Recently I watching CITI TV news when I heard that one of the biggest hotels in had been temporary closed due to the economic effect of the COVID 19 - also known as Coronavirus.

Within that same period, it was also reported that some other five star hotels had also closed several of their hotel floors as part of a mitigation plan to minimize the economic effect of the virus.

The above businesses are not the only hotels or businesses that felt the pinch of Covid 19. Several businesses, especially small and medium scale enterprises also suffered similar fate.  

To make matters worse, the government of Ghana, in an effort to enforce social distancing and containing the spread of the virus, on the 28th of March, 2020 announced a partial lockdown allowing only businesses providing essential services to operate.

Struggling businesses, in an effort to cut cost resorted to temporal and/or permanent staff layoffs, reduce salary and/or working hours or suspend contract of employment of some of their staffs.

Businesses are at liberty to take any practical steps to mitigate their losses or to stay in business in this challenging times, however, it has to be done in accordance with the laid down laws and procedures.

In view of the above, this article considers the various legal rights available to both the employer and the employee during this challenging times.


The general principle is that employers can terminate employment contract anytime during the period of employment contract. However, at all material times, there will be an obligation on the employer to justify that that termination was fair.

The labour law (Act 651) has provided an exhaustive list under which a person's employment contract can be fairly terminated. Some of the grounds includes: proven misconduct of the worker, incompetence of the worker, redundancy etc.

Therefore during this challenging time the best way to terminate the employment contract of an employee is to negotiate with the affected persons and arrive at a mutual agreement.

If parties are not able to reach into an agreement the option available for the employer is to make their various roles redundant. Similarly, all the laid down procedures regarding redundancies has to be followed.


The Labour law provides protection for employees' salaries in the duration of the employment contract. Therefore an Employer cannot reduce the employee salaries to their disadvantage. On that basis, the employer may breach the terms of employment if it reduces the employees' salaries without their consent.  

The relevant laws in the country does not gives employers the right to reduce the salary of employees due to the economic effect of COVID 19. The only way the employer can lawfully reduce the salaries of employees is by the consent of the employees.

In the alternative, when it becomes necessary to reduce the employees salaries, the employer will have to negotiate and pay the employee redundancy or severance pay up till the time the employer decides to reduce the employee's salary.


Covid 19 has created unprecedented economic hardships to businesses as a result businesses are trying every innovative ways to sustain business and also keep its employees at work.

One of the steps taken by businesses is to temporarily suspend the employment of employees till the economic conditions improve. In other parts of the world there is a legal provision available for businesses or employers to temporarily suspend the employment of employees for a specific period in respect of situations like COVID 19.

In Ghana there is no legal provision which supports a business or employer to temporarily suspend the employment contract.

When it becomes necessary to suspend employment contract, it is imperative that the employer and the employee negotiate and comes to a compromise. In absence of consent from the employee, it will be unlawful and unfair to suspend a person's employment contract.


The employer cannot fire an employee on the grounds of contracting Covid 19. Such termination will amount to unfair termination under the relevant Labour law.


Each and every situation presents its peculiar challengers. It is therefore advisable that professional advice is sought to avoid any potential claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.