Labour Laws in Pakistan
Labour laws in Pakistan have evolved significantly since independence in 1947, shaped by the country's
socio-political changes. These laws are founded on the Constitution of Pakistan, which upholds Islamic
principles of social justice. Initially, Pakistan inherited key legislation from British India, such as the Trade
Union Act of 1926 and the Industrial Dispute Act of 1926, essential for early labour rights, including trade
union formation and collective bargaining. Today, the Constitution guarantees equality before the law,
prohibits all forms of forced and child labour, and secures the freedom to form unions and engage in
collective bargaining. These provisions underpin all subsequent labour laws and policies designed to protect
workers in Pakistan.
This streamlined version focuses directly on the evolution of labour laws in Pakistan, their constitutional
basis, and their impact on worker protections today.
Constitutional Provisions and Labor Rights
The Constitution of Pakistan establishes robust protections for labor rights, integral to the country’s legal and
ethical framework. These constitutional provisions are foundational in shaping labor practices and legislation
across Pakistan, ensuring that labor rights are upheld in alignment with fundamental principles of social
justice inspired by Islamic teachings.
Key labour rights included in the Constitution are:
Prohibition of Forced Labor and Child Labor: The Constitution explicitly forbids all forms of
slavery, forced labor, and child labor, ensuring that employment is both fair and voluntary.
Freedom of Association and Union Rights: Workers are guaranteed the right to form
associations and trade unions. This right is crucial for collective bargaining, allowing workers to negotiate
their wages, working conditions, and benefits collectively.
Right to Work and Business: Every citizen has the right to enter any lawful profession or to
conduct any lawful trade or business. This provision supports the pursuit of personal and professional
aspirations within the bounds of law.
Equality and Non-Discrimination: The Constitution mandates equality before the law and
prohibits discrimination on the basis of sex alone. This is vital for creating a workplace environment where all
individuals can thrive without bias.
These constitutional rights are not just theoretical; they drive the enactment of specific labor laws that detail
the mechanisms and protections necessary to enforce these rights. They also set the stage for the government
to take active steps in safeguarding these rights through legislation and regulation, ensuring that labor
practices across Pakistan are just, equitable, and supportive of workers' welfare.
List of Labour Laws in Pakistan - Pakistan's labor laws encompass a broad framework designed to govern
the relationship between employers and employees, ensuring fair treatment, safe working conditions, and
equitable employment practices. Here's an overview of the primary labor laws and their applications in
Pakistan:
Employees' Old Age Benefits Act, 1976- The Employees' Old Age Benefits Act, 1976 applies to every
industry and establishment in Pakistan that employs five or more individuals. This legislation ensures that
employees receive retirement benefits, which are funded through contributions from both employers and
employees to a fund managed by the Employees' Old Age Benefits Institution (EOBI). This act is crucial for
providing financial security to workers after retirement, ensuring they have a stable income.
Provincial Employees Social Security Ordinance, 1965- The Provincial Employees Social Security
Ordinance, 1965 extends health and old age benefits to workers across various sectors. This ordinance
requires employer contributions based on employee wages and is applicable to all establishments notified by
Provincial Governments. It plays a significant role in safeguarding workers' health and providing financial
stability in old age through benefits that cover medical expenses and pensions.
The Industrial and Commercial Employment (Standing Orders) Ordinance, 1968- Under the Industrial
and Commercial Employment (Standing Orders) Ordinance, 1968, any industrial or commercial
establishment employing twenty or more workers must regulate conditions of service, including work hours,
termination rules, and other employment terms. This ordinance aims to standardize employment practices and
ensure fair treatment of workers within the industrial and commercial sectors.
Workers’ Children (Education) Ordinance, 1972- The Workers’ Children (Education) Ordinance,
1972 mandates that establishments employing ten or more workers contribute towards funding education for
workers' children. This ordinance ensures that the children of workers have access to educational
opportunities, promoting better future prospects and contributing to the overall development of society.
Minimum Wages Ordinance, 1961- The Minimum Wages Ordinance, 1961 sets minimum wage
standards across all industrial and commercial establishments in Pakistan. This law is vital for ensuring that
workers receive fair compensation for their labor, protecting them from exploitation and helping to alleviate
poverty among working-class families.
Payment of Wages Act, 1936-The Payment of Wages Act, 1936 is designed to ensure the timely and fair
disbursement of wages to workers employed in any factory or industrial or commercial establishment. It
prohibits unauthorized deductions from wages, thus safeguarding the financial interests of employees.
