Ghana ranks first among most African countries with high redundancy cost due mostly to the poor handling by employers and unclear rules of recruitment.
Mr Charles Antwi, Legal and Development Officer of Golden Tulip, made the observation at a day’s workshop on the cost of redundancy organised by the Ghana Employers Association in Accra on Thursday.
He said while redundancy packages in most African countries were mandatory, Ghana had no statutory rules and negotiations and severance pay had to be delayed for long periods and adding to cost.
Mr Antwi said most employers lacked the expertise or did not care about the need for planning for redundancy.
This, he said, was reflected in no redundancy clause in employment contracts, poor drafted Collective Bargaining Agreements without any time frame for such negotiations.
In addition, there is lack of clarity about the law leading to different interpretations given to the same cases.
Mr Antwi said a way out of the situation was to make changes to the labour laws to get a ceiling on severance compensation as pertaining in most countries where guidelines were provided.
In addition, there must be capacity training for employers to enhance their understanding of the issues involved.
Mr Neneyo Mate-Kole, Managing Director of Benso Oil Palm Plantation and Treasurer of GEA said redundancy had become a critical cost element in doing business in the country.
He said most businesses now see the cost associated with redundancy as inimical to their right to manage and reorganise to conform to the ever changing environment of doing business.
The workshop, attended by human resource practitioners, was organised by the Ghana Employers’ Association with support from the European Union under the capacity building project programme.
It sought to empower employers’ orgnisation such as GEA to maximise their influence in creating a better environment in private sector development.
It is the second in series of national consultative workshops to solicit inputs and views from stakeholders to deliberate on core themes conceived within the framework of its business agenda.
The outcome of these workshops would assist GEA to build evidence based advocacy actions and strategies to engage government, orgnaised labour and other stakeholders on its Business Agenda for 2011.