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Pecuniary punishment at workplaces

Pecuniary punishment at workplaces

Employers in their anxiety to ensure punctuality and work attendance tend to impose financial sanctions on their workers.

It usually takes the form of asking the worker arriving late to go back home and to be marked absent.

Consequently, workers absenting themselves get the number of days aggregated at the end of the month and offset against their salary. Of course, time is money and manhours lost naturally translates into productivity lost and for that matter loss of profitability.

The private sector, with a high profit motive, will always frown on any tendency that lowers profitability and will take immediate steps to avert manhours lost, including imposition of financial sanctions.

Risk

Employers using this approach run the risk of being sued by workers for violating clear provisions of the Labour Act, 2003 (Act 651), particularly, permanent workers who draw salary.

The employer may get away with it, if the worker is a wage earner, who is daily-rated and employed “at will”. By law, wage earners are paid daily based on attendance and, theoretically speaking, bring the contract to an end at the end of each day.

For administrative convenience, however, their wages are aggregated and paid bulk as accrued at the end of the month.

In the case of salary workers, however, the employment relationship is considered to be more permanent to the extent that they receive monthly salary regardless of actual attendance. Personal circumstances of the worker may require them staying away from work and yet receiving their salary.

Their employment relationship is regulated by the company’s Conditions of Service in a non-unionised environment and the Collective Agreement (CA) in unionised environment.

Procedures

Every Condition of Service document or CA has clauses for disciplinary procedure and in the converse grievance procedure.

The procedure(s) have elaborate provisions for “principles of natural justice” to the extent that the offending worker is expected to be given the opportunity to state his case and explain his side of the story, including the reasons for arriving late for work or absenting himself from work.

Failure to follow this procedure may render the employer guilty of violating provisions of either the Conditions of Service or the Collective Agreement. Incidentally, such provisions have the effect of law once the parties agree to be bound by them.

Law

It is worthy of note that the Labour Law has carefully made provisions for Prohibited as well as Permitted Deductions per Sections 69 and 70 of Act 651. Section 69, among others, provides as follows:

“An employer shall not impose a pecuniary penalty upon a worker for any cause whatsoever or deduct from remuneration due to a worker unless the deduction is permitted by Section 70 or by any other law or is by way of repayment of an advance of remuneration lawfully made by the employer to the worker”.

Per Section 70 on Permitted Deductions, statutory deductions as well as loans taken and losses suffered as a result of the negligence of the worker are permitted to be deducted from the worker’s salary. Again, Provident Fund contributions and deductions towards employee welfare schemes are permitted.

The employer is thus, not permitted, under any circumstances to impose pecuniary sanctions on the worker, save of course, after concluding the Disciplinary Procedure and applying the appropriate penalty clearly defined under the schedule of offences and corresponding sanctions.

In sum, the imposition of pecuniary penalty is illegal and may be declared as such by the Law Courts with the obvious consequences, including damages, award of costs and embarrassment to Management as well as damage to the corporate brand.

An exception, though, is the Mining Act (Act 703) 2006, which allows imposition of fines on mining companies for violation of mining regulations by employees. Such a fine may be offset against the employee’s earnings if proven guilty.

The writer is the President and a Fellow of the Institute of Human Resource Management Practitioners (IHRMP) Ghana,
E-mail: [email protected]

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