Workmen’s Compensation Act, 1923- The Workmen’s Compensation Act, 1923 requires employers to
compensate workers who suffer employment-related injuries or diseases. Applicable to certain classes of
employers and their workers, this act is a fundamental piece of legislation that ensures workers are financially
protected in the event of work-related accidents or health issues.
The Factories Act, 1934 -The Factories Act, 1934 applies to any premises in Pakistan where ten or more
workers are employed. It addresses crucial aspects of worker welfare, including health and safety regulations,
working hours, leave entitlements, and other protections. This act is integral to maintaining safe working
environments and ensuring the health and well-being of factory workers.
Punjab Shops and Establishments Ordinance, 1969 - Specific to Punjab, the Punjab Shops and
Establishments Ordinance, 1969 governs the operation of shops and commercial establishments, regulating
work hours, conditions of service, and employment terms to ensure that workers in this sector are treated
fairly and their working conditions are up to standard.
Companies Profits (Workers’ Participation) Act, 1968- The Companies Profits (Workers’
Participation) Act, 1968 applies to companies that meet specific criteria based on the number of employees
or financial thresholds. It mandates the distribution of a portion of company profits to workers, fostering a
sense of ownership and participation among employees and aligning their interests with the growth and
success of the company.
Disabled Persons (Employment and Rehabilitation) Ordinance, 1981- The Disabled Persons
(Employment and Rehabilitation) Ordinance, 1981 requires establishments employing a certain number of
workers to hire persons with disabilities. This ordinance ensures that disabled individuals are given equal
employment opportunities and benefits, promoting inclusivity and equal rights in the workplace.
Apprenticeship Ordinance, 1962- Applicable to all industrial establishments notified by the Government,
the Apprenticeship Ordinance, 1962 regulates the training and employment of apprentices in various trades.
This ordinance ensures that apprentices receive proper training and are well-prepared to enter the workforce,
enhancing the skill levels of workers and supporting the development of the industry.
Employment of Children Act, 1991- The Employment of Children Act, 1991 is a crucial piece of legislation
in Pakistan that governs the employment of minors across all sectors. This act is designed to safeguard
children from exploitation and the dangers associated with labor at a young age, especially in hazardous
conditions.
Key Provisions:
It sets the minimum age for employment at 14 years in non-hazardous work.
Children between 14 and 18 years old are considered "adolescents" and may only be employed
under conditions that do not harm their health and well-being.
The law strictly prohibits the employment of children under the age of 14 in any factory or mine,
except in non-industrial work or family businesses where the work is not hazardous.
Regular inspections and penalties are enforced to ensure compliance with the act, aiming to protect
children from exploitation and harmful labor.
Specific Employment Provisions
In Pakistan, labor laws detail various specific provisions concerning employment contracts, types, terms, and
working conditions. These laws are crafted to ensure fairness in employment practices across different sectors.
Here’s a detailed look at these essential aspects of employment law in Pakistan:
Contract Types and Employment Terms
Permanent Contracts: The most common employment type, where employees are hired for indefinite
periods and enjoy full benefits and protections under the law.
Probationary Contracts: Employers may hire employees on a probationary basis, typically lasting three
months, to assess suitability before confirming their appointment.
Temporary Contracts: Used for specific tasks or limited periods, these contracts do not generally offer the
same level of job security or benefits as permanent contracts.
Apprenticeships: Designed for on-the-job training, these contracts are regulated under the Apprenticeship
Ordinance, ensuring that apprentices are fairly treated and adequately trained.
Working Hours, Breaks, and Rest Periods
Standard Working Hours: The typical work week is limited to 48 hours, with a standard of 9 hours per day.
Overtime: Employees working beyond the standard hours must be compensated at a rate higher than the
regular pay, often twice the normal rate.
Breaks and Rest: Employees are entitled to rest breaks during work hours, typically one hour for lunch and
prayers. Weekly rest days are usually observed on Sundays.
Wage Regulations
Minimum Wage: The government sets a minimum wage applicable to all workers, ensuring they receive fair
compensation for their labor.
Payment of Wages: Wages must be paid regularly and on time, typically monthly. The Payment of Wages Act
regulates these payments and prohibits unauthorized deductions.
Leave and Benefits- Pakistan’s labor laws provide structured entitlements to various types of leave and
benefits, ensuring employees' well-being and support during significant life events.
Annual Leave- As per the Factories Act, 1934, employees are entitled to annual leave with full pay after they
have completed 12 months of continuous service with an employer. This typically includes at least 14 days of
leave per year.
Maternity Leave- Under the Maternity Benefit Ordinance, 1958, female employees are entitled to maternity
leave of up to 12 weeks, divided as six weeks pre-delivery and six weeks post-delivery, with full pay.
