Abstract
Redundancy under Ghana’s Labour Act, 2003 (Act 651) is often approached as a negotiation exercise centred on severance. This article argues that such an approach departs from the structure of Section 65. Properly interpreted, Section 65 establishes a sequenced process in which adequate disclosure of relevant information must precede meaningful consultation. Where disclosure is reduced to general assertions, consultation risks becoming procedural rather than substantive. A disclosure-centered approach is therefore essential to maintaining both legal compliance and sound industrial relations practice.
Introduction
Redundancy is one of the most consequential exercises of managerial authority. It directly affects employment security, organisational trust, and workplace stability. For this reason, labour law does not treat redundancy as a purely managerial decision; it imposes procedural safeguards designed to balance flexibility with fairness.
Despite this framework, practice has increasingly shifted toward treating redundancy primarily as a matter of negotiation, with attention focused on severance arrangements, while the foundational issue, whether the statutory conditions for redundancy have been satisfied, receives limited scrutiny.
Redundancy is often negotiated before it is justified.
This article examines the structure of Section 65 of Act 651 and argues that process integrity requires a prior focus on disclosure before consultation can meaningfully occur.
As an industrial relations practitioner with over two decades of experience in collective bargaining and labour dispute resolution, the author has observed a persistent tendency in redundancy processes to prioritise negotiations over disclosure. This perspective informs the present analysis, which seeks to re-centre the process on the statutory requirement of Sections 65.
The Structure of Section 65
Section 65 establishes a two-stage process:
- Disclosure (Section 65(1)(a)): The employer must provide relevant information, including the reasons for the termination, the number and categories of workers affected, and the timing of the exercise.
- Consultation (Section 65(1)(b)): Parties to discuss measures to be taken to avert or minimize the termination as well as measures to mitigate the adverse effect of any termination on the workers concerned such as finding alternative employment.
The sequencing is deliberate. Disclosure is intended to provide the informational foundation upon which consultation is conducted.
Disclosure and the integrity of Consultation
The obligation to provide reasons for redundancy must be understood as requiring sufficient particulars, not merely a general statement of intent.
Expressions such as “restructuring,” “efficiency measures,” or “market conditions” may indicate context but do not, without further detail, explain:
- the specific operational changes involved.
- the functions or departments affected; and
- the basis upon which particular roles are rendered redundant.
Without this level of clarity, disclosure does not enable scrutiny, and consultation risks proceeding without a proper factual foundation.
A common practice is to proceed directly to consultation, often focused on severance, before the adequacy of disclosure has been established.
This raises a fundamental issue:
Consultation cannot be meaningful where the underlying justification for redundancy remains unclear.
Where disclosure is insufficient:
- the union is unable to assess the existence of a valid redundancy situation.
- alternatives to redundancy cannot be properly examined.
- engagement proceeds on an unverified premise.
In such circumstances, consultation becomes constrained by the absence of information, rather than by any unwillingness on the part of the parties.
Interpreting Redundancy: From Restructuring to Genuineness
“Restructuring” is a commonly cited justification for redundancy. While it may be legitimate, its adequacy depends on the extent to which it is explained.
It is also instructive that the Labour Act contemplates specific circumstances in which redundancy may arise, including the closure of an undertaking, as well as arrangements or amalgamations that result in termination of employment or a diminution in the terms and conditions of employment.
These recognised grounds underscore that redundancy is not an abstract concept, but one tied to identifiable operational events. Accordingly, where an employer relies on “restructuring” as the basis for redundancy, it is incumbent upon the employer to situate that claim within a clear and demonstrable operational context.
It is the position of law that, a sufficient explanation should therefore identify:
- the nature of the organisational or operational changes.
- the areas of the business affected.
- the connection between those changes and the roles identified; and
- the rationale for the selection of affected employees.
Absent these elements, the explanation remains general and does not fully satisfy the purpose of disclosure under Section 65.
Another issue concerns the genuineness of redundancy. A redundancy is properly understood as a situation in which a role ceases to be required or is materially transformed as a result of operational, organisational, or technological change. The critical distinction is between the elimination of a role and the replacement or reconfiguration of the work associated with that role. While organisational change may justify workforce adjustments, it does not, without more, establish that specific roles have genuinely become redundant.
