Ending an employment relationship is one of the most delicate and disputed issues in Ghana's labour landscape. Many conflicts stem from confusion over an employer's rights to dismiss staff and the strong protections employees enjoy under the law. While contracts often include termination clauses, Ghanaian labour law has shifted from pure contractual freedom to a system centered on fairness.

The Labour Act, 2003 (Act 651) sets the rules for lawful termination. This guide breaks down the key statutory provisions and leading court decisions to explain what makes a termination fair or unfair in Ghana.

The Statutory Framework

Termination rules are mainly in Part V of the Labour Act, 2003 (Act 651), especially Sections 15, 62, 63, and 64. These cover:

• How termination must happen, 
• Valid reasons for it, 
• When it's lawful, and 
• Remedies if it's unfair. 

Grounds for the Termination of Employment

Under Ghanaian law, an employment contract can end in various circumstances set out in Section 15 of the Labour Act, 2003 (Act 651). 

The simplest route is mutual agreement, where both the employer and the worker willingly decide to part ways.

Workers enjoy extra protection: they can terminate the contract themselves if they experience ill-treatment or sexual harassment from the employer.

Employers face stricter limits and can only initiate termination on specific grounds, such as:

• The worker's death before the contract expires, 
• A medical examination showing the worker is no longer fit for the role, 
• Inability to perform duties due to sickness or accident, 
• Proven incompetence, or 
• Established misconduct. 
   

Separately, either party—the employer or the employee—can end the contract by giving the required notice (or payment in lieu). The notice period depends on the contract type and duration.

However, simply providing notice does not guarantee the termination is fair. Ghanaian courts have made it clear that Section 15 addresses only the procedural aspects, not the overall fairness. An employer who follows notice rules to the latter can still be held liable for unfair termination under Sections 62 and 63.

A key example is the Court of Appeal decision in Airtel Ghana Ltd. v. National Labour Commission (2019) JELR 107039 (CA). The court stressed that paying the required notice does not automatically make a termination lawful. It went further, ruling that any termination marked by administrative high-handedness, intolerance, or arbitrariness is grossly unfair—regardless of compliance with notice provisions.

Valid Grounds for Fair Termination (Substantive Fairness)

The Labour Act of 2003 (Act 651) lays down clear rules about how employers can end someone's job. Section 62 spells out the exact situations where a termination is considered fair, moving away from the old days when bosses could let someone go without giving any real reason. Now, if an employer wants to terminate a contract fairly, they have to point to one of the specific grounds in the law—and be ready to back it up if the worker challenges it.

One common ground for fair termination is incompetence or lack of qualification. If an employee consistently fails to meet the performance standards of their role, or no longer possesses the essential qualifications—perhaps due to evolving job demands or outdated skills—the employer may have valid grounds to end the employment.

That said, fairness is key.
Employers are generally expected to issue warnings, provide constructive feedback, and offer reasonable opportunities for improvement (such as training or support) before terminating employment. This ensures employees are not caught off guard and gives them a genuine chance to improve.

In Charles Affran v. SG-SSB Limited [2019] JELR 67457 (SC), the Supreme Court upheld the Court of Appeal's decision. It held that the plaintiff (Charles Affran) bore responsibility for verifying signatures on transfer request letters but failed to follow established protocol. This negligence led to the defendant (SG-SSB Limited) suffering a significant financial loss due to a forged signature. The Court ruled that the termination was not wrongful or unfair.

Another valid ground for fair termination is proven misconduct. This covers a wide range of behaviours, from serious issues like theft, fraud, or dishonesty, to repeated rule-breaking, absenteeism, or outright insubordination. We've all seen or heard of situations where an employee's actions seriously damage trust or disrupt the workplace.

The crucial point, however, is that it must be proven. It can't simply be the employer's accusation—the misconduct has to be properly investigated. The worker is entitled to a fair and transparent disciplinary process, including being informed of the allegations, given evidence, and offered a real opportunity to respond and defend themselves.

In cases of gross or very serious misconduct (such as violence, major theft, or deliberate sabotage), an employer may dismiss the worker immediately without notice—this is known as summary dismissal. Even then, the employer must have strong evidence and be able to show that the process, however swift, was fair. Without this, the termination risks being ruled unfair if challenged at the National Labour Commission.

