Many Ghanaian businesses still operate on verbal employment agreements or use poorly drafted contracts copied from the internet. This is a significant legal risk. Ghana's Labor Act 2003 (Act 651) mandates specific terms in employment contracts. Here is what must be there.
Written Contract: When Is It Required?
Under the Labor Act, a written employment contract is required when employment exceeds 6 months or when the employee requests one. In practice, every employee should have a written contract from day one — it protects both the employer and employee.
Mandatory Terms Under the Labor Act
Section 12 of the Labor Act requires every employment contract to contain:
- Names and addresses of employer and employee
- Date employment commenced
- Job title and description of duties
- Place of work
- Normal working hours
- Remuneration — basic salary, any allowances, overtime rates, benefits
- Payment intervals — weekly, biweekly, monthly
- Holidays and leave entitlements — annual leave, sick leave, public holidays
- Notice period for termination
- Probation period (if applicable) and its terms
Probation Periods
Probation periods are permitted under the Labor Act. Key rules:
- Maximum probation period: 6 months (can be extended by agreement but with justification)
- Notice to terminate during probation: at least 1 week (or as specified in contract)
- Probation cannot be used as a permanent state — it must be completed and the employee confirmed or released
Important Clauses to Add Beyond the Minimum
Confidentiality
Protect sensitive business information. Specify what is confidential and what the employee's obligations are during and after employment.
Intellectual Property
Any work created by the employee in the course of their employment belongs to the employer — specify this clearly.
Non-Solicitation
Restrict departing employees from immediately poaching clients or colleagues for a specified period (typically 6–12 months).
Non-Compete
Restricting employees from immediately joining competitors. Note: Ghanaian courts will only enforce reasonable non-competes — those with a reasonable time limit (6–12 months), reasonable geographic scope, and legitimate business interest to protect. Overly broad non-competes are unenforceable.
Disciplinary and Grievance Procedure
Reference or attach the company's disciplinary procedure. This is essential for lawful dismissal.
Data Protection
Under Ghana's Data Protection Act, employees handling personal data have obligations. State these in the contract.
Annual Leave Minimum
The Labor Act mandates a minimum of 15 working days annual leave per year for full-time employees. You cannot contractually reduce this below the statutory minimum — but you can offer more.
Overtime
Overtime rates must be at least 150% of the normal hourly rate for weekday overtime and 200% for work on public holidays. Ensure your contract states overtime eligibility and rates clearly.
Maternity Leave
Female employees are entitled to at least 12 weeks paid maternity leave. This is a statutory right — it cannot be contracted away.
Common Employer Mistakes
- No written contract at all
- Contract does not specify job duties clearly — leads to disputes about what was agreed
- No disciplinary procedure referenced
- Probation period longer than 6 months without justification
- Contract signed only by employer — always get the employee's signature
- Outdated contracts that don't reflect current salary or role
Get your employment compliance right from the start. Use our free Business Structure Finder. Read about dismissal and redundancy law and employee rights in Ghana.