employment and labour laws

Employment law is the body of laws and regulations that govern interactions between employers and employees. These laws aid in the efficient operation of the business with regard to employment-related issues in order to achieve the goals of increased productivity, justifiable profits, better pay, and a decrease in unfair practices or discrimination.

In the workplace, the connection between an employer and an employee is crucial yet sensitive. The success of the employer and the employee’s experience at work may be determined by this connection.

There are several things an employer needs to know before hiring someone. There are minimum wage laws that mandate what the employer must pay. Employers are not allowed to discriminate against applicants or employees based on certain qualities, according to the legislation.

 Employers are responsible for creating a secure workplace. They may need to provide choices for health insurance. Payroll taxes for employees must be collected and submitted by the employer.

 Employment practice in Pakistan:

Poor working conditions are prevalent in Pakistan. Employees are not protected by any legislation from working shifts longer than eight hours without being paid for overtime, nor do they get social security benefits, have the ability to form a union, or have a legislative right to weekly leave. Employment and Labour Laws protect the rights of employees.

The Pakistan Workers Federation (PWF) was established to represent all workers in the nation, regardless of their position in the workforce. Similar to this, provincial governments have established employee social security organizations to guarantee that workers and their families have access to healthcare, financial support, and other benefits.

The Pakistani constitution provides adequate protection for employee rights. Articles that safeguard the rights of workers may be found in the chapter on fundamental rights and principles of policy.

  • As mentioned in this article, Article 11 forbids all types of child labor, forced labor, and slavery.
  • This constitution also describes Article 17’s basic right to freedom of association and the ability to create unions.
  • Article 18 gives its residents the freedom to engage in any legal trade or company and to engage in any legal profession or vocation.
  • The right to equality before the law and the ban on discrimination based solely on sex are both stated in Article 25.
  • Article 37(e) contains provisions for guaranteeing fair and humane working conditions, preventing the employment of women and children in professions inappropriate for their gender or age, and providing maternity benefits for women in the workforce.

Industrial Relation Act in Pakistan:

  1. The Industrial Relations Act 2012

2. The Punjab Industrial Relations Act 2010

3. The Khyber Pakhtunkhwa Industrial Relations Act 2010.

4. The Baluchistan Industrial Relations Act 2010

5. The Sindh Industrial Relations Act 2013


A social security program was established by the Provincial Employees Social Security Ordinance of 1965 to give benefits to certain employees and their families in the event of illness, pregnancy, work-related accident, or death. However, with the passage of the 18th Amendment, the ordinance was devolved, and provincial workers’ social security agencies were established to provide the same benefits. Their names are:

Institution for Social Security of Punjab Workers (PESSI)

Institution for Social Security of Sindh’s Workers (SESSI)

Institution for Social Security of KPK Workers


One of the finest employment regulations ever passed in Pakistan was the Industrial and Commercial Employment (Standing Orders) Ordinance, which was adopted in 1968. The decision-makers at the time regarded it as Pakistan’s supreme piece of employment law.

According to the Standing Orders Ordinance, each employee must receive a written order outlining the terms and circumstances of his employment at the time of his appointment, transfer, or promotion. Every permanent employee is also entitled to a written certificate of service upon the termination of employment, discharge, retrenchment, or retirement from employment (S.O. 2-A and 18 of Standing Orders Ordinance, 1968)

Similar clauses may be found in the Sindh Terms of Employment (Standing Orders) Act 2015 and the Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Order) Act 2013 (Standing Orders 3 & 4). (Standing Orders 3 & 17).


According to Pakistani Employment and Labour Laws, workers on fixed-term contracts cannot do permanent jobs. A fixed-term (temporary) contract may not exceed nine months in duration, including renewals.

The laws of Sindh and Khyber Pakhtunkhwa permit the employment of workers on a contract provided the contract itself specifies the duration of the agreement.

While third-party employment is excluded, Sindh law defines a contract worker as “a person who works on a contract basis for a particular duration indicated in the contract, in any institution.”

A contract worker is someone who “works on a contract basis for a certain duration indicated in the Letter of Contract,” according to Khyber Pakhtunkhwa law. The law mandates that an employer acquire a No Objection Certificate (NOC) from the Employment Department before contracting out work that is not directly connected to the organization’s primary business. This NOC has specific requirements pertaining to the job and the hiring of contract employees and is only given for a term of 6 months at a time.


Businesses with less than five employees may voluntarily register their workers with the Employees’ Old-Age Benefits Institution.

This Act is administered by the Employees’ Old-Age Benefits Institution (EOBI), which also oversees its enforcement. The Ministry of Overseas Pakistanis and Human Resource Development oversees EOBI, a semi-autonomous entity. The operation of EOBI is overseen by a tripartite corporate Board of Trustees, which includes members from labor and business. Over three million employees are enrolled with EOBI, and 360,000 of these employees are receiving pension benefits. Another three million instances of unpaid employee contributions have been found by EOBI.

