Pakistan’s Labour Law: Understanding Employee Rights and Entitlements

Labour laws play a crucial role in ensuring fair treatment, protection, and well-being of employees in a country. In Pakistan, there are more than 16 laws that mandate compliance and are applicable to various organizations, commercial establishments, industrial establishments, and factories. These laws cover a range of aspects, from employee benefits to working hours, overtime, and leaves. In this article, we will explore the key labour laws in Pakistan and understand the rights and entitlements they provide to employees.

Key Labour Laws in Pakistan:

Let’s take a look at some of the essential labour laws in Pakistan:

a. Employee’s Old Age Benefits Act, 1976: This act provides for retirement benefits to employees, including pensions and other social security benefits.

b. Provincial Employees Social Security Ordinance (PESS), 1965: This ordinance ensures social security benefits for employees, such as medical care, maternity benefits, and more.

c. The Industrial And Commercial Employment Ordinance (Standing Orders), 1968: This ordinance outlines the conditions of employment and regulates the relationship between employers and employees.

d. Punjab Shops And Establishments Ordinance (The Ordinance), 1969: It covers the regulation of working hours, leaves, and other conditions of work in shops and commercial establishments.

e. Minimum Wages Ordinance, 1961: This ordinance sets the minimum wages for employees to protect them from exploitation.

f. Payment Of Wages Act, 1936: It ensures the timely payment of wages to employees and prohibits unauthorized deductions.

g. Companies Profits (Workers Participation) Act, 1968: This act promotes the participation of workers in the profits of companies.

h. The Factories Act, 1934: It aims to regulate the working conditions in factories, ensuring the safety, health, and welfare of workers.

i. Workmen’s Compensation Act, 1923: This act provides compensation to workers or their dependents in case of injury, disability, or death arising out of and during the course of employment.

j. West Pakistan Maternity Benefit Ordinance, 1962: It grants maternity benefits to female employees.

k. Apprenticeship Ordinance, 1962: This ordinance deals with the regulation and control of apprenticeship training.

l. Disabled Persons (Employment And Rehabilitation) Ordinance, 1981: It promotes the employment and rehabilitation of disabled persons.

m. Workers’ Welfare Fund Ordinance (WWF Ordinance), 1971: This ordinance establishes a fund for the welfare of workers.

n. Punjab Industrial Relations Act, 2010: It governs industrial relations and resolution of industrial disputes in the province of Punjab.

o. Industrial Relations Act, 2012: It provides a framework for resolving industrial disputes and promoting harmony between employers and employees.

• Minimum Wage in Pakistan:

The minimum wage in Pakistan is set by the government annually. As of 2021-2022, the current minimum wage is PKR. 20,000 per month. Different regions have their own minimum wage laws, such as:

• The Minimum Wages Ordinance, 1961 (applicable in ICT and Balochistan).
• Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 (no longer in use after the 18th Amendment).
• The Minimum Wages Ordinance, 1961 (adapted in Punjab by 2012 Amendment Act).
• The Khyber Pakhtunkhwa Minimum Wages Act, 2013.
• Sindh Minimum Wages Act, 2015.
• Working Hours and Rest Time:

The daily working hours range from 8 to 9 hours each day, with a maximum of 48 hours per week. During the holy month of Ramadan, working hours are reduced by 2 to 3 hours daily. If the work is deemed strenuous, the regulatory government authority can further reduce the working hours.

Rest time is also provided to employees based on their working hours:

• Every 6 hours of work, 1 hour of rest.
• More than 5 hours of work, 30 minutes of rest.
• More than 8.5 hours, 2 intervals of 30 minutes rest.
• Overtime and Overtime Pay:

Overtime may range from 2 to 3 hours daily, depending on business needs. Daily spread over (time from entry to exit from the workplace) is 12 hours.

To calculate overtime pay:

Overtime Pay = (Monthly Gross Salary x 2 x No. of Overtime Hours) / (Working Days in a Month x 8)

For railway workers, the overtime rate of pay is one and a quarter times their regular pay (1.25x).

• Types of Leave:

a. Paid Leave:

i. Annual Leave: Employees are entitled to 14 calendar days of annual leave annually. If it is not possible to take the annual leave consecutively, the balance can be carried forward to the next year, up to a maximum of 14 days.

ii. Sick Leave: Employees in the government sector are entitled to receive sickness benefits throughout the period of sickness. For specific illnesses like tuberculosis and cancer, they may receive 100% of wages (50% in Khyber Pakhtunkhwa and Balochistan) for 365 days in a year. For other illnesses, they can receive 75% of wages (50% in Khyber Pakhtunkhwa and Balochistan) for 121 days in a year. In the private sector, employees are entitled to 10 days of sick leave if hospitalization is not necessary, and up to an additional 30 days if hospitalization is required. Prolonged illnesses may be granted full pay sick leave up to six consecutive months, followed by another six consecutive months with half pay and then another six consecutive months without pay.

iii. Maternity Leave: There are four laws that cover maternity leave and associated benefits in Pakistan. Employed women are entitled to a maximum of 12 weeks of fully paid maternity leave, which can be taken six weeks before the expected birth date and six weeks after delivery. The female employee must be employed for at least four months preceding the date of delivery.

iv. Paternity Leave: Male employees expecting their wives to give birth to a child can avail paternity leave on full pay for up to thirty days, which may not be granted for more than three times in their entire service, except when granted within their leave account due and admissible to them or as extraordinary leave without pay.

v. Pilgrimage Leave: Muslim employees are entitled to an unpaid leave of up to 30 days for the purpose of pilgrimage, which may be taken only once during their course of employment.

b. Public Holidays:

Public holidays in Pakistan are determined by the government and may vary each year. Some of the common public holidays include Kashmir Day, Pakistan Day, Labour Day, Eid-ul-Fitr Holiday, Eid al-Adha Holiday, Independence Day, Eid Milad-Un-Nabi, and Quaid-e-Azam Day.

• Statutory Contributions:

Qualifying conditions for gratuity entitlement include the applicability of the relevant Industrial and Commercial Establishments (Standing Orders) Ordinance, 1968, being a permanent workman, and having a minimum qualifying employment period of twelve months or above.

Qualifying events for gratuity include resignation, termination by the employer for reasons other than misconduct, death while in service of the employer, and reaching the superannuation age and retiring.

The rate of gratuity is “thirty (30) days’ wages for every completed year of service or any period in excess of six months,” and any employment period exceeding six months will be considered as one year.

• Termination and Severance:

The notice period for termination depends on the type of employment contract. Limited/short-term contracts are subjected to the notice period mentioned in the contract, while unlimited/long-term contracts follow the notice period specified in the contract. Severance pay or entitlements may be provided as agreed upon between the employer and the employee, not exceeding the equivalent of three months’ gross wages.

Understanding Pakistan’s labour laws is essential for both employers and employees to ensure a fair and harmonious work environment. These laws provide various rights and entitlements to employees, including minimum wages, working hours, leave benefits, and statutory contributions like gratuity. Employers should adhere to these laws to create a positive and compliant workplace, while employees should be aware of their rights to protect themselves from exploitation. A well-balanced understanding and implementation of labour laws contribute to a thriving workforce and a progressive economy in Pakistan.

The Constitution of Islamic Republic of Pakistan: Safeguarding Labour Rights

The Constitution of Islamic Republic of Pakistan serves as a vital document that guarantees the protection of various fundamental rights, including those of the workers. It provides a comprehensive framework for policy formulation and labour legislation to ensure the welfare and well-being of the workforce. This article highlights the key articles of the Constitution that specifically relate to labour rights and elucidates their significance in upholding workers’ dignity and rights.

• Article 3: Prohibition of Exploitation
• Article 3 of the Constitution explicitly prohibits all forms of exploitation. This fundamental principle ensures that no individual can be subjected to any form of forced labour, child labour, or human trafficking. It reflects Pakistan’s commitment to eradicate exploitative practices and create a fair and just society.
• Article 4: Right to Equal Protection of Law
• Article 4 upholds the right of every citizen to enjoy the protection of law and be treated in accordance with the law. This inalienable right extends to workers, ensuring that they are not subject to discrimination or unfair treatment based on their occupation, gender, or any other grounds.
• Article 11: Abolition of Slavery and Forced Labour
• Article 11 unequivocally prohibits slavery and all forms of forced labour, including child labour. This provision reflects Pakistan’s commitment to safeguarding the rights and dignity of all individuals, especially the vulnerable sections of society.
• Article 17: Freedom of Association
• Article 17 guarantees freedom of association to every citizen, allowing them to form unions or associations to protect their collective interests. While this right is subject to reasonable restrictions in the interest of public order and morality, it provides workers with a platform to voice their concerns and negotiate for better working conditions.
• Article 18: Right to Employment and Trade
• Article 18 grants citizens the right to choose any lawful profession, occupation, trade, or business. This provision ensures that individuals have the freedom to pursue their preferred career paths without facing unjust barriers.
• Article 25: Right to Equality
• Article 25 ensures equality before the law and prohibits discrimination based on sex alone. This principle plays a significant role in ensuring that male and female workers receive equal treatment and opportunities in the workplace.
• Article 25-A: Right to Free and Compulsory Education
• Article 25-A guarantees free and compulsory education for all children aged 5 to 16 years. By providing access to education, the Constitution aims to empower future generations and break the cycle of child labour.
• Article 37(c): Right to Social Security
• Article 37(c) entitles all citizens of Pakistan to social security through compulsory social insurance or other means. This provision ensures that workers have access to social protection and support during times of need.
• Article 37(e): Protection of Children and Women in Employment
• Article 37(e) ensures secure and humane conditions of work for all employees, especially children and women. It prohibits their employment in vocations unsuited to their age or gender, safeguarding their rights and well-being.
• Article 38(b): Right to Adequate Livelihood
• Article 38(b) mandates the state to provide all citizens with facilities for work and an adequate livelihood, along with reasonable rest and leisure. This provision emphasizes the government’s responsibility to create an environment conducive to the well-being and prosperity of the workforce.
• Article 38(c): Social Security for Employees
• Article 38(c) extends social security provisions to all persons employed in the service of Pakistan or otherwise. It emphasizes the importance of ensuring social protection for employees through compulsory social insurance or other means.
• Article 38(d): Provision of Basic Necessities of Life
• Article 38(d) mandates the state to provide basic necessities of life, such as food, clothing, housing, education, and medical relief, to all citizens unable to earn their livelihood due to infirmity, sickness, or unemployment. This provision underlines the government’s commitment to addressing the needs of the most vulnerable sections of society.

