Can Demotion and ‘Suspension without Pay’ Lead to a pay cut under the Labour Laws of Ghana?

Senyo Adjabeng / No Comments

BlogPost – 004-18

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Can demotion and ‘suspension without pay’ lead to a Pay Cut under the Labour Laws of Ghana?

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‘Demotion’ and suspension without pay are disciplinary actions or penalties at law and applicable if same are outlined in specific provisions of workplace disciplinary policies of an organization. 

These disciplinary penalties are lawfully applicable if it is communicated and known to employees as possible consequences for breach of workplace rules. 

Demotion: 

This is a corrective disciplinary action and penalty where an employee is dropped on a salary structure by a grade or more. Does an employee therefore suffer a pay cut as a result? Yes. Because a lower salary grade or band means lower amount of pay, and an employee will definitely suffer a pay cut.

Suspension without Pay:

This is a disciplinary action and penalty where an employee is suspended from work for a duration without the payment of salary and allowances for that duration. This is often imposed or applied after the disciplinary process as a corrective remedy of bad behaviour or breach of workplace rules.

However, suspension without pay is a practice which has been outlawed by the current Labour Laws of Ghana. Does an employee suffer a pay cut upon the application of suspension without pay? Yes. Because for the duration of suspension, salary and allowances are halted.

Is suspension without pay lawful? No. Can an employer apply suspension without pay as a disciplinary action and penalty? No. Because “an employer shall not impose a fiduciary penalty on an employee for any reason whatsoever” including disciplinary actions.

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