Redundancy is a recognised ground for fair termination under Section 62 of Ghana’s Labour Act, 2003 (Act 651). It applies when a position ceases to exist due to legitimate operational reasons, such as organisational restructuring, the adoption of new technology, or adverse economic conditions that necessitate workforce reduction.

The redundancy must relate to the job itself, not the performance or conduct of the individual employee. For the termination to be fair, employers are required to comply with specific procedural safeguards designed to ensure transparency and equity.

These requirements include:

• engaging in meaningful consultation with the affected workers or their trade union (where applicable) to discuss the proposed redundancies and explore possible alternatives; 
• providing formal notification to the Chief Labour Officer; 
• applying objective, non-discriminatory selection criteria, such as “last in, first out” (LIFO), length of service, or retention of essential skills; 
• paying the entitled redundancy compensation, typically calculated based on length of service and as agreed or in accordance with established practice. 

Failure to follow these procedures may render the termination unfair, entitling the affected worker to seek redress through the National Labour Commission.

Lastly, termination can be fair if some external legal barrier stops the worker from doing their job—for example, if a driver loses their license, a professional gets struck off a register, or immigration rules change in a way that affects their right to work. As long as the restriction is real and not the worker's fault, this can justify ending the employment.

At its heart, Section 62 strikes a balance: it gives employers legitimate ways to manage their workforce while protecting workers from arbitrary dismissals. The key is combining a genuine reason with a proper, respectful process. If an employee feels they've been treated unfairly, they can take the matter to the National Labour Commission for help, which might mean getting their job back or receiving compensation.

Understanding these rules helps both employers and employees navigate tough situations with greater confidence and fairness.

What Makes Termination Unfair

Section 63 of the Labour Act, 2003 (Act 651) provides the main statutory safeguards against unfair termination of employment in Ghana. It prohibits employers from terminating a worker’s employment unfairly and places the burden on the employer to justify any termination that is challenged.

A termination is considered unfair if it is based on prohibited grounds. These include a worker’s actual or intended membership of a trade union, withdrawal from such membership, participation in lawful trade union activities, or seeking or holding office as a worker’s representative. Termination is also unfair if motivated by a worker filing a complaint or participating in proceedings against an employer for alleged breaches of the Labour Act or any other law.

The provision strictly prohibits termination on discriminatory grounds, including gender, race, colour, ethnicity, place of origin, religion, creed, or social, political, or economic status. Specific protections cover female workers dismissed due to pregnancy or maternity leave, workers with disabilities terminated because of their disability, and employees absent due to temporary illness or injury certified by a recognised medical practitioner.

Additional prohibited grounds include terminating a worker for lacking new or higher qualifications not required at the start of employment, or for refusing to perform the work of employees engaged in a lawful strike—except where such work is essential to prevent danger to life, personal safety, health, or the protection of plant and equipment.

The Act also recognises constructive dismissal as a form of unfair termination, where a worker resigns due to ill-treatment by the employer or where repeated complaints of sexual harassment are ignored.

Finally, a termination may be deemed unfair if the employer cannot demonstrate both a valid substantive reason and compliance with fair procedures as required under the Act. This reinforces that lawful termination in Ghana must be both justified and procedurally fair.

Collectively, these provisions protect workers against arbitrary, discriminatory, or retaliatory dismissals. Employees who allege unfair termination may seek remedies, including reinstatement or compensation, before the National Labour Commission.

Section 64: Remedies for Unfair Termination

If a termination is unfair, the National Labour Commission (NLC) or courts can order:

• Reinstatement, 
• Re-engagement in similar role, or 
• Compensation (most common, especially when reinstatement isn't practical).

Burden of Proof

Once an employee claims unfair dismissal, the employer must prove both a valid reason (Section 62) and fair procedure. This reverses the old common law approach.

Conclusion

Ghana's termination rules now priorities statutory fairness over unchecked employer power. Employers must prove both valid grounds and due process, while employees have strong safeguards against arbitrary or discriminatory dismissals. Courts and the NLC continue to uphold these principles, ensuring terminations are governed by law, not whim.

Key Takeaways

• Statute, not contract alone, controls termination. 
• Fairness demands both good reason and proper process. 
• Unfair dismissal brings real remedies. 
• Courts consistently value substance over technical compliance.