The Constitution of Islamic Republic of Pakistan stands as a robust legal framework that upholds the rights of workers and ensures their protection from exploitation and discrimination. The highlighted articles play a crucial role in promoting fair and just working conditions, social security, and the overall welfare of the workforce. Josh and Mak International acknowledges the significance of these constitutional provisions and remains committed to advocating for workers’ rights and a thriving work environment in Pakistan.

Pakistan’s International Commitments: Ensuring Decent Work and Labour Rights

Pakistan, as a responsible member of the international community, is dedicated to upholding human rights and ensuring decent work conditions for its workforce. The Constitution of the Islamic Republic of Pakistan, along with various international declarations and conventions, forms the foundation for protecting workers’ rights and eradicating exploitation. In this article, we explore Pakistan’s commitments to the United Nations (UN) and the International Labour Organization (ILO), and how these commitments reinforce the nation’s dedication to promoting decent work and sustainable economic growth.

Pakistan’s Commitments to UN Human Rights Declarations and Conventions:

Pakistan is a signatory to various UN Human Rights Declarations and Conventions, demonstrating its commitment to protecting and promoting human rights. These include the UN Convention on Economic, Social and Cultural Rights, the UN Convention on Civil and Political Rights, the UN Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), the UN Convention on Child Rights, and the UN Supplementary Convention on Abolition of Slavery.

These conventions emphasize the importance of ensuring fair working conditions, social protection, and equal treatment for all citizens, irrespective of their gender, race, or creed. Additionally, Pakistan has ratified 36 ILO Conventions, including the 8 Core Labour Conventions, which are essential for retaining Pakistan’s Generalized Scheme of Preferences (GSP+) status.

GSP+ Status and Compliance with Core Labour Conventions:

Under the GSP+ regime, Pakistan must adhere to strict conditions, including compliance with the 8 Core Labour Conventions set forth by the ILO. These conventions cover various aspects, such as forced labour, freedom of association, collective bargaining, equal remuneration, abolition of forced labour, non-discrimination in employment, minimum age, and the worst forms of child labour. By complying with these conventions, Pakistan ensures that its workers’ rights are protected and labor conditions are in line with international standards.

Sustainable Development Goals (SDGs) and Decent Work:

The SDGs, particularly Goal 8, “Decent Work and Economic Growth,” aim to achieve full and productive employment, decent work for all, and eliminate child and forced labor. To attain these goals, Pakistan is focusing on promoting decent work in the rural economy, creating job opportunities for youth and vulnerable groups, strengthening compliance with International Labour Standards (ILS) through social dialogue, and enhancing the national social protection framework.

ILO’s Decent Work Country Program for Pakistan-III (DWCP-III):

The ILO’s DWCP-III for Pakistan is centered on four priority areas: promoting decent work in the rural economy, generating employment for youth and vulnerable groups, enhancing ILS compliance through social dialogue, and developing a national social protection framework. This program is dedicated to eliminating child and bonded labor, ensuring workplace compliance through effective monitoring and labor inspections, extending social protection to workers in the informal sector, and promoting safe working environments for all workers, including migrant and domestic workers.

Pakistan’s international commitments to human rights and decent work are vital in safeguarding the rights and welfare of its workforce. By adhering to international conventions and promoting sustainable economic growth, Pakistan reaffirms its dedication to creating a fair and just society where workers are protected against exploitation and discrimination. Through continued cooperation with international bodies like the UN and ILO, Pakistan can strive towards achieving the Sustainable Development Goals and ensuring a better future for its workers and citizens alike.

Employment Law in Pakistan: Ensuring Fairness and Protection for Workers

Pakistan, with its federal democratic system based on Islamic principles of social justice, has a rich history of legislations governing labor rights. The Constitution of Pakistan enshrines various provisions safeguarding the rights of workers, prohibiting discrimination, and ensuring the freedom of association. However, the implementation and effectiveness of these laws have been subject to various challenges and historical shifts between civilian and military rule. In this article, we will delve into the evolution of labor laws in Pakistan and explore the need for comprehensive protections for workers.

Historical Development of Labor Laws:

In the aftermath of independence, Pakistan inherited labor legislations from British India, including the Trade Union Act 1926 and the Industrial Employment Act 1946. These laws were progressive, granting workers the right to form trade unions and engage in collective bargaining and strikes. The Trade Union Ordinance 1960 emphasized compulsory recognition of trade unions by employers and addressed unfair labor practices.

During different regimes, labor legislation underwent changes and reforms. The Industrial Dispute Act 1926 was replaced by the Industrial Dispute Ordinance 1959 during Ayub Khan’s regime, which expanded the public sector and introduced a compulsory adjudication system. In subsequent regimes, the focus shifted towards detaching trade unions from politics while remaining plant-based.

Modern Labor Laws and Challenges:

Over time, labor policies have been announced, aiming to address labor issues. Between 2000 and 2002, several laws were consolidated into six draft laws, covering industrial relations, employment conditions, payment of wages, occupational safety and health, labor welfare, and human resources development.

Despite these efforts, challenges persist. Different provinces have varying labor laws, with Punjab allegedly enacting anti-labor provisions. The major sources of employment law in Pakistan include the West Pakistan Shops and Establishments Ordinance 1969, West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968, and other statutes addressing maternity benefits, compensation for injuries, and workers’ participation in profits.

Addressing Discrimination:

The Constitution of Pakistan guarantees equal opportunity employment and prohibits discrimination based on sex, race, age, political opinion, philosophical belief, or religion. Employers are prohibited from discriminating against individuals with special needs or disabilities during recruitment and selection.

Probation Period and Work Permits:

Employment contracts typically include a three-month probation period, during which either party can terminate the contract without notice or compensation. Work permits are essential for foreign employees seeking to work in Pakistan legally. These permits are granted for one year with the possibility of extension and involve a thorough application process.

The Path Forward:

While progress has been made in safeguarding workers’ rights, challenges remain. The existing labor laws need to be harmonized across provinces to provide equal protection to workers nationwide. Special emphasis should be placed on providing comprehensive safeguards for white-collar employees, ensuring they have access to redressal mechanisms, fair termination procedures, and protection from unfair labor practices.

The labor laws in Pakistan have evolved over time to address the rights and protections of workers. However, discrepancies among provincial laws and challenges in implementation call for comprehensive reforms. Ensuring equal protection for workers, including white-collar employees, is essential for fostering a fair and competitive job market. Harmonizing labor laws, enhancing workers’ access to redressal mechanisms, and strengthening protections against discrimination are steps toward a more equitable and thriving workforce in Pakistan.

Employment Contracts in Pakistan: Understanding General Principles and Contract Types

In Pakistan, employment contracts play a crucial role in formalizing the relationship between employers and employees. These contracts define the terms and conditions of employment, ensuring clarity and protection for both parties. Let’s explore the general principles governing employment contracts and the different types of contracts in the country.

General Principles of Employment Contracts:

• Employer and Employee Definitions:
• An “employer” refers to a real or corporate person or a non-corporate institution that employs workers.
• An “employee” is a real person who works under an employment contract and provides services to an employer in exchange for wages.
• Definition of Employment Contract:
• An “employment contract” is an agreement between an employer and an employee, where the employee commits to working for and under the management of the employer in return for a wage.
• Written and Unwritten Contracts:
• In some cases, such as employees in other establishments, domestic servants, farm workers, or casual labor engaged by contractors, labor contracts may be unwritten. These contracts can still be enforced through the courts based on oral evidence or past practices.
• Obligatory Contents of Employment Contracts:
• Every employer in an industrial or commercial establishment is required to issue a formal appointment letter to each employee at the time of employment. The labor contract should include the main terms and conditions of employment, nature and tenure of appointment, pay, allowances, fringe benefits, and other admissible terms and conditions.
• Mandatory Information in Employment Contracts:
• All employment contracts must state:
  • Names of both parties (employer and employee)
  • Starting date of employment (in case of indefinite contracts) or the expected duration (for fixed-term contracts)
  • Job title or a brief description of the work
  • Place of work
  • Wages
  • Terms and conditions relating to hours or days of work
  • Notice period for termination

Contract Types in Pakistan:

• Regular Employment Contracts:
• Every employee, at the time of appointment, transfer, or promotion, should be provided with a written order that outlines the terms and conditions of their service.
• Certificate of Service:
• Every employee is entitled to a written certificate of service at the time of dismissal, discharge, retrenchment, or retirement from service. This certificate serves as proof of their employment history.
• Contract Employee:
• Sindh and Khyber Pakhtunkhwa legislation define “contract employees” as those who work on contract basis for a specific period mentioned in the contract. These employees are not considered third-party employment.
• No Objection Certificate (NOC) for Contract Jobs:
• In Khyber Pakhtunkhwa, employers must obtain a No Objection Certificate (NOC) from the Labor Department for contract jobs. The NOC is issued for a specific period (usually six months) and contains conditions related to the job and employment of contract workers.

