreign assistance for 90 days, prompting USAID to halt its international program operations.
This decision has disrupted USAID-funded projects, creating uncertainty for employers reliant on
USAID funding. Our contributors outline strategic options employers can adopt as they assess
workforce adjustments while ensuring compliance with Ghanaian labour laws.
The government of the United States of America recently issued an Executive Order suspending
all foreign assistance for 90 days, prompting USAID to halt its international program operations.
This decision has disrupted USAID-funded projects, creating uncertainty for employers reliant on
USAID funding. Employers must assess workforce adjustments while ensuring compliance with
Ghanaian labour laws. Some strategic options for employers to consider include:
Termination with Notice: Under Ghanaian law, an employer may terminate an employee’s
employment at any time by giving the agreed notice or paying the employee the equivalent salary
in lieu of the notice. Upon termination, employees are entitled to all statutory and contractual
benefits owed to them at the time of termination.
Redundancy: An employer may declare a redundancy in the event of a business downsizing, i.e.,
when the business no longer requires the same number of employees to carry out work of a
particular kind or a close down of the business. Termination due to redundancy must comply with
the redundancy procedures set out in the Labour Act, 2003 (Act 651) (“Labour Act”), including
negotiating redundancy pay.
Other considerations
While the Labour Act provides a framework for employment relations, specific rights and
obligations largely depend on employment contracts. Employers may explore alternative
contractual arrangements, including:
Temporary Unpaid Leave or Furlough Leave: Ghanaian law does not have provisions for
temporary unpaid leave. This would therefore be a contractual arrangement. Employers may
negotiate such leave with employees, ensuring clear terms regarding rights and obligations. In
such arrangements where employment is not terminated, statutory benefits such as annual and
maternity leave are not extinguished.
Transition from Full-Time to Part-Time Employment: Significant contract modifications require
employee consent. A unilateral change by an employer could be considered a termination,
potentially leading to claims of unfair dismissal. Contract changes should follow an offer-and-
acceptance model, formalised through a new or amended agreement. Employers must clearly
define whether changes are temporary or permanent and obtain employee consent.
Employers should navigate workforce adjustments by adhering to the Labour Act, maintaining
clear communication and securing mutual agreement with employees.
March 12, 2025
For more information and updates contact Nana Ama Asare and Akosua Ofori-Asumadu,
Associates at Bentsi-Enchill, Lets & Ankomah, the LEX Africa member for Ghana.
https://bentsienchill.com/
