Fair, Unfair, Wrongful and Constructive Dismissal

When an employment relationship comes to an end, the circumstances surrounding it can give rise to different legal questions. Ghanaian employment law draws important distinctions between fair termination, unfair termination, wrongful dismissal and constructive dismissal.

Understanding these distinctions can help employers manage termination lawfully and help workers understand the possible legal basis of a claim.

This guide provides an overview of these concepts under Ghanaian law.

What This Guide Explains

This guide explains:

• When an employer may terminate employment without giving a reason;

• What constitutes fair termination;

• What constitutes unfair termination;

• What wrongful dismissal means;

• What constructive dismissal means; and

• The remedies that may be available.

This guide provides general legal information only and does not assess individual employment disputes or predict the outcome of a particular case.

Termination Without Giving a Reason

As a general rule, an employer may be able to terminate an employment contract by giving the required notice or paying the appropriate amount in lieu of notice, without assigning a reason.

The Supreme Court reaffirmed this position in General Transport, Petroleum & Chemical Workers' Union of Trades Union Congress v Halliburton International Incorporated Ghana Branch (Civil Appeal No. J4/19/2023, 27 March 2024).

However, this right is not unlimited.

An employer must still comply with:

• The Labour Act, 2003 (Act 651);

• The employment contract; and

• Any applicable collective bargaining agreement or conditions of service.

In particular, the right to terminate without giving a reason cannot be used to disguise a termination based on a prohibited ground outlined in section 63 (2) of the Labour Act. This is discussed further below.

Giving notice or paying salary in lieu of notice does not, by itself, determine whether a termination is lawful or fair. The circumstances surrounding the termination may also need to be considered.

Fair Termination

Section 62 of the Labour Act identifies circumstances in which a termination of employment may be fair.

These are where the termination is based on:

• Incompetence or lack of the required qualification;

• Proven misconduct;

• Redundancy; or

• A legal restriction preventing the worker from performing the work.

The circumstances surrounding the termination must be considered when determining whether a termination is fair.

Simply describing a termination as “misconduct”, “incompetence” or “redundancy” does not, by itself, make it fair. The applicable contractual, statutory and procedural requirements must also be considered.

Unfair Termination

Section 63 of the Labour Act protects workers from unfair termination.

The Act identifies three main situations in which a termination may be unfair:

1.    Termination for a Prohibited Reason

A worker’s employment is unfairly terminated where the only reason for the termination is one of the circumstances protected by section 63 (2) of the Labour Act.

These include termination because the worker:

• Has joined, intends to join, or has ceased to be a member of a trade union, or intends to participate in trade union activities;

• Seeks office as, or is acting or has acted as, a workers’ representative;

• Has filed a complaint or participated in proceedings against the employer concerning an alleged violation of the Labour Act or another law;

• Is of a particular gender, race, colour, ethnicity, origin, religion, creed, or social, political or economic status;

• Is a woman who is pregnant or absent from work during maternity leave;

• Has a disability;

• Is temporarily ill or injured, where the illness or injury is certified by a recognised medical practitioner;

• Does not possess the current level of qualification required for the work, where that qualification requirement is different from the one that applied when the worker commenced employment; or

• Refused or indicated an intention to refuse to perform work normally done by a worker participating in a lawful strike, unless the work is necessary to prevent actual danger to life, personal safety or health or for the maintenance of plant and equipment.

2.    Termination Because of Ill-Treatment or Sexual Harassment

A worker may also be treated as having been unfairly terminated where the worker ends the employment contract, with or without notice, because:

• The worker has been ill-treated by the employer, having regard to the circumstances of the case; or

• The employer has failed to take action on repeated complaints of sexual harassment at the workplace.

In these circumstances, the law deems the termination to be unfair.

3. Failure to Establish a Fair Reason or Procedure

A termination may also be treated as unfair if the employer fails to prove that:

• The reason for the termination is fair; or

• The termination was made in accordance with a fair procedure or the Labour Act.

This means that, where a termination is challenged, both the reason for the termination and the manner in which it was carried out may be relevant.

An employer’s contractual right to terminate employment without assigning a reason does not remove the protections provided by section 63 of the Labour Act.

Wrongful Dismissal

Wrongful dismissal is different from unfair termination.

While unfair termination is primarily a statutory concept under the Labour Act, wrongful dismissal is generally concerned with whether the employer has breached the employment contract.

A dismissal may be wrongful where the employer fails to comply with the contractual terms governing the termination of employment, including:

• The required notice period;

• Payment in lieu of notice, where applicable;

• Contractual disciplinary procedures, where applicable;

• Applicable terms of a collective bargaining agreement; or

• Other contractual requirements relating to termination.

The key question in a wrongful dismissal claim is whether the employer breached the employment contract when ending the employment.

Constructive Dismissal

Constructive dismissal occurs where a worker resigns, but the resignation is treated in law as a dismissal by the employer.

The courts have explained that a worker may be deemed constructively dismissed where:

• The employer’s actions or omissions create intolerable working conditions;

• The conditions make it impracticable for the worker to continue working; and

• The worker terminates the employment as a result.

An example may include sustained harassment.

What Is the Difference?

Simply put, the four concepts address different legal questions:

A single employment dispute may involve more than one legal issue.

For example, a worker may allege that a termination was wrongful because the employer breached the employment contract and unfair because it also violated the Labour Act.

The appropriate legal basis will depend on the facts and circumstances of the particular case.

Remedies

The remedy will depend on the nature of the claim, the circumstances of the case and the forum in which the matter is determined.

A dispute arising from termination of employment may be brought before the National Labour Commission or the courts.

Available remedies may include compensation, reinstatement or re-employment, depending on the circumstances and the legal basis of the claim.

Need More Help With an Employment Matter?

Understanding the general legal framework is an important first step, but individual employment matters can depend on the specific facts, employment contract and applicable workplace rules.

Explore Niellégal's Employment & Workplace resources for more practical information on employment rights and obligations.

For a specific legal question, use our Consult a Lawyer feature to request an introduction to an independent lawyer on the Niellégal Professional Network.

Important Note

This guide provides general legal information for educational purposes only. Laws may have changed since this guide was last updated. For specific legal advice about your situation, please consult a qualified lawyer. Accessing or using this information does not create a lawyer–client relationship.

Last updated: September 2026