Employment contracts are essential for establishing clear and fair working relationships between employers and employees in Pakistan. These contracts should encompass all relevant terms and conditions to protect the rights and interests of both parties. Understanding the different types of contracts and adhering to the legal requirements will contribute to a harmonious and productive work environment in the country.

Understanding Different Types of Employment Contracts in Pakistan

In Pakistan, employment contracts come in various forms, each serving different purposes and providing varying levels of job security. Employers are required by the Labour Law to provide written employment contracts to their employees, outlining the terms and conditions of their service. Let’s explore the different types of employment contracts recognized in Pakistan:

Permanent Employment Contract:

A permanent employment contract is the most common type of contract, offering long-term job security to employees. It is usually without a fixed end date and continues until either the employer or employee terminates it.

Probationary Employment Contract:

Probationary contracts are designed to assess an employee’s suitability for a position. During this period, the employer evaluates the employee’s performance and abilities before confirming their permanent employment. Once an employee satisfactorily completes the probationary period (typically three to six months), they become permanent.

Badli (Alternate) Employment Contract:

A “Badli” is an employee who temporarily fills in for a permanent or probationary employee who is absent. This type of contract is temporary and ends when the original employee returns to work.

Temporary Employment Contract:

A temporary contract is used for employees hired for a specific project or task with a defined end date. The maximum length of a fixed-term contract, including renewals, is generally limited to nine months. After this period, the employee must be either offered a permanent position or released from service.

Apprenticeship Contract:

An apprenticeship contract is entered into when an individual undergoes training through a structured apprenticeship program. The contract outlines the terms and conditions of the training period and the responsibilities of both parties.

Contract Worker:

Contract workers are employees who work on a piece-rate basis or for a specific period under a contractual arrangement. The terms and conditions of their employment are defined in the contract.

It’s important to note that if an employment contract negotiated between an employer and an employee contains terms that differ from those provided in labor laws, the contract’s terms will take precedence over the general labor law provisions.

Employment contracts in Pakistan come in various forms, providing different levels of job security and terms of employment. Employers are legally required to provide written contracts to their employees, detailing the terms and conditions of their service. Understanding the different types of contracts and their implications will help both employers and employees establish transparent and fair working relationships.

Forced Labor and Child Labor in Pakistan

Forced Labor:

Forced or compulsory labor, as defined by the International Labour Organisation (ILO), refers to any work or service exacted from a person under the threat of penalty or coercion. In Pakistan, forced labor is a serious issue, with some workers falling into bonded labor situations. Bonded labor is when individuals are forced to work for a creditor in exchange for a monetary advance and face restrictions on their freedom of movement or occupation until the debt is paid off. This practice is akin to slavery, as debtors may be subjected to exploitative conditions for extended periods, and the debt can even be passed on to future generations.

Indicators of Bonded Labor:

Various indicators can help identify bonded labor practices in workplaces:

• Wage Rates: Employees being paid wages below the minimum wage or those subjected to undue wage deductions may indicate bonded labor.
• Payment Arrangements: When wages are not directly paid to the employee but instead go to someone else, it can be indicative of bonded labor.
• Working Hours: Excessive working hours beyond what the law allows, such as overtime without proper compensation, can be a sign of bonded labor.
• Freedom of Employment: If an employee is unable to leave their work after giving notice and move to another place to start new work, it could signal bonded labor.
• Freedom of Business: Restricting employees from selling their produce in the market can be an indicator of bonded labor.
• Working under “Peshgi”: While advances from employers are common, employees working under “Peshgi” conditions can indicate bonded labor if it leads to a situation of bondage.
• Documentation: Employers holding employees’ identity documents can be a sign of bonded labor.

Laws Against Forced Labor:

Pakistan’s Constitution prohibits forced labor. Several laws have been enacted to combat bonded labor, including:

• Bonded Labour System (Abolition) Act 1992
• Bonded Labour System (Abolition) Rules 1995
• Sindh Bonded Labour System (Abolition) Act 2015
• Khyber Pakhtunkhwa Bonded Labour System (Abolition) Act 2015
• Punjab Bonded Labour System (Abolition) Act 1992 (Amendment, 2012)
• Gilgit-Baltistan Bonded/Forced Labor System (Abolition) Act 2020
• Punjab Prohibition of Child Labour at Brick Kilns Act 2016
• Prevention of Trafficking in Persons Act 2018
• Pakistan Penal Code 1860

Child Labor:

The Constitution of Pakistan prohibits the employment of children under the age of 14 years in any factory, mine, or hazardous employment. It is also a Principle of Policy of the State to protect children, remove illiteracy, provide free and compulsory education, and prevent their employment in unsuitable vocations.

The Factories Act, 1934, permits the employment of children between the ages of 14 and 18 years in certain conditions, provided they obtain a certificate of fitness from a certifying surgeon. However, the employment hours are limited, and no child or adolescent is allowed to work in a factory between 7 pm and 6 am.

The Employment of Children Act 1991 prohibits children’s employment in specific occupations and processes, and violation of this law can result in penalties.

Forced labor and child labor are serious issues in Pakistan, and various laws have been implemented to combat these practices. Despite legal provisions, the enforcement and eradication of forced labor and child labor require ongoing efforts from the government, civil society, and the private sector to ensure the protection of workers, especially vulnerable groups like children and bonded laborers.

Employment duties, pay, benefits, and deductions in Pakistan

Employer’s Duties:

• Ensuring the health, safety, and welfare of employees at work.
• Providing a workplace free of harassment and risks to employees’ health.
• Enforcing decisions of the occupational health and safety board.

Employee’s Duties:

• Performing employment duties with diligence and care.
• Following employer’s orders within the scope of employment and without endangering themselves or contravening any regulations.
• Complying with health and safety instructions.
• Taking care of employer’s property in their possession or control.
• Not competing with the employer’s business.
• Not disclosing the employer’s confidential information.

Pay and Benefits:

• The payment of wages is an essential part of the employment contract.
• Wages can be paid in cash or kind, on various bases (yearly, monthly, weekly, etc.).
• “Basic salary” is the wage in the employment contract, excluding allowances.
• “Allowance” includes various types of payments.
• “Additional payment” refers to discretionary, non-recurring, or expressly agreed upon payments.
• The employee’s remuneration is the sum of the wage and any additional payments.
• Overtime pay is double the rate of ordinary pay.
• Conveyance allowance is part of the wages.

Payment of Wages:

• Employers are required to pay wages on a working day.
• Payment must be made in cash or currency notes (not by cheque).
• Payment should be made within a specific period from the end of the wage period (7 days for fewer than 1000 employees, 10 days for more than 1000 employees).
• Employees discharged from work should be paid within two working days.

Disabled Persons:

• Disabled persons’ terms and conditions of employment should not be less favorable than those of other employees.
• Employers who do not employ disabled persons must contribute to the Disabled Persons Rehabilitation Fund.

Deductions from Wages:

• Deductions are allowed for fines, absence from duty, damages or loss of entrusted goods, house accommodation supplied by the employer, amenities and services, recovery of advances or overpayments, income tax, Provident Fund subscriptions, approved co-operative societies or insurance schemes, and war saving schemes.

Fines and deductions for certain acts must be specified in a notice approved by the government.

It’s important to note that labor laws can be complex, and it’s always best to consult legal experts or relevant authorities for specific questions or concerns regarding employment and labor regulations in Pakistan.

The social security system in Pakistan, 

The Employees’ Old-Age Benefits Act applies to the private sector in Pakistan.

• The government has created special systems for social security for public-sector employees, members of the armed forces, police officers, employees of statutory bodies, local authorities, and railways.
• The government also manages other social assistance programs for the welfare of destitute and needy citizens.

Benefits under the Employees’ Old-Age Benefits Act:

• Old-Age Pension (or Reduced Pension):
• Available when the employee reaches 60 years of age (55 years for women and male miners engaged in mining for at least 10 years).
• Employee must have at least 15 years of contributions.
• Early retirees (from 55 to 59 for men and 50 to 54 for women) are entitled to a reduced pension, but the pension amount is reduced by 0.5% per month or 6% per year.
• Survivors’ Pension:
• Provided to the survivors of insured employees who have passed away.
• Paid to the widow or widower, children, or dependent parents.
• Invalidity Pension:
• Offered in the case of non-occupational accidents, injuries, or diseases resulting in permanent invalidity.
• The employee must have at least 15 years of contributions or at least 5 years of contributions, with at least 3 years in insurable employment.
• The invalidity pension is paid as long as the invalidity persists.
• Old-Age Grant:
• Given to employees who are not eligible for old-age pension due to not meeting the requirement of 15 years of contributions.
• Employees with at least two years of insurable employment are entitled to a lump sum payment of one month of earnings for each year of insured employment.

