Labour Rights in the Constitution

The Constitution of Pakistan contains a range of provisions with regards to labour rights
found in Part II: Fundamental Rights and Principles of Policy.

 Article 11 of the Constitution prohibits all forms of slavery, forced labour and child
labour;

 Article 17 provides for a fundamental right to exercise the freedom of association

and the right to form unions;

 Article 18 proscribes the right of its citizens to enter upon any lawful profession or
occupation and to conduct any lawful trade or business;

 Article 25 lays down the right to equality before the law and prohibition of
discrimination on the grounds of sex alone;

 Article 37(e) makes provision for securing just and humane conditions of work,
ensuring that children and women are not employed in vocations unsuited to their
age or sex, and for maternity benefits for women in employment.

Standing Orders Legislation

The Industrial and Commercial Employment (Standing Order) Ordinance 1968
(applicable in ICT and Balochistan);

The Industrial and Commercial Employment (Standing Order) Ordinance 1968 (adopted
in 2012, applicable in Punjab);

The Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Order)

Act, 2013;

The Sindh Terms of Employment (Standing Orders) Act, 2015

Contract of Employment

While Article 18 of the Constitution affords every citizen with the right to enter upon any
lawful profession or occupation, and to conduct any lawful trade or business, the
Industrial and Commercial Employment (Standing Orders) Ordinance was enacted in
1968 to address the relationship between employer and employee and the contract of
employment. The Ordinance applies to all industrial and commercial establishments
throughout the country employing 20 or more workers and provides for security of
employment. In the case of workers in other establishments, domestic servants, farm
workers or casual labour engaged by contractors, their labour contracts are generally
unwritten and can be enforced through the courts on the basis of oral evidence or past
practice.

Industrial Relations Legislation

1. The Industrial Relations Act 2012

2. The Punjab Industrial Relations Act 2010

3. The Khyber Pakhtunkhwa Industrial Relations Act 2010

4. The Balochistan Industrial Relations Act 2010

5. The Sindh Industrial Relations Act 2013

Shops and Establishments Legislation

The Shops and Establishments Ordinance 1969 (applicable in ICT and Balochistan);

The Punjab Shops and Establishments Ordinance 1969 (amended in 2014;

The Khyber Pakhtunkhwa Shops and Establishments Act 2015;

The Sindh Shops and Commercial Establishment Act 2015

To which establishments is Standing Orders Ordinance, 1968 applicable?
Standing Orders Ordinance is applicable to all industrial and commercial establishments
employing 20 or more workers now or on any day during the preceding 12 months. This
ordinance may be extended to other classes of establishments (employing even less than
20 workers) by provincial governments through notification. An exemption to the above
rule is granted in the case of smaller industrial establishments (employing between 20-49
workers) in the following four provisions.

How is worker/workman defined under the above ordinance?

Persons doing skilled or unskilled, manual or clerical work are covered under the
ordinance. However, those engaged in supervisory and managerial capacity are usually
excluded from its scope. To decide whether a worker is covered under the ordinance, it
is the nature of work (i.e., manual or clerical) and not designation or pay that is essential
in determining the status of an employee. It is the nature of work and not the job category
that makes a worker covered under the ordinance. For example, a teacher is not
considered a workman under the law as a teacher’s job requires more of mental power
and capacity (quite opposite to manual or clerical worker). Some limited manual (writing
on blackboard, making lecture notes) and clerical (checking students’ notebooks) work is
incidental to a teacher’s job however it never forms a substantial part of his job, so he/she
is not a workman under the act. Some employers also (in order to keep workers from
unionizing and defeat the spirit of law) award many of the employees a supervisory
status, however if a supervisor’s job is of manual or clerical nature (and without any
hire/fire authority), he is still a workman under the act.
Who can terminate an employment contract?