Sick Leave- The entitlement and specifics of sick leave can vary by sector and individual employment
contracts, but typically, employees are entitled to up to 10 days of paid sick leave per year. Extended sick
leave may require medical certification.
Casual Leave- Casual leave provisions are also often outlined in employment contracts or internal company
policies, typically granting up to 10 days per year for personal emergencies or urgent matters.
Festival Leave- Festival leave is usually specified in the employment contract or company policy, aligning
with national and regional public holidays recognized by the government each year.
Other Leaves
Bereavement Leave: Some organizations offer bereavement leave for employees who have lost a close
family member, providing them time to grieve and manage familial affairs.
Study Leave: Aimed at promoting personal development, some employers offer leave for employees to
pursue higher education or professional training.
Each of these leave types is designed to support the employee’s health, familial, and personal needs while
maintaining their employment rights and benefits. These provisions not only ensure compliance with the laws
but also promote a healthy work-life balance, contributing to higher employee satisfaction and retention.
Health, Safety, and Occupational Hazards- In Pakistan, labor laws rigorously address health, safety, and
occupational hazards to protect workers across various sectors. These laws ensure safe working conditions
and impose specific obligations on employers to mitigate risks and promote workplace health. Here’s a
detailed overview of the key regulations and their implementations:
The Factories Act, 1934- This act mandates that all factories must maintain clean and safe working
conditions. It includes provisions for adequate ventilation, lighting, and sanitation facilities. It also requires
that machinery be properly maintained and guarded to prevent accidents. The act specifies measures for fire
safety, the use of protective equipment, and the reporting of accidents. It also sets regulations for the handling
of hazardous substances and the implementation of emergency protocols.
Occupational Safety and Health Ordinance, 1965- This ordinance applies to all industrial and commercial
establishments and aims to ensure that businesses adhere to standard safety practices and health regulations. It
outlines the duties of employers to provide a workplace free from recognized hazards that are likely to cause
death or serious physical harm. It also includes requirements for employee training in occupational safety and
health practices.
Provincial Employees Social Security Ordinance, 1965- While primarily focused on social security, this
ordinance also includes provisions related to occupational health services. Employers are required to
contribute to the social security system, which in turn provides medical care and benefits to workers suffering
from employment-related injuries or diseases.
Mines Act, 1923- Specifically targeted at mining operations, this act provides detailed safety regulations to
protect miners from the unique risks associated with mining. Regulations include adequate ventilation,
measures to control dust, the provision of safety lamps and equipment, and regular inspections to prevent
mine collapses or other accidents. Employers are responsible for implementing these laws and ensuring
compliance to create a safe and healthy working environment. Failure to adhere to these standards can result
in legal penalties and, more importantly, can put employees' health and safety at risk. The enforcement of
these regulations is overseen by various governmental departments, including the Department of Labour,
which conducts inspections and audits to ensure compliance.
Conclusion
Labor laws in Pakistan form a comprehensive framework designed to safeguard workers' rights, ensure safe
working environments, and promote fair labor practices. Over the years, these laws have been refined to align
with international labor standards and respond to the evolving needs of the workforce. The foundation set by
the Constitution of Pakistan, coupled with specific labor legislations, demonstrates the country's commitment
to upholding the dignity and rights of its workers.
Key Points:
Robust Legal Framework: Pakistan’s labor laws cover a wide array of areas including
employment terms, working conditions, leave entitlements, safety standards, and compensation for workplace
injuries. These laws ensure that workers enjoy secure and humane working conditions.
Enforcement Challenges: While the legal framework is strong on paper, the actual enforcement
of these laws can sometimes be inconsistent. This discrepancy often results from limited resources, varying
regional implementations, and the need for greater awareness among workers about their rights.
Role of Government and Employers: The government continues to play a crucial role in
enhancing labor law enforcement through regular inspections and the imposition of penalties for non-
compliance. Employers are also encouraged to adopt best practices in human resource management and to
ensure that labor laws are followed meticulously within their organizations.
Future Directions: Moving forward, Pakistan must focus on strengthening the enforcement
mechanisms and increasing the capacity of labor departments to handle disputes and compliance checks.
There is also a need for ongoing revisions to the laws to address new challenges in the labor market, such as
those posed by the gig economy and technological advancements in workplaces.
In conclusion, the labour laws in Pakistan are structured to promote social justice and economic efficiency by
protecting workers' rights and enhancing labor market flexibility. Continued efforts to improve law
enforcement and adapt to new labor market realities will be key to achieving sustainable economic growth
and the well-being of Pakistani workers.
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