Administration:

• The Employees’ Old-Age Benefits Institution (EOBI) manages the implementation and enforcement of the Act.
• EOBI is a semi-autonomous institution under the Ministry of Overseas Pakistanis and Human Resource Development.
• A tripartite corporate Board of Trustees manages the working of EOBI, with government officials, labor, and employer representatives.

It’s important to note that social security systems can be subject to changes and updates, so it’s always best to refer to the most recent and official sources for the latest information on social security benefits in Pakistan.

The Employees’ Old-Age Benefits Act in Pakistan also provides for Dependents’ Benefits or Survivors’ Pension. Here are the key points related to Dependents’ Benefits:

• Survivors’ Pension:
• This benefit is provided after the death of an insured person in insurable employment for a period of at least three years.
• If the deceased had become eligible for old age or invalidity pension, the spouse will receive that pension of the deceased for their lifetime.
• In case of the death of a spouse who was receiving the insured person’s pension, this pension will be divided among their children in equal shares until they attain the age of 18 years.
• If an insured person has not left a spouse or children behind, the parents would be entitled to the survivors’ pension for a period of five years.
• Pension Calculation:
• Pensions are calculated based on a formula: 2% of the average monthly earnings in the last year multiplied by the total number of years of insurable employment.
• Minimum Pension:
• If an employee’s old age or invalidity pension is less than PKR 5250, the employee will be paid the minimum pension.
• If the pension is higher than PKR 5250, the employee will be paid the higher amount.
• Non-Duplication of Benefits:
• The law does not allow duplication of benefits. If an employee is eligible for more than one benefit, they can only receive one benefit, whichever is higher.
• Contributions:
• Employers are required to submit both their and the employee’s contributions to a bank designated by the Employees’ Old-Age Benefits Institution (EOBI) before the 15th of every month.
• Employers have to pay a contribution equal to 5% of the minimum wage, and employees have to pay a contribution at the rate of 1% of the minimum wage.
• The minimum wage rate for federal areas is PKR 13,000, while for Punjab, Sindh, Khyber Pakhtunkhwa (KPK) & Balochistan, it is PKR 8000.
• Federal Government Contribution:
• The federal government may also make contributions to make up any deficiencies in the social security system.

It’s important to keep in mind that social security regulations may be subject to changes and updates, so it’s advisable to refer to the most recent and official sources for the latest information on social security benefits in Pakistan.

Workers Welfare Fund:

• The Workers Welfare Fund is a federally managed fund that operates under the Ministry of Human Resource Development.
• It is an autonomous organization with representation from all tripartite partners (employers, employees, and the government).
• The fund is used for various workers’ welfare initiatives, including constructing residential colonies, schools, dispensaries, and drinking water supply schemes for industrial labor.
• Other benefits include educational scholarships for workers’ children, marriage grants, and death/funeral grants to the family of deceased industrial labor.

Minimum Wage:

• Minimum wages in Pakistan are determined at the provincial level through various ordinances and acts.
• The Minimum Wage Boards are responsible for recommending minimum wage rates for different categories of workers, including time work, piece work, and overtime work.
• The minimum wage rates have seen increases over the years, varying across provinces.

Working Time, Rest, and Holidays:

• The maximum regular working hours for an employee above 18 years of age are 9 hours a day and 48 hours a week.
• For employees below 18 years, the maximum working hours are 7 hours a day and 42 hours a week.
• The weekly rest day is usually Sunday, and employees are entitled to at least 24 unbroken hours of rest per week.
• Employees should be granted a rest break approximately in the middle of the working day, with a minimum interval of one hour for rest or meals.
• After completing one year of service with an employer, employees are entitled to 14 consecutive days of paid annual leave.

Please note that labor laws and regulations in Pakistan can undergo changes, so it’s essential to refer to the most recent and official sources for up-to-date information.If you are looking for recent up to date information, please contact us at aemen@joshandmak.com

Leaves and benefits related to parenthood and work-life balance in Pakistan.

Bereavement Leave:

• Employees are entitled to one day of paid leave in the event of the death of a first-level relative, including father, mother, spouse, child, sister, or brother.
• Proof of the relative’s death, such as an obituary paper, is required when the employee resumes work.

Marriage Leave:

• Employees are granted two days of paid leave for their own marriage, and this benefit can be availed of only once during their employment with the company.

Public Holidays:

• Employees are entitled to a paid day off on national and public holidays.
• Employers may require employees to work on a public holiday but must provide a compensatory day off or pay an additional full day’s wages for each day worked.

Casual Leave:

• Employees are entitled to 10 days of casual leave with full pay.
• An additional 16 days of sick or medical leave are granted on half pay.
• Casual leave is for contingent situations such as sudden illness or urgent purposes.

Maternity Leave:

• Women with at least four months of employment preceding the day of delivery are eligible for 12 weeks (84 days) of maternity leave.
• The leave is granted with full pay, and the employer is prohibited from dismissing a woman on account of pregnancy or maternity leave.
• After maternity leave, women are provided with daily breaks or reduced working hours to breastfeed their child.

The qualifying conditions and duration of maternity leave may vary depending on the specific provincial laws and regulations.

It’s important to note that labor laws and regulations may change over time, so it’s best to refer to the most recent and official sources for up-to-date information on leave and benefits.

Paternity leave, sick leave, and the prohibition of discrimination in the workplace in Pakistan. 

Paternity Leave:

• Employees are granted a maximum of seven days of paternity leave on or immediately before the birth of a child.
• This leave is admissible only twice during the entire period of service.
• The Punjab Civil Servants Act provides paid paternity leave of seven days, which can also be taken twice during the entire service period.
• Employees of Sindh Police and the National Commission on the Status of Women are entitled to 10 days of paternity leave.

Sick Leave:

• Employees are entitled to paid sick leave for ordinary illnesses for a maximum of 121 days in a calendar year.
• In the case of cancer or tuberculosis, employees are entitled to paid sick leave for a maximum of 365 days in a calendar year.
• Sick leave might be extended on an unpaid basis.
• The employer is required to pay 75% of wages last drawn for ordinary illnesses and 100% of last wages for cancer and tuberculosis cases.
• In the case of work accidents, an employee has the right to draw 100% wages for a period of 180 days.
• An employer cannot dismiss or punish an employee during their period of sickness, maternity, injury, or medical care.
• Sick leave must be supported by a medical report from the employee’s attending doctor or the doctor of the organization.

Prohibition of Discrimination:

• The Constitution of Pakistan aims to achieve equality by preventing discrimination based on race, religion, caste, sex, residence, or place of birth.
• Citizens are free to choose their occupation and conduct any lawful trade or business without discrimination.
• Employers must not discriminate against any citizen otherwise qualified for appointment in the service of Pakistan.

It’s important to note that labor laws and regulations may change over time, so it’s best to refer to the most recent and official sources for up-to-date information on paternity leave, sick leave, and anti-discrimination laws in the workplace.

Sexual harassment is strictly prohibited by law in Pakistan and is considered a punishable offense. The law defines sexual harassment as unwelcome and unwanted sexual advances, requests for sexual favors, or any other verbal or physical conduct of a sexual nature that creates a hostile or offensive environment. It is considered a form of violence against both women and men and is viewed as discriminatory treatment.

A person convicted of sexual harassment can face imprisonment for a maximum term of three years or be fined up to PKR 5 Lakh (0.5 million), or both.

Employers are required to ensure that all employees who hold similar positions are treated equally. If an employer sexually harasses an employee, or if an employee faces sexual harassment by another employee at the workplace, and the employer fails to take appropriate measures despite being aware of the harassment, the affected employee may terminate their employment contract before the end of the period or without giving a notice period.

Employers also have the right to terminate the employment contract of an employee who has been found guilty of sexually harassing another employee. Committing sexual harassment using the convenience of working in the same workplace is considered an aggravating factor.

It’s important to create a safe and respectful work environment that promotes zero tolerance for sexual harassment and provides appropriate mechanisms for reporting and addressing such incidents. Employers should take proactive measures to prevent sexual harassment and raise awareness among employees about their rights and the consequences of engaging in such behavior.

The Labour Law in Pakistan strictly prohibits any form of discrimination that undermines equal opportunity employment, equal access to jobs, equal continuity of employment, or equal enjoyment of rights. The law prohibits employers from discriminating between male and female employees in various aspects, such as the type of work, wage or salary, employment, promotion, professional qualifications, and apparel.

Trade unions play a crucial role in promoting and defending the rights and interests of employees in an industry or establishment. The Constitution guarantees the right to form associations or unions, subject to reasonable restrictions in the interest of sovereignty, integrity, public order, or morality. Employees and employers both have the right to join trade unions, and trade unions have the right to affiliate with international organizations.

Industrial relations legislation allows for the formation and registration of trade unions, and each province in Pakistan has its own Industrial Relations Act. Employees are entitled to join a union without prior authorization, but they can be members of only one union at a time.

The process of forming a trade union involves applying for registration to the office of the Registrar of Trade Unions in the province. Certain requirements need to be met for registration, including the number of members, eligibility criteria, and information about the trade union’s objectives and usage of funds.

Collective agreements are negotiated by Collective Bargaining Agents (CBAs), which are elected trade unions representing employees in an establishment. The process involves a secret ballot election if there is more than one union in an establishment. A CBA engages in collective bargaining with the employer on matters related to employment, non-employment, terms of employment, and working conditions.

Strikes and lock-outs are actions taken during industrial disputes. Strikes are the cessation of work by employees acting in combination, while lock-outs are closures or suspensions initiated by employers related to industrial disputes. There are specific steps and procedures to be followed before a strike or lock-out can be declared, including negotiation, conciliation, and arbitration.

