GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
Transfers The Labour Act recognises that a merger or acquisition may result in job losses. However, there is no auto - matic right of transfer for employees of an acquired or merged entity. Whether an employee retains their employment depends on the terms of their existing contract of employment and the terms and conditions of the transaction. Where a transfer does take place, the new entity is required to enter into new employment contracts with the transferred employees. Under Regulation 30 (1) of the Labour Regulations, 2003, the validity of any assignment of an employment contract in a private M&A transaction is subject to the employee’s consent and the endorsement of the Chief Labour Officer. Where an employee is not retained, or where the employee fails to give consent to the assignment, the employee is entitled to redundancy compensation. Collective Agreements Collective agreements remain binding on the acquiring entity following the integration of the companies. As a result, the acquirer may inherit obligations relating to wages, benefit structures, and grievance procedures as set out in the applicable collective agreement. Pension Schemes All pension schemes in Ghana are governed by the National Pensions Act, 2008 (Act 766), which estab - lished the National Pensions Regulatory Authority (NPRA) as the pensions regulator. Under the Ghanaian pensions regime, the acquiring entity is required to make the prescribed pension con - tributions for any employees it continues to employ. The acquiring entity may maintain the pension scheme operated by the target company or make limited vari - ations to the existing scheme, subject to applicable legal requirements. Statutory Compliance The purchaser is required to comply with minimum wage and overtime regulations, applicable health and safety standards, and statutory contribution obliga -
tions under the Social Security and National Insur - ance Trust (SSNIT) and the National Health Insurance Scheme (NHIS). Employee Benefits and Entitlements The acquiring entity is required to honour accrued employee benefits, including annual leave, gratuities, severance pay, and outstanding pension obligations. Employees are entitled to fully paid leave for each cal - endar year of continued service. A change in ownership or management does not interrupt an employee’s continuity of service. Accord - ingly, employees retain all accrued leave and related employment benefits in any business combination involving a change in ownership or management. 2.6 National Security Review There is no specific national security review of acquisi - tions. However, in specific sectors like banking, insur - ance, mining and petroleum, regulators may assess the national/public interest and security concerns prior to approving the transaction. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Ghana has not seen a single landmark M&A judg - ment in the past three years. However, there has been increased constitutional and regulatory scrutiny of M&A transactions. The recent Supreme Court decision in the 2024 case of Mahama Ayariga v Attorney General, Parliament of Ghana, Ghana Amalgamated Trust PLC and National Trust Holding Company is noteworthy in the context of M&A transactions involving state-owned or state- backed entities and public-interest financing. The significance of this case lies in the clarification that acquisitions by state-owned or state-backed enti - ties require parliamentary approval. Failure to obtain such approval may result in delays or may invalidate the transaction.
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