Industrial Relation Act 2012:

The Industrial Relations Act, 2012 (the “Act”) is applicable to all businesses and industries operating in Islamabad Capital Territory or in more than one province, with the exception of those employing workers in the government administration, the Pakistani Armed Forces, the Pakistani Police, the Pakistani Defense Services, the Pakistani Armed Forces Ordinance Factory, and the Pakistan Security Printing Corporation or Security Printing Corporation.

The Federal Government, as well as the Provincial Government both, have the authority to pass laws in this regard since the issues connected to the welfare of labor and trade unions were first specified in the concurrent legislative list at items Nos. 26 and 27. The Industrial Relations Ordinance, of 1969, which was issued by the Federal Government, was abolished by the Industrial Relations Act, of 2008.

The Industrial Relations Act of 2008 was scheduled to expire on April 30, 2010, unless it was repealed sooner, according to Section 87(3) of the aforementioned Act. Therefore, it was a transitory law that would have expired automatically on April 30, 2010, if it had not been renewed by parliamentary action.

 Prior to the Industrial Relations Act’s repeal, the concurrent legislative list was removed in 2008 and the 18th Constitutional Amendment was ratified, giving provincial governments the authority to adopt laws pertaining to labor and unions. Meaning that the issue of labor unions and industrial disputes fell within the jurisdiction of the appropriate province.

Rights of Employees:

We will discuss some rights of employees that the constitution grants to an employee.

Worker Welfare Fund:

The Ministry of Human Resource Development has administrative supervision over the “Workers Welfare Fund,” which is a nationally controlled fund. It is a self-governed organization having participation from all three tripartite partners on its governing board.

The following laws apply to the well-being of employees:

  • Employees Old Age Benefits Act 1976
  • Provincial Employees Social Security Ordinance 1965
  • Workers Welfare Fund Ordinance 1971
  • The Sindh Workers Welfare Act 2014
  • West Pakistan Maternity Benefits Ordinance 1958
  • Workers Children (Education) Ordinance 1972
  • Companies Profit (Worker’s Participation) Act 1968
  • Workers Compensation Act 1923.

Minimum Wage of Worker:

The minimum wage is the number of wages below which a business is not permitted to pay its workers. The following Employment and Labour Laws/Acts determine Pakistan’s minimum wage:

  • 1961’s Minimum Wage Ordinance (applicable in ICT and Baluchistan
  • Ordinance of 1969 on Minimum Wages for Unskilled Workers in Pakistan
  • 1961’s Minimum Wage Ordinance (adapted in Punjab by the 2012 Amendment Act
  • 2013’s Khyber Pakhtunkhwa Minimum Wage Act
  • 2015’s Sindh Minimum Wages Act

Provincial governments set the minimum wage. Under the Minimum Pay Ordinance of 1961, Minimum Wage (MW) Boards are authorized to suggest minimum wage rates for adults and minors working in industrial enterprises. It grants each province’s MW Board the authority to set the minimum wage rate, including for workers in sectors with ineffective wage control. The list of industries included differs as much in each province.

Social Security Benefit:

All individuals working for Pakistan must get social security via either required social insurance or other ways.

While the government has established particular systems for public-sector workers, members of the armed forces, police officers, staff members of statutory organizations, local governments, and railroads, this Act exclusively applies to the private sector. In addition to this, the government also oversees additional social assistance programs for the benefit of needy and impoverished individuals. The Pakistan Baitul Mal Act of 1992 and the Benazir Income Support Program Ordinance of 2010 (the program began in 2008) give benefits to Pakistan’s impoverished Muslim inhabitants, while the Zakat and Ushr Ordinance of 1980 helps all of the country’s people, regardless of faith.

Regarding the benefits, it offers the four categories of benefits listed below to those who are insured or their survivors.

  • Senior Pension (or Reduced Pension)
  • Veterans’ Pension
  • Old Age Pension
  • Senior Grant (if an employee is not eligible for pension).

All businesses (industrial or commercial, including banks), whether they employ five or more people on a contract basis or on a regular basis, are subject to the Employees’ Old-Age Benefits Act. Even if the number of employees is later decreased to fewer than five, the rules still hold true. Employees of companies with fewer than five staff members may voluntarily register with the Employees’ Old-Age Benefits Institution.

Death Grant:

A death grant is given to the family of a dead worker under the Workers Welfare Ordinance of 1971 in order to provide them with some financial help during their time of loss and sadness. The death reward was formerly worth Pkr 150,000 but is now worth Pkr 500,000. The employee must be registered with EOBI and Social Security, while mine employees are exempt from this requirement. The provision of this award is likewise not subject to any salary or service ceilings.

Right to Pension:

Employment and Labour Laws and social security allow for both full and early/partial pensions. A worker must have made at least 15 years of contributions and reached the age of 60 (or 55 for women) in order to receive a full pension. Workers who have made at least 15 years of contributions and are between the ages of 50 and 54 (for women) or 55 and 59 (for males) get a reduced pension. (Employees’ Old Age Benefits Act, 1976, Section 22)

Benefits of dependence and survivorship:

Survivor benefits are provided through Social Security legislation (these include dependents including widows, widowers, and children). The worker who passed away had to be a retiree at the time. The spouses of the dead share equally in the deceased’s minimum pension, which is 100%. (Employees’ Old Age Benefits Act, Section 22-B, 1976)

Advantage of Invalidity:

The aforementioned legislation provides benefits for lifelong invalidity in the event of non-occupational accidents, illnesses, or injuries. (Employees’ Old Age Benefits Act of 1976, Section 23.)

