Cardinal rules in the labour-management negotiation process as enshrined in the Labour ACT, 2003 (ACT 651)

New pensions investment to put private pension funds at unnecessary risks
Kofi Anokye Owusu-Darko(Dr)

Labour-management negotiation involves a strategic conversation between a labour union and an employer on an issue in order to reach an agreed and sustainable outcome that is a gain for both parties.  Section 96 of the Labour Act, 2003 (Act 651), requires terms and conditions of employment of workers to be concluded between trade unions on one hand and representatives of employers on the other hand by way of a negotiation process called Collective Bargaining.

Section 101 of Act 651, also requires negotiating parties to make rules to govern this procedure thereby giving a legal requirement for the need to have cardinal rules to govern the negotiating process.

Negotiation is a critical and crucial conversation that requires cardinal rules not only as a communication protocol in the negotiating process but also; as ground rules for helpful behaviours that will shape the conversation and allow parties to use language skills effectively.

Cardinal rules therefore become the preparation stage for the parties to not only have a conversation but set the tone and purpose for the negotiation, and allowing parties to determine and share the method of inquiry. Without which it will be difficult for the parties to remove obstacles in arriving at a common Belief, Expectation, Assumption, Concern and Hope (BEACH) at the end of the negotiation process.


The Labour Act, 2003 (Act 651), a social legislation, has in-built cardinal rules that ensures a sustainable outcome from any Labour Management Conversation. In putting together, the ground rules, it is imperative for parties to be mindful of the following:

  1. The parties must choose a neutral or preferred site that is acceptable as the place for the conversation to take place.
  2. Parties to the negotiation must have the authority to enter into the conversation to take decisions that will be binding so as not to waste time. This is especially on behalf of the employees as required by Section 103 (2) of Act 651. The negotiating parties must be known to all parties with their respective leads.
  • The number of people from each party that can be part of this strategic conversation of negotiation must be agreed upon with quorum determined. The chairperson with any co-chairperson, record keeper or the official minutes’ keeper must be well agreed.
  1. There should be full disclosure and sharing of information relevant to the negotiation by all parties as required by section 97 (2) of Act 651 and especially by the employer as required under section 9 of Act 651.
  2. There should be confidentiality of information. Information shared in confidence should not be disclosed to a third party without the prior written consent of the party providing the information as required by section 97 (3) of Act 651. The type of information that must be recorded during the negotiation and that which should be confidential must be determined and agreed upon.
  3. There is the need for the channels of communication to be kept open especially with the workers as required under section 9(g) of Act 651. That is, all parties must be ready to avoid the unhelpful behavior of distancing by wanting to walk away to block the channel of communication. All must be present for the conversation by way of a quorum and no quitting during the dialogue.
  • Parties are to respect and as much as possible protect the interests of each other especially that of the workers as required by section 9(h) of Act 651.
  • Parties are to act in good faith and to make every reasonable effort to reach an agreement or settlement as in sections 97 (1) and 153 of Act 651.
  1. Parties to the negotiation process should be truthful and honest and not make false or fraudulent misrepresentations about matters relevant to the negotiation as required under sections 97 (4) of Act 651
  2. There should be commitment of parties to reach an agreement as required by section 103 (2) of Act 651. This is by agreeing to generate options to resolve issues as well as to identify an objective criteria for a joint solution that is neutral with respect to self interests.
  3. Any collective agreement reached should be binding on all parties as required by section 105 (1) of Act 651
  • All parties are to be fair and not show any form of aggression by way of threatening to intimidate or even intimidate another during the negotiation process as it is an unfair labour practice under sections 127 (3) & (4) of Act 651.
  • The workers during the negotiating process should not resort to the use coercive force or power play, such as a strike or lockout as stated in section 161 of Act 651; since that will cause serious interference with the business of the employer resulting in financial loss. This is an unfair labour practice under section 13 of Act 651.
  • Words create worlds hence parties must agree to be courteous and use conciliatory language by talking gently to each other, be honest, open and be specific in assertively seeking their interests.
  1. It is imperative for parties to agree to ask questions from a positive, appreciative stance.
  • People take positions based on their interest which is created by their needs. Parties must therefore agree to focus on their interests not positions so their needs can be satisfied. The negotiation must be interest and principled based as required under sections 97 and 98 of Act 651.
  • Parties to agree to actively listen and be ready to summarize their understanding of each other’s issues or interest.
  • Parties to agree to avoid heckling, focus on the problem not persons to create an environment for each party to say what they are thinking.
  • Parties to agree to reciprocate conciliatory gestures made by another party.
  1. Parties to agree to settle any dispute by negotiation with seven days after the occurrence of the dispute and agree to a mediation process if unable to reach a resolution after the negotiation process as required under section 154 (1) of Act 651.
  • Parties to agree to exhaust all procedures agreed in any collective agreement for dispute resolution before seeking for a mediation process as required under section 154 (2) of Act 651.
  • Parties to agree to consent to voluntary arbitration should the mediation process fail as in section 157 of Act 651
  • Should a dispute remain unresolved under a voluntary arbitration, parties must agree to the process of a compulsory arbitration under section 164 of Act 651
  • Parties must finally agree to be bound to an arbitration award as per section 158 of Act 651


A letter dated 23rd February, 2002 from the Fair Wages and Salaries Commission (FWSC), inviting the University Teachers Association of Ghana (UTAG) for a meeting at the Ministry of Employment and Labour Relations Conference room for negotiation required UTAG to sign an attached Rules of Engagement prior to their meeting. When did the UTAG negotiation start? What was the Rules of Engagement then? Are parties now getting to sign Rules of Engagement? Was the Rules of Engagement put together by both parties?  Is FWSC making rules and imposing on UTAG?  No one argues with their own data, hence parties are more likely to stick to rules that they have been part of crafting. An issue of “Our Cardinal Rules” we have agreed upon instead of “My Rules” you have to sign?


The cardinal rules prepare and guides the parties to both gain in their conversation towards an interest-based negotiation for a sustainable outcome. Without it a conflict situation could arise. It is therefore important for these rules to be set before embarking on the actual negotiation of uncovering the issues, learning the significance of the party’s interest, whilst searching for options and possibilities to be able to reach a common agreeable plan of action after the process.

The BIG question is, why do we keep having strikes during the negotiation process? Lack of Trust as a result of not having and/or agreeing on adequate cardinal rules as enshrined in Act 651 to guide the conversation or not following the rules that have been signed especially where the rules were crafted from the point of view of just one party. Is it surprising to have the present impasse with UTAG? No.

The author is an Organisation Development Practitioner, holds an LLB and LLM. Currently an ADR student at Gamey & Gamey. (Email:[email protected])




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