In accordance with Standing Order 12 of the ICEO, 1968, either party may terminate an
employment contract after giving one-month notice prior to contract termination. If one-
month notice is not served, a worker must be paid one-month wages in lieu of notice. It
is important to remember that only permanent workers are required to give (and be
served notice) before terminating employment contract. Temporary workers, badlis
(alternate employee working in place of an absent permanent worker or probationer) and
probationers are not entitled to any notice (or in pay in lieu thereof) if their services are
to be terminated. Similarly, they are not required to serve a notice before leaving
employer.

Similar provisions are found in the Khyber Pakhtunkhwa Industrial and Commercial
Employment (Standing Order) Act 2013 (Standing Order 17) and the the Sindh Terms of
Employment (Standing Orders) Act 2015 (Standing Order 16).

What are the different types of contract termination?

Termination of an employment contract may be either termination simpliciter, which is
termination on grounds other than misconduct after a notice (S.O. 12) or termination on
account of misconduct (S.O. 15). Notice of termination, for termination simpliciter, is
mandatory for permanent employees. A notice of one month must be served before
severing the employment relationship or payment of one month’s wages in lieu of notice
may be provided (Section 12.1).

Termination can also be categorized in the following three categories. The first type is
“automatic termination” where an employment contract is terminated automatically in
circumstances such as death of an employee or completion of the project/end of contract
for which a worker was hired. Second is termination of employment by the employee
through resignation. An employee may resign from employment to avail some better
work opportunity or when the work circumstances are not supportive and there is
material breach of contract on the part of employer. Third is the termination initiated by
an employer, which may be based on fair or unfair grounds.
On what grounds can an employer terminate a contract of employment?
Standing Orders Ordinance requires a written employment termination letter stating
explicitly reasons for termination. This is applicable to both termination simpliciter
(under S.O. 12) and dismissal on the ground of misconduct (under S.O. 15). Although
above law requires employer to state reasons for termination, it does not prescribe any
reasons for which employment relationship may be rightfully terminated (fair grounds
for dismissal). Case law has established some acceptable and valid reasons for
employment termination (other than misconduct), which include “serious illness,
inefficiency to perform the job, financial and economic needs of establishment”.

Serious misconduct, provided that the employee is given an opportunity to respond to

the charges leveled against him, is sufficient enough reason for dismissal. However, not
every conduct deserves the dismissal punishment. Standing Order 15 provides a range
of punishments (fines) available to an employer depending on severity of omissions.
Instances of misconduct include “habitual breach of law, absence without permission,
willful disobedience, damage to employer’s property, theft, fraud, illegal strike, go-slow,
etc.

Is severance pay provided under the labor laws in Pakistan?

In accordance with the provisions of Standing Orders Ordinance, a worker whose
employment has been terminated for any reason other than misconduct is entitled to
a “severance pay or gratuity” which is equivalent to 30 days’ wages for every completed
year of service or any part thereof in excess of 6 months (e.g., five years and 8 months is
counted as 6 years). An employer may substitute a provident fund (type of pension) for
gratuity.

Working Hour
Know more about labour laws of working hours and overtime pay in Pakistan. According
to the law, your normal working hours per day are 8-9 hours and these should not be
more than 48 hours per week. By including the lunch and prayer time in hours of work,
working hours should not be greater than 9 hours a day.

Over Time
2 hours/day (on some days, it may extend to three hours)

The maximum weekly overtime hours are 12 hours. Keeping that weekly limit, workers
may work 2-3 hours overtime while considering the above spread over limits. The total
yearly overtime work hours should also not exceed 624 hours. Moreover, you should also
be aware that lunch breaks and rest intervals are unpaid time, so you will not be receiving
any remuneration for this. You also need to know that if you are a young person (your
age is greater than 14 but less than 17 years), you can be required to work 1.5 hours a day
overtime but your total overtime hours in a year can’t exceed 468 hours. If you are a
woman, you can work only up to 10:00 pm and this is only in the condition if the
employer arranges transport for pick up and drop facility. Women workers are not
allowed to work more than 9 hours in any day (this included lunch and rest).

