Employment Law

Introduction Laws relevant to employment in Ghana – 1992 Constitution – Labour Act, 2003 (Act 651) – Labour Regulations, 2007 (LI 1833) – National Pensions Act, 2008 (Act 766) – Internal Revenue Act, 2000 (Act 592) as amended – Case law – Children’s Act, 1998 (Act 560) – Workmen’s Compensation Act, 1987 (PNDCL 187) – Factories, Offices and Shops Act, 1970 (Act 328)

Introduction Employment relations are governed by the Labour Act, 2003, (Act 651) Labour law is the set of legal rules, principles and practices that regulate the relationship between employers and workers It also regulates bodies whose mandate affect employment e.g. trade unions, employers associations etc

Defining the contract of employment – Section 175 of the Labour Act defines employment as a contract of service whether express or implied, and if express whether oral or in writing. What is a contract of service? – Courts have had difficulty in defining it. The approach therefore is to adopt a series of tests to explain it by contrasting it with a contract for service

The control test Entrepreneurial test Integration test

Control test – Employer has the right or power to control the worker not only as to what the worker must do but also as to the manner/method by which the work must be done. – On the other hand if the employer is merely to indicate the nature of the work he wants done by the worker but leaves it to the worker to decide how to go about it then it is a contract for service.

Yewens v. Noakes: “a contract of service exists if the worker is subject to the command of the employer as to the manner in which the worker should do his work” More recent cases have said that control is not and should not be a decisive consideration for determining a contract of service.

Market Investigations v. Minister of Social Security: “I think it fair that at one time a school of thought according to which the extent and degree of control which B was entitled to exercise over A in the performance of the work would be a decisive factor. However, it has for long been apparent that an analysis of the extent and degree of such control is not in itself decisive.”

Also in Morren v. Swinton, the point was made that when one is dealing with a professional man or a man of some particular skill and experience, there can be no question of the employer telling him how to do the work. Hence the absence of control or direction by the employer can be of little use as a test.

The inadequacy of the control test was also pointed out in Cassidy v. Ministry of Health when Lord Justice Somervell said that a certified master of a ship can be employed by the owners of the ship under a contract of service without the owners having the power to tell him how to navigate the ship.

So what then must a contract of service be: Ready Mixed Concrete Ltd v. Minister of Pension and National Insurance: according to MacKenna J: “an obligation of a party to do work subject to the other party’s control is necessary, though not a sufficient condition of a contract of service.” Means control must exist but that alone is not enough.

If the provisions of the contract as a whole are inconsistent with its being a contract of service, then it is another kind of contract. According to MacKenna J: three conditions must be fulfilled for a contract of service to exist: a.The servant agrees to provide his own skill and work in the performance of some service for the master in consideration of a wage or other remuneration.

b.The servant agrees, expressly or impliedly, that in the performance of the service he will be subject to the other person’s control in a sufficient degree to make that other person a master. c.The other provisions of the contract are inconsistent with it being a contract of service

The entrepreneurial test, also known as, economic reality test or independence test – The determination depends on whether the person engaged to do the work is in a business on his own or not. – If the person is in a business of his own then it is a contract for service, but if he is doing someone’s work then it is a contract of service.

Market Investigations v. Minister of Social Security: cook J stated: the fundamental test in determining … is whether the worker engaged to perform the services is doing so as a person in business on his own account or not. If he performs as a person in business on his own account then it is a contract for service, otherwise it is a contract of service.

He further stated that a person is in business on his own account when in carrying out the work, he provides his own tools, risks his own capital and the opportunity of profit depends on the way he manages his work.

Kankaadi v. B.I.O Ltd: owner of a truck insured the truck and then employed a driver to operate it. Owner hired the truck out to someone with the driver. Salary of driver was also paid by the owner. Issue: whether the driver while working for the hirer, was an employee of the owner or the hirer

Held: driver was the employee of the owner and not the hirer. Court relied on the following factors: – that the owner owned the truck (the equipment) – employed the driver – ensured the truck (risk was vested in the owner)

The integration test – A contract of service exists if the worker is employed by the employer as part of the business of the employer and the work he is engaged to do is an integral part of the business of the employer.

Putting it all together What then is a contract of employment? – Voluntary agreement by one person to personally serve another in return for remuneration – Worker makes himself available to serve the employer – Personal service – Ownership of the means of doing the work is vested in the employer