The Industrial Relations Acts also provide protection against anti-union discrimination by the management against trade union members. Unfair labor practices on the part of the employer, such as imposing conditions to restrain trade union membership, refusing to employ or continue employing someone based on trade union membership, or discriminating against trade union members, are prohibited by law.

Termination of employment in Pakistan can occur through various means, and the Labor Law provides specific guidelines for each type of termination.

• Termination by the employer:
  • Termination simpliciter: This is termination on grounds other than misconduct, after giving proper notice. The employer must provide a written termination letter explicitly stating the reasons for termination.
  • Termination for misconduct: If an employee is dismissed due to serious misconduct, the employee must be given an opportunity to respond to the charges leveled against them.
• Automatic termination: Employment contracts may be terminated automatically in certain circumstances, such as the death of an employee or the completion of the project or contract for which the employee was hired.
• Resignation by the employee: An employee may choose to resign from their employment to pursue better work opportunities or due to unsupportive work circumstances, provided there is no material breach of contract by the employer.

The Labor Law requires that all terminations of service, regardless of the reason, be documented in writing, stating the specific reasons for such an action.

In cases of termination by the employer, a permanent worker’s services cannot be terminated for any reason other than misconduct unless one month’s notice or wages in lieu thereof has been given. Severance pay may also be required to be provided to the employee upon termination.

If an employee is aggrieved by an order of termination, they have the right to bring the grievance to the attention of the employer, in writing, through the shop steward or trade union within three months of the occurrence of the cause of action.

Regarding retirement, an employee who is 60 years of age or who has 15 years of service in the same organization may be dismissed and benefit from the dismissal indemnity upon their request. Workers between the ages of 55 to 59 (men) or 50 to 54 (women) with at least 15 years of contributions may be entitled to a reduced pension.

It’s important to note that the Labor Law doesn’t specifically prescribe fair grounds for dismissal, but case law has established some acceptable and valid reasons, such as serious illness, inefficiency in job performance, and financial and economic needs of the establishment. Serious misconduct is also considered sufficient grounds for dismissal, provided the employee is given an opportunity to respond to the charges. However, not every conduct deserves the dismissal punishment, and if an employer dismisses an employee with notice for “arbitrary” reasons, the employee may claim compensation.

The final settlement of an employee upon termination of their employment contract includes several components:

• Annual Leave Remuneration: Any annual leave remuneration due to the employee but not yet drawn must be paid to the employee upon termination of the employment contract, at the wage rate prevailing on the date of termination. Statutory limitations on such wages, if applicable, begin as of the date of the termination of the contract.
• Severance Payment: If the employment contract has been terminated by the employer and there is a valid reason for termination, the employer may be required to pay a severance payment to the employee. However, if the termination is due to immoral, dishonorable, malicious conduct, or similar behavior, the employer is not obligated to pay severance.
• Job Security Provisions: For employees protected under job security provisions, the employer is liable to inform the employee of their performance or misbehavior and obtain a written defense before terminating the contract.
• Arbitrary Dismissal: An “arbitrary” dismissal may occur if the employer dismisses an employee for reasons unrelated to work or in violation of the employee’s legal rights. Such dismissals may lead to compensation claims.

Regarding dispute settlement, one or several Arbitration Boards are set up in each Governorate to have jurisdiction on disputes between employers and employees related to terminations. Special Courts for Trial of Offenses and Tribunals have also been created, which deal with specific types of cases, including labor disputes. Appeals from the Special Courts are generally submitted to the High Courts, with the exception of Labor Courts, which have separate forums of appeal.

If an employer or a Collective Bargaining Agent (CBA) believes that an industrial dispute has arisen or is likely to arise, they may communicate their views in writing to the other party. If the dispute is not settled through bilateral negotiations or conciliation, the employees retain the right to go on strike, providing notice to their employer, and the employer has the right to declare a lock-out.

Settlement of individual labor disputes involves an employee bringing a grievance to the notice of the employer in writing within one month of the cause of the grievance arising. The employer must communicate the decision in writing to the employee within 15 days. If the employee is dissatisfied with the decision or the employer fails to communicate a decision, the matter may be taken to the Labor Court within two months.

An employee has the right to resign from an indefinite-term employment contract at any time by giving the required notice or payment in lieu. In certain cases, such as employer breaches of legal or contractual obligations, an employee may resign without notice and seek compensation similar to arbitrary dismissal claims.

It’s important for both employers and employees to be aware of the specific legal requirements and procedures surrounding termination and dispute resolution to ensure compliance with the Labor Law in Pakistan.

Notice Period:

Under the Labour Law in Pakistan, either party may terminate an employment contract by giving one month’s notice prior to contract termination. If one month’s notice is not served, the employee must be paid one month’s wages in lieu of notice. It is important to note that this notice period requirement applies only to permanent workers. Temporary workers, badlis (replacement workers), and probationers are not entitled to any notice or pay in lieu thereof if their services are terminated. Similarly, they are not required to serve notice before leaving their employer.

End-of-Service Gratuity/Indemnity:

Employees who have at least one year of service (excluding any days of unpaid absence) are entitled under the Labour Law to a statutory “End-of-Service Gratuity/Indemnity” upon termination of employment. The gratuity is a benefit for services rendered in the past and is a legal obligation for establishments. It is payable to eligible employees who have worked at least 12 months in an organization. The gratuity amount is calculated based on 30 days’ wages for every completed year of service or any part thereof in excess of six months. Any employment period exceeding six months over the number of years of service is considered as one year for the purpose of gratuity calculation.

Challenging Dismissals:

If an employee believes they have been arbitrarily dismissed or dismissed without due notice or procedure, they may file a complaint with the Ministry of Labour. The Ministry will seek to broker an amicable settlement, and if unsuccessful, may authorize the employee to bring a case to the labour courts. If the court finds that an employee has been arbitrarily dismissed or dismissed without justification, it may order the employer to pay compensation to the employee.

Disciplinary Matters:

Employers have the right to impose disciplinary sanctions for employee misconduct. There are 12 types of acts and omissions that constitute misconduct under the law. The disciplinary process starts with an incident report initiated by a supervisor after observing misconduct. Management reviews the incident report and may issue a charge sheet to the accused employee. The accused employee has a reasonable time to submit a reply to the charge sheet. If necessary, an impartial inquiry may be conducted to probe further into the matter. After completion of the inquiry proceedings, the inquiry officer or board of inquiry submits a report to the employer with their findings. Based on the findings, the employer may impose one of several punishments, including fines, withholding of increments or promotions, reduction to a lower post, or dismissal.

Health and Safety:

Employers have general duties to ensure the health, safety, and welfare of their employees at work. They must provide a workplace that is without risks to employees’ health and safety. Employers are obligated to ensure adequate systems are in place to minimize risks related to fire hazards and the use, handling, storage, and transport of dangerous articles and substances. They must provide information, instruction, training, and supervision to employees to ensure their health and safety at work. Employers must also provide and maintain adequate and safe access to and from the workplace and meet any other health and safety requirements prescribed in OHS rules and regulations.

Data Protection in Pakistan is protected through various laws, including the Penal Code, Civil Code, and the Personal Data Protection Bill (the Bill’s most recent version came out recently in 2023). The Penal Code criminalizes the use or disclosure of personal data without consent, while the Civil Code allows individuals to seek compensation, damages, or an order to end the infringement of their rights related to personal data.

The Personal Data Protection Bill provides additional protections for data privacy and applies extra-territorially, meaning it covers data controllers or processors not registered in Pakistan but processing data of Pakistani individuals. The Bill defines various terms such as data controller, data processor, data subject, and sensitive personal data. It also empowers the Personal Data Protection Authority of Pakistan to devise a registration and licensing framework for data controllers and processors.

Under the Bill, data controllers must have a lawful basis for processing personal data, and sensitive personal data is subject to stricter regulations. Critical personal data must be processed within Pakistan, and the transfer of personal data outside Pakistan must meet certain requirements and follow a framework devised by the authority.

Data subjects have various rights under the Bill, including the right to access, correct, withdraw consent, prevent processing likely to cause damage or distress, and erasure of their personal data.

Data controllers and processors are required to maintain records of personal data and comply with prescribed standards to protect it from loss, misuse, or unauthorized access. They must also report data breaches to the authority within 72 hours, and the authority may prescribe the procedural aspects of notifying data breaches.

In the context of employment, employers must keep personnel files for each employee, including information on their identity, wages, leave, and disciplinary records. They are also required to keep records of occupational injuries and diseases sustained by employees.

Overall, the Personal Data Protection Bill (2023) aims to protect individuals’ privacy and ensure that personal data is processed lawfully and securely in Pakistan.

Punjab’s Labour Policy 2018: Promoting Freedom of Association and Improving Enforcement

Introduction:

Punjab’s Labour Policy 2018 focuses on promoting freedom of association, tripartism, and social dialogue, while also aiming to improve enforcement through revamping inspection mechanisms. The policy is aligned with Pakistan’s commitment to international labor standards and ensures that workers’ rights are protected and respected. By ratifying essential ILO conventions and implementing legislative measures, the government of Punjab aims to create an environment of industrial peace and harmony for workers and employers alike.

• Promoting Freedom of Association and Collective Bargaining:
• Pakistan’s ratification of ILO Conventions No. 87 and 98 emphasizes the importance of freedom of association and collective bargaining rights. In line with this commitment, Punjab has enacted the Punjab Industrial Relations Act, 2010, which regulates industrial relations and facilitates the registration of trade unions. The government actively encourages and supports the unionization process, resulting in a significant increase in registered unions during 2017-18.

