People and organizations: statutory rights and duties of an employer; part one

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  People and Organizations: statutory rights and duties of an employee [II]
Daniel Amateye ANIM

A cordial relationship between the employer and employees in an organization is vital to enhancing productivity at the workplace. In order to anchor this relationship, there is the need for both the employer and employees to appreciate their legal rights and responsibilities. In this piece, the writer shall discuss the statutory rights and duties of an employer. The significance of this article is to remind employers about their statutory rights and the extent to which such rights can be exercised.

An employer, basically, is a person or institution that hires employees to perform service in exchange for wages and salaries, mostly under either express or implied terms. It is important to state that, it is the employer who sets up the business with his or capital, creating the necessary business environment by providing tools, equipment and other logistical with the view to enhancing productivity. It is also the responsibility of the employer to provide work for the employees and must ensure maximum safety at the work place. In fact, the statutory rights and duties of the employer are enshrined in Sections 8 and 9 of the Labour Act, 2003 (Act 651) respectively.

Pursuant to Section 8 of Act 651, the statutory rights of an employer include the right to:

  1. employ a worker, discipline, transfer, promote and terminate the employment of the worker;
  2. formulate policies, execute plans and programmes to set targets;
  3. modify, extend or cease operations;
  4. determine the type of products to make or sell and the prices of its goods and

For the purposes of this article, the above provisions shall be discussed under the following headings:

  • The Right to Discipline: pursuant to Section 8 (a) of Act 651, the employer has the right to employ a worker, discipline, transfer, promote and terminate the employment of the worker. This implies that, the employer has the right to employ professionals depending upon their skills, expertise and competence levels. In other words, the cream of professionals and other personnel is at the preserve of the employer. In fact, the employer has the right to transfer employee (s) to other branches or location of business depending upon the organization’s strategy and direction. He can equally terminate employee’s appointment based on unsatisfactory performance, gross misconduct etc.
  • The Right to Formulate Policies: Section 8 (b) of Act 651 provides that an employer has the right to formulate policies, execute plans and programmes to set targets. This presupposes that, the right to formulate policies capable of propelling business growth, designing strategic plans, and well as setting targets rest within the realm of the employer. This suggests that, it’s the employer which dictates the direction of the organization.
  • The Right to Dictate Operational Direction: Pursuant to Section 8 (c) of Act 651 which provides that the employer has the right to modify, extend or cease operations. This implies that the employer has the power to make adjustments to its operations. He or she has the right to expand operations due to high profitability and also in respect of the desire to capture large market share in the industry. In an event of uncertainties in the business environment, coupled with massive losses, the employer can curtail or cease operation without any compulsion.
  • Choice of Products to be Produced: Section 8 (d) of the Labour Act, 2003 (Act 651) provides that, the employer has the right to determine the type of products to make or sell and the prices of goods and services. This implies that, the employer has the right to determine the nature and type of goods to be produced or services to be rendered. The employer’s choice of type of products to make, and prices to charge is mostly dependents on market forces and the demand for certain goods by the consumers. For instance, during the pick of the pandemic, most manufacturing shifted to the production of face masks.

It is important to state that the duties of the employer are stipulated in Section 9 of the labour Act, 2003 (Act 651) and shall be itemized under the following headings:

  • Duty to provide work for the workers: Section 9 (a) of Act 651 provides that the employer must provide work and appropriate raw materials, machinery, equipment and tools. This implies that, the employer has the duty to provide employees with work, the right and appropriate tools necessary for the effective discharge of their duties. The provision of safety clothing and equipment for workers is also very vital to enhancing productivity. This is in consonance with article 24 (1) of the 1992 Constitution.
  • Duty to pay workers remuneration: pursuant to section 9 (b) of Act 651, the employer has the duty to always pay the remuneration agreed upon in the contract of employment or collective agreement. It is important to note that, the employer can only make statutory deductions from the employees’ wages or salaries. It is refreshing to state that, failure by the employer to pay agreed remuneration is a breach of contract giving rise to action for damages. However, in ensuring harmony between the employer and employees, the employer must take steps to negotiate alternative payment arrangements with employees in an event of financial difficulties.
  • Duty to ensure safety of workers: this is one of the important duties cast upon an employer to ensure the safety of workers form injury and fatalities at the working place. Pursuant to section 9 (c) of Act 651, the employer is supposed to take practical steps to ensure that the worker is free from personal injury or damage to his or her personal health in the course of worker’s employment. In fact, in Narh v. Volta Aluminum Co Ltd, the court held that, the employer has the duty to protect the employee from injury and harm.
  • Skills Training: on job training is key to developing the skills and capacity of workers so as to update their knowledge, skills and expertise on production methods and techniques. This has the propensity of boosting productivity and thereby increasing profitability. As a result, the employer must invest in the training and re-training in order to achieve high output, and other things being equal, subsequent high profits which is important for further expansion. Indeed, Section 9 (d) of Act 651 provides that the employer has the duty to develop the human resources by way of training and retraining of the workers.
  • Provision of adequate disciplinary procedure: section 9 (e) of Act 651 provides that the employer must provide and ensure the operation of an adequate procedure for discipline of the workers. This implies that the employer is required to provide in advance, adequate mechanism for resolution of dispute at the work place. The mechanism must be such that there is fairness in handling disciplinary related issues.
  • Provision of contract of employment: it is important that after a candidate had gone through the employment selection process, and has been finally selected to work for the employer; the employer must provide the employee with the letter of employment spelling out the terms and conditions of employment. Section 9 (f) of the Labour Act, 2003 (Act 651) provides that the employer must furnish the worker with a copy of the worker’s contract of employment. This implies that, whatever terms and conditions which has been agreed upon by both parties should be stated clearly in the letter of employment.
  • Sufficient Communication flow: pursuant to section 9 (g) of Act 651, which provides that, the employer must keep the channels of communication with workers. This implies that the employer is required to keep efficient and adequate communication channels between employees. The employer must also ensure that the lines of communication make provision for feedback and effective collaboration. This has the propensity of increasing productivity at the work place. Adequate communication equally improves cordial working relations between workers and the employer thereby minimizing work related disputes or avoiding strike actions and unrest in the organization.
  • Protection of workers’ interest: the employer is supposed to promote and protect workers interest. Section 9 (h) of Act 651 provides that, the employer promote the interests of workers. The employer can promote workers interest by ensuring that he provides the workers’ union with office for the smooth and efficient running of the union matters. Canteen services can also be provided at the working environment so as to make it easy for workers to have access to food during break time.

Conclusion

It is my considered submission that the provisions in sections 8 and 9 of the Labour Act, 2003 (Act 651) is to ensure that there are cordial working relations between the employer and workers. Such cordial working relations have the potential to boost productivity leading to business growth and thereby an increased GDP growth and the overall performance of the country’s economy.

References

  • Labour Act, 2003 (Act 651)
  • James O.M (2014), Labour Law

>>>The writer is a Development Economist and Chartered Business Consultant. Daniel is the Chief Economist at the Policy Initiative for Economic Development. He also the Director of Research and Analysis, B&FT. He can be reached on email: [email protected]. Tel; 0244 476376/ 0201939350

 

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