Imagine you walk into the office like any other day and within a few minutes or hours later, you hear the HR’s summons only to be given a sack or termination letter. Such an encounter can be very devastating and troubling.
But amid the disappointment, there is a silver lining. According to career coach Dickson Assan, the panic is normal, but the ignorance that comes with it doesn’t have to be. Under the Labour Act, 2003 (Act 651), a termination isn’t just a handshake and a security escort.
The career coach says the termination comes along with a legally approved bill, and the law expects your employer to pay it and do so quickly.
The Anatomy of Your Exit Cheque
The experienced career coach makes the mathematics very practical. Using a hypothetical situation, Assan worked an example with a worker on a basic salary of GHS 9,000, plus GHS 1,000 rent allowance and GHS 1,500 responsibility allowance, terminated with immediate effect on 17 August.
He reveals that the termination entitlement isn’t one lump sum; it’s four separate streams stacked together. He therefore outlines all of them;
Notice pay: With a one-month notice period in the contract but termination taking effect immediately, that’s a full month’s basic salary, which in this case is GHS 9,000.
Salary earned to date: Pro-rated pay for days actually worked in the month, roughly GHS 4,500.
Non-discretionary allowances: Rent and responsibility allowances, pro-rated the same way; about GHS 1,250.
Unused annual leave: Out of 20 days entitled per year, with roughly 12.55 accrued by mid-August and 3 already taken, that leaves 9.55 unused days, worth close to GHS 3,906.
Add it up, and you land at roughly GHS 18,656 in gross entitlements, which is subject to PAYE deductions. And the law isn’t relaxed about timing either. He reveals that Act 651 requires this to be paid no later than the next working day after termination. Not end of month and not when accounts get to it but the next working day.
Why Everybody’s Payroll Divides By 22
Here’s the part that trips people up when they try to calculate their own daily wage: why 22?
For a five-day working week, there are roughly 260 working days in a year. Divide that by 12 months, and you get 21.67, rounded up to the 22 working days a month that payroll departments across the country quietly build their formulas on.
So the next time HR hands you a termination letter, you should already be able to do the maths in your head before Accounts even opens the spreadsheet.
No Contract? Know Your Comfort
However, there is an uncomfortable twist. All of this assumes you have a clear employment contract spelling out your basic salary, allowances, and notice period. Without one, proving what you’re owed becomes a fight instead of a formula.
In this situation, he used the current social media trend to say, “3ne3 w’akyi gu ho sei potoo”, to literally mean you are naked.
For him, he insists that it is very critical for all employees to know their basic salary versus their allowances. Know which allowances are discretionary and which aren’t. Know your leave balance. And keep a copy of your contract somewhere.
Career coach says termination will always sting. But walking out without knowing what’s legally yours? That’s the part actually within your control.
He was quick to add that this position reflects the general position of the Labour Act, 2003 (Act 651). Specific entitlements may differ depending on the terms of an individual’s employment contract, any applicable collective agreement, company policy, and the particular circumstances of the termination.