To further protect workers’ rights, the exclusions under the Punjab Industrial Relations Act have been minimized, with only certain essential services and state administration personnel excluded. This allows workers in various sectors to freely associate and collectively bargain as per the Constitution of Pakistan and the Punjab Industrial Relations Act, 2010. The recent registration of home-based workers’ and domestic workers’ unions showcases the government’s commitment to organizing workers in the informal sector and ensuring their representation.

• Extending Coverage and Scope of Labour Policy:
• The policy advocates initiating dialogue with social partners to extend the coverage and scope of the Punjab Industrial Relations Act, 2010, to previously excluded categories of workers, such as agricultural workers, domestic workers, home-based workers, and those in the informal sector. By including these workers under the Act’s protection, the government aims to bring them into the fold of formal labor regulations, ensuring their rights and welfare are safeguarded.
• Strengthening Implementation and Social Dialogue:
• Effective implementation of labor laws is essential for the protection of workers’ rights. The Punjab Labour Policy 2018 emphasizes streamlining the processes for the formulation of trade unions, conciliation, election and referendum proceedings, and workers’ participation in management. By framing subsidiary rules and facilitating workers’ genuine participation in tripartite committees and labor conferences, the policy aims to foster a more inclusive and harmonious work environment.
• Improving Enforcement through Revamped Inspection:
• A robust labor inspection mechanism is crucial for ensuring the effective implementation of labor laws and protecting workers from exploitation. The policy acknowledges the significance of labor inspection and endeavors to address existing challenges. By aligning inspection procedures with ILO Convention No. 81, the government aims to enhance the efficiency of inspections through streamlined regulations and capacity development.

Punjab’s Labour Policy 2018 sets forth a comprehensive framework for promoting freedom of association, collective bargaining, and social dialogue. By aligning with international labor standards and focusing on improving enforcement mechanisms, the policy aims to protect workers’ rights, ensure decent working conditions, and foster industrial peace and harmony. Through continued commitment to these principles, Punjab can create an environment where workers’ interests are safeguarded, and employers and employees can work together for mutual growth and prosperity.

Ensuring Workers’ Safety: Punjab’s Labour Policy 2018

Introduction:

Punjab’s Labour Policy 2018 places a strong emphasis on transparency in inspections and aims to enhance the supervisory role through an online monitoring inspection system. The policy focuses on bringing more enterprises under the inspection net by improving subsidiary regulations, providing infrastructural support, and extending online inspections. Occupational health and safety (OSH) is a prime concern, and the policy acknowledges the need for a comprehensive and effective legislation to address emerging OSH issues in the dynamic 21st-century technological era. The government aims to promote a safety culture, ensure adherence to international conventions, and implement a robust OSH management system.

• Strengthening Inspection Mechanisms:
• The policy recognizes that labor inspection is crucial for safeguarding workers’ rights and ensuring compliance with labor laws. To improve inspection transparency and efficiency, the policy advocates streamlining procedures, administrative arrangements, and subsidiary regulations. Necessary infrastructural support, including proper offices, equipment, and transport, will be provided to the labor inspection machinery. The online inspection system will be extended to cover industrial and commercial establishments throughout the province, enhancing reporting and follow-up procedures.
• Extending OSH Legislation:
• The existing legislation under the Factories Act of 1934 needs updating to address the new OSH challenges arising in the 21st century. The government is formulating a separate OSH legislation to cover employers, workers, and others in all sectors of the economy, including formal and informal sectors. Workers in agriculture and construction sectors will also be protected under this legislation. The policy promotes a proactive approach to safety culture, encouraging preventive strategies over reactive and compensatory measures.
• Promoting Safety Culture:
• To foster a safety culture, the policy focuses on imparting necessary training on OSH issues to workers, employers, and field formations through the use of modern techniques. The concept of OSH will also be introduced in the curriculum of the Punjab Text Book Board to create awareness from an early age. The establishment of a database for small and medium-sized enterprises and major factories engaged in hazardous operations will further promote OSH compliance.
• Key Areas for Implementation:
• The government of Punjab will address three key areas for effective implementation of OSH measures. Firstly, it will formulate, implement, monitor, evaluate, and periodically revise provincial OSH programs in consultation with social partners and stakeholders. Secondly, an effective labor inspection and enforcement system will be established to ensure regular and effective inspections. Lastly, a streamlined injury/accident compensation and rehabilitation system will be put in place to expedite settlement and compensation processes for affected parties.

Punjab’s Labour Policy 2018 demonstrates the government’s commitment to promoting workers’ rights and ensuring their safety and well-being. By enhancing transparency in inspections and revamping the OSH legislation, the policy aims to create a safety-oriented work environment that fosters industrial growth and harmony. It is a step towards fulfilling international commitments and striving for a safer and more prosperous future for all workers in the province.

Towards Fair Living Wages and Equal Opportunities: Punjab’s Labour Policy 2018

Punjab’s Labour Policy 2018 recognizes the need for a shift from minimum wages to living fair wages, providing workers with a reasonable salary that covers essential living standards. The policy aims to address the challenges arising from rising prices, inflation, and the cost of living by adopting the concept of living wages, which is gaining popularity globally. Additionally, the policy emphasizes the importance of addressing discrimination in employment and remuneration based on gender, religion, and other factors. It seeks to promote equal remuneration for equal work, ensuring a fair and just working environment for all workers.

• Transforming Minimum Wages to Living Fair Wages:
• The traditional approach of periodic revisions of minimum wages is being challenged by workers’ demands for living wages that consider the rising cost of living. The Labour Policy of 2018 aims to address this demand by entrusting the Punjab Minimum Wages Board with the task of conducting tripartite consultations involving stakeholders, including workers, employers, and economic experts. The Board will identify a real living wage, considering factors such as inflation, food prices, and the Consumer Price Index. The goal is to establish a living wage unanimously acceptable to all parties involved.
• Addressing Discrimination in Remuneration and Employment:
• The policy is committed to promoting equal opportunities and non-discrimination in employment. It aims to discourage all forms of discrimination based on gender, religion, origin, political affiliation, caste, and creed. To achieve this, necessary provisions will be incorporated into relevant labor laws. The inspection staff will receive training on identifying and addressing discrimination in employment and remuneration. This capacity-building will enable them to conduct inspections to ensure that equal value of work is rewarded with equal pay, regardless of gender.
• Facilitating Equal Remuneration through Scheduled Banks:
• To ensure the principle of equal remuneration for equal work, the policy proposes the payment of wages through scheduled banks. This measure will not only facilitate transparency and efficiency in wage payment but also foster equal opportunities for both men and women in the workforce. By eliminating cash-based payments, the potential for discrimination in wage distribution based on gender or other factors is minimized.

Punjab’s Labour Policy 2018 reflects the government’s commitment to addressing the changing needs of workers and promoting fair and just working conditions. By embracing the concept of living fair wages and combating discrimination in remuneration and employment, the policy aims to create an inclusive and equitable working environment for all. Through tripartite consultations and expert involvement, the policy seeks to find a balanced and acceptable living wage for workers while fostering economic growth and social development in the province.

Chapter-3: Towards a Just and Equitable Labour Landscape

3.7 Gradual Elimination of Child Labour:

The Punjab Labour Policy 2018 acknowledges that child labour is a social menace that must be eradicated through a comprehensive national strategy. The government firmly believes in the principle of “Slow but gradual and steady wins the race” and is committed to creating a society free of child labour. While the passage of new child labour laws and the enrolment of child workers in schools show a strong commitment, the policy recognizes that this is just the beginning of a long journey.

The Vicious Circle of Child Labour and Poverty:

Child labour perpetuates poverty in a vicious cycle. Families living in poverty cannot afford to send their children to school, leading children to work at an early age. As a result, these children grow up without proper education and skills, remaining trapped in low-paying and often hazardous jobs. The cycle continues as they become parents at a young age, unable to provide a better life for their children. Breaking this cycle requires comprehensive and sustained efforts.

Mechanisms for Eliminating Child Labour:

To achieve the goal of gradual elimination of child labour, the Punjab Labour Policy outlines a comprehensive mechanism:

• Strengthening Tripartite Consultation: The Provincial Tripartite Consultation Committee will play a pivotal role in addressing child labour issues, with eradication of child labour as the top priority.
• Vigilance and Coordination Committees: District Vigilance Committees and District Coordination Committees will be extended to oversee cases related to the worst forms of child labour. Meetings of these committees will be held monthly under the supervision of respective Deputy Commissioners.
• Effective Implementation: Inspectors will be notified under the newly passed child labour laws to ensure effective implementation.
• Transparent Reporting: A fully computerized online reporting mechanism will be established to efficiently and transparently receive child labour reports.
• Rehabilitation and Education: Children rescued from child labour will be rehabilitated through the Child Protection Bureau. Out-of-school children involved in child labour will be enrolled in schools, and monetary benefits will be provided through Khidmat Cards in collaboration with the School Education Department.
• Survey and Compliance: A survey of child labour will be conducted to assess its extent, and international conventions on child labour will be strictly followed.
• Discouraging Adolescent Involvement: Adolescents’ involvement in hazardous occupations, especially in more than 38 identified hazardous occupations, will be discouraged.
• Training and Prosecution: Field formations will undergo training to ensure effective implementation of child labour laws, and persistent violators will be prosecuted for a deterrent effect.