What is the overtime pay and how I become eligible for it?
Every employee in a factory, except those employed solely in a clerical capacity in any room
or place where no manufacturing process is being carried on (applicable in Balochistan,
KPK, Punjab and ICT) or executive/managerial capacity (applicable in all provinces) is
eligible for the overtime pay. If you work for more than 8 hours in a day or more than 48
hours in a week (while working in a non-seasonal factory), you are eligible for this
extra/overtime pay. If you are working in a seasonal factory, you can't be eligible for
overtime rate of pay unless you work for more than 50 hours in a week. The rate of
overtime pay is double the ordinary rate of pay. You are under obligation to work
overtime whenever (so, it is not voluntary) the employer requires you to do so. However,
in case you can't perform overtime work you are supposed to offer sufficient
causes/reasons regarding your inability to do so.

The same rules are applicable if you are employed under Mines Act or Newspaper
Employees Act or Road Transport Workers Ordinance. However, if you are employed
under Railways Act, and in case of exceptional pressure of work you will be paid
overtime not lower than one and a quarter time (1.25) your ordinary rate of pay.

Your monthly wage: PKR 20,000

Normal working hours: 8 hours/ day (48 hours a week)

Working days in a month: 26 days (one weekly holiday)

Total Overtime hours that you worked: 30 hours

Here is the formula:

Does the law provide for rest intervals?
Yes, your employer has to give you rest interval of an hour after every six hours of work
or you can’t be compelled to work more than five hours before rest interval of at least half
an hour. If your employer wants you to work more than eight and a half hours, you must
be given at least two intervals each of half an hour.

Termination of the Contract

The services of a permanent worker cannot be terminated for any reason other than
misconduct unless one month’s notice or wages in lieu thereof has been furnished by the
employer or by the worker if he or she so chooses to leave his or her service. One month’s
wages are calculated on the basis of the average wage earned during the last three months
of service. Other categories of workers are not entitled to notice or pay in lieu of notice.

All terminations of service in any form must be documented in writing stating the reasons
for such an act. If a worker is aggrieved by an order of termination he or she may proceed
under Section 46 of the Industrial Relations Ordinance 2002, aimed at regulating the
labour-management relations in the country, and bring his or her grievance to the
attention of his or her employer, in writing, either him or herself, through the shop
steward or through his or her trade union within three months of the occurrence of the
cause of action. Forms of termination have been described as removed, retrenched,
discharged or dismissed from service. To safeguard against any colorful exercise of
power, victimization or unfair labour practices, the Labour Courts have been given
powers to examine and intervene to find out whether there has been a violation of the
principles of natural justice and whether any action by the employer was bonafide or
unjust.

Working hours
Under the Factories Act, 1934 no adult employee, defined as a worker who has completed
his or her 18th year of age, can be required or permitted to work in any establishment in
excess of nine hours a day and 48 hours a week. Similarly, no young person, under the
age of 18, can be required or permitted to work in excess of seven hours a day and 42
hours a week. The Factories Act, which governs the conditions of work of industrial
labour, applies to factories, employing ten or more workers. The Provincial Governments
are further empowered to extend the provisions of the Act, to even five workers.

Where the factory is a seasonal one, an adult worker shall work no more than fifty hours
in any week and no more than ten hours in any day. A seasonal factory, per section 4 of
the Factories Act is that which is exclusively engaged in one or more of the following
manufacturing processes, namely, cotton ginning, cotton or cotton jute pressing, the
manufacture of coffee, indigo, rubber, sugar or tea. However, if such adult worker in a
factory is engaged in work, which for technical reasons must be continuous throughout
the day, the adult worker may work no more than fifty-six hours in any week.

Section 8 of the West Pakistan Shops and Establishments Ordinance, 1969 likewise,
restricts weekly work hours at 48 hours. The Shops and Establishments Ordinance
regulates persons employed in shops and commercial establishments, who are neither
covered by the Factories Act nor by the Mines Act. The Ordinance is exclusive in the
whole of Pakistan except for the Federally Administered Tribal Areas. Section 22-B of the
Mines Act, 1923 also fixes weekly hours of work for workers at 48 hours or 8 hours each
day, with the limitation of spread-over 12 hours and interval for rest for one hour every
six hours. Section 22-C further limits the spread-over to 8 hours for work done below
ground level.