Where the relationship between organisational change and role elimination is not clearly established, it becomes difficult to distinguish between:
- genuine redundancy; and
- reconfiguration of work under different arrangements.
In practice, this distinction is not always immediately apparent. The same functions may continue to be performed, albeit under altered structures, different contractual arrangements, or through third-party engagement. In such circumstances, the absence of clarity as to what work has ceased, what work remains, and how responsibilities have been redistributed creates uncertainty as to whether redundancy reflects necessity or restructuring of the workforce.
This is not to suggest that all restructuring is improper. Rather, it underscores the need for careful scrutiny of the link between operational change and role displacement. Without this linkage, redundancy risks being treated as a matter of form rather than substance.
- Adequate disclosure plays a central role in resolving this question. It enables the union to examine:
- whether the functions performed by affected employees are genuinely no longer required;
- whether those functions will continue in another form; and
- whether alternatives to termination exist within the reorganised structure.
In the absence of such disclosure, the distinction between genuine redundancy and workforce reconfiguration becomes blurred, and consultation is deprived of its substantive purpose.
This brings the analysis back to the central role of disclosure: without sufficient particulars at the outset, the genuineness of the redundancy cannot be properly assessed, and consultation risks proceeding on an unverified foundation.
Consultation Beyond Severance
Consultation under Section 65 encompasses more than severance arrangements. It includes:
- consideration of whether redundancy can be avoided.
- evaluation of possible redeployment or restructuring alternatives.
- measures to minimise adverse effects.
Where consultation begins with severance discussions, it may indicate that the outcome has effectively been predetermined, rather than subjected to examination.
Industrial Relations Practice and Good Faith
The statutory framework aligns closely with established principles of industrial relations. Effective engagement requires:
- transparency, through the provision of adequate information;
- good faith, reflected in responsiveness to reasonable requests;
- process discipline, particularly in respecting the sequence of disclosure and consultation.
Where these elements are present, even difficult outcomes can be managed constructively. Where they are absent, disputes are more likely to escalate.
Institutional Practice and Process Discipline
Institutions responsible for labour administration play an important role in facilitating engagement. However, facilitation must be consistent with statutory requirements. Encouraging parties to proceed with consultation in the absence of adequate disclosure risks conflating engagement with compliance and may undermine the structure of Section 65.
In practice, situations may arise where the Labour Department encourages or directs the parties to proceed with negotiations, including discussions on severance. While such guidance is often intended to facilitate engagement, it does not displace the statutory requirements under Section 65 of Act 651.
In circumstances where sufficient information has not been provided, it is consistent with both law and industrial relations practice for trade unions to maintain their insistence on compliance with Section 65(1)(a) before proceeding further. Proceeding to negotiations in the absence of adequate disclosure risks undermining both the legal integrity of the process and the quality of engagement.
Where an employer continues to insist on negotiations without addressing disclosure concerns, the appropriate course is escalation within the legal framework. In such instances, referral to the National Labour Commission enables an independent determination of compliance and helps preserve the integrity of the process.
Restoring Process Integrity
A coherent approach to redundancy under Section 65 requires:
- adequate and timely disclosure.
- consultation grounded in sufficient information.
- adherence to the sequence established by law.
These elements are not procedural formalities; they are essential to the legitimacy and effectiveness of the process.
Conclusion
Redundancy is not merely a matter of negotiation. It is a structured legal process designed to ensure fairness, transparency, and accountability.
A disclosure-centered interpretation of Section 65 strengthens this process by ensuring that consultation is meaningful and that decisions are open to scrutiny.
Where disclosure is insufficient, consultation cannot achieve its purpose. And where consultation cannot achieve its purpose, the integrity of the redundancy process is compromised.
Author
Kenneth K. Koomson
HRM, LL. B, LL.M, IR
Deputy Secretary-General, GFL
Author Bio
Kenneth K. Koomson is a labour relations practitioner and policy advocate with extensive experience in collective bargaining, industrial dispute resolution, and labour law reform. He serves as Deputy Secretary-General of the Ghana Federation of Labour (GFL), where he is actively engaged in national labour policy and social dialogue.