3.8 Abolishing Bonded Labour:

The Punjab Labour Policy is committed to abolishing bonded labour, and efforts are already underway through effective enforcement of the Bonded Labour System (Abolition) Act, 1992. District Vigilance Committees are actively working to address bonded labour cases. The policy suggests various measures to address bonded labour, including effective enforcement, framing subsidiary rules, improving reporting, capacity development of inspectors, incentivizing compliant brick kiln owners, and establishing a Provincial Bonded Labour Welfare and rehabilitation Fund.

The Punjab Labour Policy 2018 is a comprehensive roadmap towards a just and equitable labour landscape. By gradually eliminating child labour and abolishing bonded labour, the policy aims to create a society that respects workers’ rights and provides a safe and fair working environment for all. The policy’s commitment to living fair wages, equal opportunities, and occupational health and safety further demonstrates its dedication to promoting a progressive and prosperous labour ecosystem in Punjab. With continued dedication and collaborative efforts, the vision of a thriving labour force will soon become a reality in the province.

Chapter-3: Strengthening Employee Social Security System and Focus on Vulnerable Workers

3.9 Strengthening Employees Social Security System:

The Punjab Labour Policy 2018 recognizes the importance of social security for employees and aims to strengthen the Punjab Employees Social Security Institution (PESSI) to provide benefits to workers and their dependents in times of sickness, maternity, employment injury, or death. To achieve this, the following measures will be taken:

3.9.1 Development of “One System”:

A centralized database of workers will be created through an integrated IT system connecting all bodies within the Labour & Human Resource Department. All registered workers will be issued smart cards linked with NADRA, allowing for automation of PESSI’s registration, contribution, and benefits. This will streamline service delivery and expand coverage to the informal sector. The system will also integrate with other government departments, such as FBR and PRA, ensuring a seamless flow of information and data verification.

3.9.2 Expansion of Coverage:

Currently, PESSI coverage is only 3.2% of the total workforce, and there is no coverage in the informal sector. To address this, PESSI will establish Directorates and Sub-Directorates in all districts of Punjab, covering both formal and informal workers. The informal sector will include domestic workers and brick kiln workers. Additionally, a scheme will be introduced to provide health and cash insurance coverage to foreign workers residing in Pakistan.

3.9.3 Health Sector Reforms:

Health facilities will be expanded to ensure at least one health facility in each district of Punjab, providing health coverage to all workers in the province.

3.9.4 Legislative Strengthening:

Rules will be introduced to reduce the contribution rate of women, transgender, and differently-abled workers. Additionally, rules will be drafted to ensure social security contributions are remitted by all government contractors and licensees before clearing their bills.

3.9.5 Capacity Building:

PESSI staff will receive capacity-building training through the Industrial Relations Institute (IRI) and the Centre for the Improvement of Working Conditions & Environment (SAA-CIWCE). An MoU will be signed between these institutions to achieve the desired objectives.

3.9.6 Workers’ Health Insurance Scheme for Retired Workers:

To address the demand for health facilities for retired workers, PESSI will introduce the “Workers’ Health Insurance Card Scheme for Retired Workers.” This scheme will provide health facilities to secured workers even after their retirement.

3.10 Special Focus on Vulnerable Groups of Workers:

3.10.1 Domestic Workers:

The Domestic Workers’ Policy, approved by the government, is in the final stages of draft legislation after thorough tri-partite consultation. An inspections regime will be implemented to ensure effective implementation while respecting the privacy of households. Visible improvements in this regard are expected within a few months.

The Punjab Labour Policy 2018 lays a strong foundation for strengthening employee social security and ensuring the well-being of vulnerable groups of workers. By streamlining PESSI operations, expanding coverage, and introducing legislative reforms, the policy demonstrates the government’s commitment to workers’ welfare and protection. With a focus on social security, health sector reforms, and targeted measures for vulnerable workers like domestic workers, the policy strives to create a just and equitable labour landscape in the province.

Chapter-3: Focus on Vulnerable Workers, Research and Development, and Labour Market Information & Analysis System

3.10.2 Home-Based Workers:

The Punjab Labour Policy 2018 recognizes the challenges faced by Home-Based Workers and is committed to providing them with social protection. The policy has prepared a “Home-Based Workers’ Policy” that has been approved by the government. To further support these workers, the Department will proceed with drafting legislation on the subject and submit it to the Provincial Assembly of Punjab. Inspections in this sector will be conducted with sensitivity to the sanctity of households.

3.10.3 Agricultural Workers:

The policy acknowledges the need to extend labour laws’ coverage to agricultural workers and recommends the expansion of labour inspections in this sector over time.

3.10.4 Contract Workers:

Workers engaged through contractors will be covered under labour laws, and inspections and administrative measures will be undertaken to ensure they receive the benefits and rights they are entitled to.

3.10.5 Construction Workers:

The policy recommends legal coverage for workers engaged in the construction industry, and rigorous inspections will be conducted to protect their rights and benefits.

3.10.6 Gender at Work:

The government emphasizes the empowerment of women workers and aims to facilitate their participation in the labour force. Measures will be taken to protect women’s rights at the workplace, including the implementation of women quotas in tripartite labour committees, gender-sensitive inspections, and provisions for maternity benefits.

3.11 Research and Development:

The Punjab Labour Policy 2018 emphasizes the importance of research on various labour issues, including child labour, forced labour, gender aspects, and various categories of workers. The research aims to provide insights into the labour market, inform policy-making, and assess the impact of government policies and actions. Specific studies on labour force determinants will aid in employment projection and manpower planning. Additionally, the policy calls for a concise “Child Labour Policy” to be periodically appraised by the competent authority.

3.12 Labour Market Information & Analysis System (LMIS):

The efficient functioning of the LMIS is crucial for understanding labour market trends and informing employment and labour policies. The LMIS will facilitate in-depth analysis of labour market trends, monitor and report on employment and labour policies, and provide coordination for labour inspection across Punjab. The LMIS will disseminate information and analysis for policy-makers and labour market stakeholders, ensuring well-informed decision-making and effective policy formulation and implementation.

The Punjab Labour Policy 2018 demonstrates a strong commitment to addressing the needs of vulnerable workers and promoting gender equality in the workforce. By focusing on home-based workers, agricultural workers, contract workers, construction workers, and empowering women workers, the policy aims to create a more inclusive and just labour landscape. Through research and development initiatives and the establishment of a robust Labour Market Information & Analysis System, the policy seeks to inform evidence-based policy-making and strengthen labour market governance in Punjab.

Chapter-3: Labour Welfare and Skills Development for Adolescents

Labour Welfare:

The Punjab Labour Policy 2018 emphasizes the improvement of the labour welfare system to expedite the disbursement of welfare grants to eligible workers. Currently, workers submit their welfare grant claims to the respective Labour Offices, which are then verified by the Labour Officer and scrutinized by a Tripartite District Scrutiny Committee. The District Scrutiny Committees forward their recommendations to the Punjab Workers Welfare Board for eligible cases. After approval by the Chairman Board, the cases are sent to the Workers Welfare Fund in Islamabad for the release of funds.

To streamline this process, the policy suggests establishing an online verification system for workers’ data from Factories/District Labour Offices, as well as online verification of EOBI/PESSI related records to minimize the number of scrutiny tiers. This will lead to faster processing and approval of welfare grant claims. Efforts will also be made to ensure early release of funds by the Funding Agency, resulting in prompt disbursement of welfare grants to eligible workers.

Additionally, the policy aims to establish new welfare schools for workers’ children and increase the number of housing schemes or labour colonies to accommodate the growing population of registered workers.

3.14 Skills Development for Adolescents:

The Punjab Labour Policy recognizes the importance of skill development for adolescents (15 to 18 years) who are allowed to engage in light work but strictly prohibited from hazardous occupations under the legislation titled “The Punjab Restriction on Employment of Children Act, 2016.”

To equip adolescents with necessary skills, technical training programs will be conducted through institutions like TEVTA (Technical Education and Vocational Training Authority) and PVTC (Punjab Vocational Training Council). By providing adolescents with relevant skills, the policy aims to enhance their employability and create better opportunities for their future.

Conclusion:

The Punjab Labour Policy 2018 focuses on improving labour welfare and promoting skills development for adolescents. By streamlining the process of welfare grant disbursement, establishing online verification systems, and expanding welfare schools and housing schemes, the policy aims to enhance the welfare of workers and their families. Furthermore, by providing technical training to adolescents, the policy seeks to equip them with valuable skills for a brighter future. Through these initiatives, the policy strives to create a more inclusive and supportive environment for workers and the younger generation in Punjab.

Bridging the Gap: Providing Equal Protection for White Collar Employees in Pakistan’s Private Sector

Pakistan’s private sector is a significant contributor to the nation’s economy, producing goods and services and driving investments and economic activities. However, despite its critical role, the private sector’s job market is marred by disparities in protection for different categories of employees. The concept of Master & Servant, which governs the employment relationship for white-collar employees, is outdated and lacks transparency and equal protection. This article sheds light on the need to bridge this gap and provide equal protection for white-collar employees, ultimately promoting a fair and competitive job market.

The Concept of Master & Servant:

Since the passage of the Eighteenth Constitutional Amendment, labour matters fall under the jurisdiction of each province in Pakistan. Both the Federal Government and Provincial Governments have issued their respective industrial relations legislations to regulate the labour market within their domains. However, the legislations differentiate between workers and white-collar employees, with the former being entitled to numerous protections, while the latter remains outside the ambit of these labour laws.