In factories, the periods and hours of work for all classes of workers in each shift must be
notified and posted in a prominent place in the principal language in the industrial or
commercial establishment. The law further provides that no worker shall be required to
work continuously for more than six hours, unless he or she has had an interval for rest
or meals of at least one hour.

During Ramadan (fasting month), special reduced working hours are observed in
manufacturing, commercial and service organizations.

Paid Leave
As provided in the Factories Act, 1934, every worker who has completed a period of
twelve months continuous service in a factory shall be allowed, during the subsequent
period of twelve months, holidays for a period of fourteen consecutive days. If a worker
fails in any one such period of twelve months to take the whole of the holidays allowed
to him or her, any holidays not taken by him or her shall be added to the holidays allotted
to him or her in the succeeding period of twelve months.

A worker shall be deemed to have completed a period of twelve months continuous

service in a factory notwithstanding any interruption in service during those twelve
months brought about by sickness, accident or authorized leave not exceeding ninety
days in the aggregate for all three, or by a lock-out, or by a strike which is not an illegal
strike, or by intermittent periods of involuntary unemployment not exceeding thirty days
in the aggregate; and authorized leave shall be deemed not to include any weekly holiday
allowed under section 35 which occurs at beginning or end of an interruption brought
about by the leave.
Maternity Leave and Maternity Protection.
While article 37 of the Constitution makes reference to maternity benefits for women in
employment, there are two central enactments, one federal and the other provincial
providing maternity benefits to women employed in certain occupations. The Maternity
Benefit Ordinance, 1958 stipulates that upon the completion of four months employment
or qualifying period, a worker may have up to six weeks prenatal and postnatal leave
during which she is paid a salary drawn on the basis of her last pay. The Ordinance is
applicable to all industrial and commercial establishments employing women excluding
the tribal areas. It also places restrictions on the dismissal of the woman during her
maternity leave. Similarly, the Mines Maternity Benefit Act, 1941 is applicable to women
employed in the mines in Pakistan.

What kind of labor laws exist in Pakistan?

There are three categories of Labor Laws prevalent in Pakistan, which are as follows:

a) Laws that regulate the relations between an employer and an employee. These are
governed by the Industrial Relations Ordinance, 2003.
b) Laws that require contributions to be paid by the employers; they are:
• Employees Old Age Benefits Act,1976

• Provincial Employees Social Security Ordinance,1965

• Workers Welfare Funds Ordinance, 1971

• West Pakistan Maternity Benefits Ordinance, 1972

• Workers Children (Education) Ordinance ,1972

• Companies Profit (Workers Participation) Act, 1972

• Workers Compensation Act, 1923

c) Labor Laws that fix standards for wages:

• The payment of wages act, 1936

• The minimum wages ordinance, 1961

• Pakistan minimum wages for unskilled workers Ordinance, 1969

d) Labor Laws setting standards for workplace:
• The Shops and Establishment Ordinance, 1965

• West Pakistan Industrials and Commercial Employment (Standing Order)

Ordinance,1968

• The Factories Act,1934

• The Employment (Record of Services) Act, 1951

• The Employment of Children Act,1991

• The Apprenticeship Ordnance, 1962

• What is the procedure for registration under labor laws?

The procedure for registration under various labor laws is different. In case of federal
government laws such as EOBI the federal labor department while in case of provincial
government laws, the provincial labor departments regulate the procedure for
registration of under the labor laws.

Pakistan joined the ILO in 1947. Until July 2004 it had ratified 34 ILO Conventions , of
which 33 were in force for the country.

Imp links for statutes

https://www.ilr.org.pk/labour-laws/#1514534839784-92a25ad9-a6b7

further reading

https://www.thenews.com.pk/print/134190-Terms-of-employment

https://www.linkedin.com/pulse/gratuity-law-pakistan-muhammad-faisal/