In the Bible, Apostle Paul asked: “Who serves as a soldier at his own expense? Who plants a vineyard and does not eat of its grapes? Who tends a flock and does not drink of the milk?” and ended with the statement, “For it is written in the Law of Moses: ‘Do not muzzle an ox while it is treading out the grain’.”(1 Corinthians 9:7-9a).  Remuneration for work done consists generally of pay, incentives and benefits. That the ‘worker deserves his wages’ (1 Timothy 5:18) is one reason for work done in expectation of agreed remuneration with the employer and required by law, especially the Labour Act, 2003 (Act 651) and Constitution of the Republic of Ghana, 1992.

The Constitution

Our Constitution protects the worker and what enters his wallet. In Article 24 (1) ‘every person has the right to work under satisfactory, safe and healthy conditions, and shall receive equal pay for equal work’. The worker in Article 24 (2) is ‘assured of rest, leisure and reasonable limitation of working hours and periods of holidays with pay, as well as remuneration for public holidays’. Working mothers are given special treatment in Article 27 (1) ‘during a reasonable period before and after childbirth; and during those periods, working mothers shall be accorded paid leave’. To establish a sound and healthy economy, the State in Article 36 (2) must ‘guarantee a fair and realistic remuneration for production and productivity’. The National Tripartite Committee made up of representatives from the Government, the Ghana Employers Association and representatives of organized Labour under Section 113 of the Labour Act, inter alia determines the national daily wage. Ultimately, when you enjoy your fruits after sixty years, ‘the pension payable shall be exempt from tax’ Article 199 (3).

Payment Directives

In recognising of the worker’s right to remuneration or compensation or pay, the Labour Act, 2003 gives guidelines and directives.  In Section 67, the whole of the salary, wages and allowances of a worker shall be payable by legal tender in addition to any non-cash contribution. Even though in Section 69, deductions from the salary are permitted where an employer provides advance payment to the worker, the employer shall not discount or charge interest on the advance given. The employer shall also not impose a pecuniary penalty upon any worker or make any deductions not permitted by the Act. Deductions that are permitted in Section 70 with the consent of the worker are contributions to provident fund, pension schemes, membership subscriptions, refund of money paid to the worker in error, meeting of losses incurred by the worker, or deductions authorized by the National Labour Commission.

In organisations where there are both unionised and non-union members, Section 109 gives the Chief Labour Officer the discretion to extend the terms agreed in the Collective Agreement to non-union staff of the same category as the union member.

Benefits, Incentives and Taxes

In Bannerman-Menson v. Ghana Employers’ Association [1996-97] SCGLR 417 Hayfron-Benjamin JSC, described fringe benefits as ‘non-taxable pecuniary or other benefit, amenity or facility paid, offered, furnished, provided or supplied by an employer to an employee to ameliorate the rigours of the latter’s employment’. However, bonus and overtime payments are subject to tax under the Internal Revenue Act, 2000 (Act 592) as amended. 

Redundancy Pay

Redundancy arises when by the introduction of major changes in production, programme, organisation, structure or technology, the employment of some workers may be terminated. The redundancy pay and the payment terms and conditions are subject to negotiation between the employer and the worker or their representatives. Any dispute on the redundancy and terms of payment are referred to the National Labour Commission for redress.

Termination Pay

On termination of the contract of employment, Section 18, ‘the employer shall pay to the worker not later than the date of the expiration of the notice all remuneration due’ and where no notice is required, ‘payment shall be made not later than the next working day after termination’.    

A Piece of Free Advice

Dresang (1984) advised that compensation should be guided by four key principles:

The level must be attractive

The system must be equitable and transparent

It must motivate for good performance and

Must consider the employer’s ability to pay.

Put a smile on your workers face because the worker indeed deserves his wages.

ALEXANDER WILLIAMS, FCIB

PARTNER, LEX-ECK CONSULT