Who Qualifies as a Worker:

The legislation provides an exhaustive definition of who qualifies as a worker. Generally, a person is considered a worker if they are an employee of an establishment and not an employer. This categorization excludes the junior and mid to senior management, making workers the junior-most category of employees in any organization.

Advantages of Being Categorized as a Worker:

Being classified as a worker comes with certain incentives, including protection from unfair dismissal, the right to form labour unions, the ability to appoint collective bargaining agents, retrenchment protection, gratuity payments, and access to specialized Labour Courts for resolving employment grievances. Workers also enjoy protection from the outdated legal principle of Master & Servant, which gives them a higher level of security in their employment relationship.

White Collar Employees under Master & Servant:

White-collar employees, on the other hand, are governed by the Master & Servant principle. This concept is rooted in historical notions of Master & Slave and is not suitable for the modern job market. It lacks transparency and equal protection for both employers and employees. White-collar employees cannot form labour unions or collective bargaining units and are not entitled to the same level of protection under the law as workers.

Limitations of Master & Servant:

The Master & Servant principle continues to apply in Pakistan without significant statutory or judicial intervention. This leaves white-collar employees at the mercy of their employers, who hold the power to terminate their employment without adequate redressal mechanisms. Unfair termination or dismissal does not extend to white-collar employees, and seeking legal recourse in cases of termination can be time-consuming and financially burdensome.

The Need for Equal Protection:

Pakistan’s private sector is the primary producer of goods and services and a major driver of the economy. To promote a healthy and competitive job market, there is a pressing need to provide equal protection to white-collar employees. Specialized forums like employment tribunals or Labour Courts should be established to address the grievances of white-collar employees. Additional statutory safeguards should be introduced to protect their employment rights beyond the scope of individual employment contracts.

The private sector in Pakistan plays a crucial role in the nation’s economic growth and development. To ensure a thriving workforce and competitive growth, it is essential to provide equal protection to all categories of employees, including white-collar employees. Outdated concepts like Master & Servant need to be replaced with modern and transparent regulations that uphold the principles of fairness, equality, and mutual respect between employers and employees. A well-regulated job market will foster human resource development, boost morale, and drive economic prosperity within all economic sectors.

The section below is the older version of this page from 2016

There are so many labour laws in existence in Pakistan it would be remiss of us to try and put them all into one article. This is merely an overview touching on the main laws that can have a major impact on the legality of your business and how you run it in terms of your employees. We have a team here at Josh and Mak International who specialize in labor laws so please contact in the first instance if you are unsure about any of them and are worried about breaking the law.

The main laws you need to concentrate on when you are an employer are;

• Paid vacation and annual leave
• Pay on public holidays
• Compulsory weekly rest days
• Overtime compensation
• Night shift compensation
• Compulsory holidays
• Employment security
• Fair treatment
• Equal pay
• Non-discrimination in the workplace
• Equal treatment of women at work
• Health and Safety
• Employer Care
• Free Protection
• Training
• Labor Inspection System
• Regulations on Health and Safety
• Home-based Work
• Fixed term contracts
• Probation Period
• Maternity rights including leave and payment
• Family responsibilities
• Paternity leave
• Parental leave
• Flexible work option for parents / work-life balance
• Regulations on family responsibilities
• Sick leave and sick pay
• Medical care
• Social Security
• Pension Rights

These are all covered under the Factories Act, 1934, the Payment of Wages Act, 1936, Workmen’s Compensation Act, 1923, Mines Act, 1923, Dock Labourers Act, 1934, The West Pakistan Shops and Establishments Ordinance, 1969, The Road Transport Workers Ordinance, 1961, Shops and Establishments Ordinance, 1969, Merchant Shipping Ordinance, 2001 and the Workmen’s Compensation Act, 1923.

If you aren’t up to speed on the labor laws of Pakistan they can be a veritable minefield. This is where Josh and Mak come into their own to help you will all aspects of these laws.You don’t want to be illegally employing people any more than you want to be legally employed. Contact us today for confidential and impartial advise on any of the numerous labor laws that currently exist in Pakistan.

Forced and bonded labor

Forced labor is any type of work or service in which someone engages involuntarily and under a threat or coercion. Bonded labor is a specific kind forced labor existing mainly in Asian and other agricultural societies. This type of labor mainly crops up in cases where monetary/financial deals occur such as loans, which, if the debtor is unable to pay, he has to serve the creditor for some specified or unspecified term.

How do we know whether bonded/forced labor is taking place or not?

Here are the indicators to determine whether work is forced/bonded labor or not.

• Whether wages are equal to minimum wage or wages that are normally paid to that class of workers. If anyone is being paid lower wages (or wages lower than the amount negotiated or finalized earlier), he is in the conditions of bonded labor. Moreover, if an employer makes undue deductions from wages, he is also creating bonded labor conditions.

• Whether wages are directly paid to the worker or some other person is taking his/her wages

• Whether daily working hours are in accordance with the provisions of the law, 8 hours per day, 48 hours per week, and whether he has the right to choose to work overtime work. If the employer is requiring him/her to work overtime more than the law states they are treating this worker as a bonded laborer.

• Whether this person can leave his/her work (after giving notice) and move to some other place to start a new job.

• Whether this person can sell his/his family’s produce in the market

• Whether this person is working under “peshgi” or “bonded loan” as “peshgi” itself has no problem unless it creates bondage. Workers usually take advances from their employers but not all advances lead to bonded labor

• Whether the worker keeps his identity documents with himself or his employer keeps these in his own custody. These can include passports, ID cards, educational degrees, domiciles etc.

If you are working under the bonded labor scheme, or know of an employer who is exploiting his worker in this manner please contact us for confidential advice. This is a form of slavery that is strictly forbidden in Pakistan under the Bonded Labor System (Abolition) Act, 1992 and the Bonded Labor System (Abolition) Rules, 1995.

Domestic Work

Domestic work is one of the oldest occupations for women across the globe. The ILO Convention (C189) defines domestic work as “work performed in or for a household or households”. In the new convention adopted by the ILO in June 2011 (C189) domestic work is different from care work that is performed by household members as part of their responsibilities to their families and without the creation of a relationship of employment. The various duties which fall under the banner of domestic work include;

1. Cleaning

2. Washing dishes or clothes

3. Ironing

4. Cooking

5. Security guards

6. Gardening

7. Driving

8. Child Care/Babysitting

9. Elder Care

10. Taking care of ill persons or persons with disabilities

11. Taking care of animals/pets etc.

12. Assistance in other household daily chores

There are hard and fast rules regarding the hiring of domestic employees which include all of the aforementioned labor laws. Many domestic workers aren’t aware of their rights and we at Josh and Mak are waiting for your call regarding domestic workers whether you are an employer or an employee.

Child labor in Pakistan

Both the labor laws and the constitution prohibit the employment of children under the age of 14. However, UNICEF and ILO and UNICEF differentiate between child labour and child working. According to both organizations, all work done by children cannot be classified as child labor. There is a definite need to differentiate between them. If work is not affecting the health, personal development and education of a child this work can’t be classed as negative doesn’t therefore fall into the category of child labor. This includes helping out in the family business or working after school or during the school holidays or after school hours. Child work is looked on positively as helping children to develop and gives them the chance to learn the skills that will be necessary for them to become productive and useful members of society.

On the other hand, according to ILO, Child Labor is work that could deprive children of their childhood, strip them of their dignity and be harmful to their mental, moral and physical development as well as interfering with their education. The following laws deal with all child working and if you are unsure of any aspect of either of these contact us today.

The Employment of Children Act 1991

The Employment of Children Rules 1995
Mines Act, 1923
The Children (Pledging of Labor) Act, 1933
The Factories Act, 1934

The Employment Of Children Act 1991 defines a “child” as any person younger than 14 and those aged between 14-18 are adolescents. As mentioned above, the Constitution of Pakistan also regards the minimum age as 14 years. However, the 18th amendment has actually raised the minimum age up to 16 without amending the labor laws, so there is still contradiction. Article 25(A) of the Constitution says that the state now has to provide compulsory education to all children between the ages of five and sixteen years, which means that, a child can’t be actually be allowed to work before 16 years of age.

Home based workers

As the name implies, these are workers who carry out activities they are paid for from within their own home and not at a place of work. This is one of the oldest professions in Asia and the inception of the Internet has opened the doors for many more to join the home workforce. It particularly benefits women who can earn an income without having to worry about childcare. They either work for themselves on a self employed basis or carry out for an employer. There are different laws relating to each situation and we can advise you on both aspects to ensure both fair treatment and remuneration. The following aspects should also be considered when working for an employer;

• Statutory social security protection

• Occupational safety and health

• Access to training

• Minimum age and maternity protection

There are various forms of home-based activities including the following:

The following table has been adapted to show how the ILO differentiates among the 3 main types of home workers.

Penalties Under The Minimum Wage Act

The table below illustrates the punishments that will be handed out to those who break the rules regarding the payment of the minimum designated wage to their employees;

As well as these fines, the guilty employer will have to pay the difference between what they worker has been getting paid and what they should have been getting. The table below illustrates other penalties employers can face under the Payment of Wages Act;

This is only the tip of the iceberg when it comes to the complex labor laws in Pakistan. The expert team at Josh and Mak International are here to guide you in the right direction, whether you are an employer or an employee. Call us today for the best confidential advice available from any law firm in the country.