Initial Recruitment:

Regulations and requirements for work permits apply to the recruiting and selection process in Employment and Labour Laws. There are just a few, generic laws governing data privacy and discrimination (see Discrimination) (see Data Protection). Specific recruiting and selection tactics are not expressly controlled nor outlawed. In general, all workers are required to provide documentation on their criminal histories and pass a physical.

Discrimination in Selection:

discrimination in employment on the base of gender
Gender discrimination in employment and labor. both genders is not equally paid.

Employment and Labour Laws forbid any discrimination that hinders equal opportunity employment and access to work, although it does not include any specific reasons for such discrimination (such as sex, race, age, political stance, philosophical belief, or religion) (see Prohibition of Discrimination). Employers are prohibited from making discriminatory hiring or selection decisions against people who have special needs or disabilities by a Ministerial Decree.

Probation Period:

The Probation Period is a trial provision in the employment contract.

The probationary phase lasts for three months.

The employment contract may be terminated by either party at any time during the probationary period without giving previous notice (see Notice Period) or incurring a penalty. For the days worked, the employee has a reserved right to pay and other benefits.

If the employee successfully completes the probationary term, it must be taken into account when calculating the length of time, the employee has worked continuously for the firm.

In order to incorporate persons with special needs, employers must take into account utilizing a number of channels to post job openings and accept applications in Employment and Labour Laws. They should think about changing their selection processes to allow candidates with special needs to showcase their abilities (ie giving them more time in interviews).

Payment of wages:

Employment and Labour Laws provide that:

  • Employees who are paid on an annual or monthly basis must get their paychecks at least once each month.
  • The pay or salary of a pregnant employee must be paid in full during the delivery holiday.
  • The lady who took advantage of the delivery vacation with full pay is entitled to earn the wage or salary for the time she would have normally taken off from work in the same year.

A factory, railroad, or industrial or commercial organization with less than 1000 employees is required to pay its workers before the seventh day has passed since the final day of the pay period.

Disability of Employee:

“A person with a disability” is defined as “an individual whose possibilities of obtaining, maintaining, and progressing in acceptable work are significantly diminished as a consequence of a legally acknowledged physical or mental impairment.”

According to employment and Labour Laws, handicapped employees cannot have less advantageous terms and conditions of work than other employees in a given firm. A handicapped individual cannot, therefore, be employed at a lesser salary and with fewer benefits.

The Disabled Persons Rehabilitation Fund must receive the monthly amount that a business that does not employ handicapped people would have paid as salary or wages to a disabled person if they were employed.

If a business chooses not to hire handicapped people, it must contribute at least PKR 14,000 per month to the aforementioned fund if it employs 100 people in total.

Maternal leave:

Six weeks of maternity leave are granted before and six weeks after childbirth to women who have worked for at least four months in the company immediately before the day of delivery Employment and Labour Laws. The leave is provided in exchange for payment of the entire wage, and a woman’s employment cannot be terminated as a result. There is no restriction on how many times a woman may use maternity leave while working for the same company.

According to the agreement, it is illegal for an employer to fire a woman while she is pregnant or on maternity leave unless the reason is unconnected to the pregnancy or delivery of the child. When a woman returns to work following maternity leave, she must be given one or more daily breaks or have her work hours reduced every day so that she may nurse her kid. These are to be paid for in accordance with their inclusion as working hours.

The Sindh Maternity Benefits Act 2018 adheres to the spirit of its primary clauses. The Act grants a woman who has worked continuously for a year before the anticipated due date four weeks of prenatal and twelve weeks of postnatal leave at full pay.

The Sindh Act also allows businesses with ten or more workers to establish childcare facilities. The female worker is allowed to attend the center four times a day to feed, wean, and nurse the infant.

According to the Sindh Employees Social Security Act of 2016, a woman covered by the Act is entitled to a total of 12 weeks of maternity leave as long as her payments have been made for at least 180 days. Businesses and industrial settings have diverse maternity leave policies and procedures that apply to their female workers. Effective legislation is needed to provide consistency in this area.

It is against the law for an employer to fire a female worker while she is on maternity leave. Additionally, an employer is not allowed to fire a worker six months before the child’s due date.

These statutes’ qualifying periods vary in the following ways:

Female workers who work for a minimum of four months prior to their projected due date are eligible for maternity benefits under the Khyber Pakhtunkhwa Maternity Benefits Act 2013, the Punjab Maternity Ordinance 1958, and the West Pakistan Maternity Benefit Ordinance 1958.

According to the Sindh Maternity Benefit Act of 2018, all female workers who have worked continuously for a full year before their projected due date are eligible for maternity benefits.

According to the Mines Maternity Benefit Act of 1941, women who have been employed for at least six months prior to their projected due date are eligible for maternity benefits.

Paternity Leave:

A maximum of seven days of paternity leave are given to workers on the day of the baby’s birth or just before. Only two instances of this leave are permitted during the whole service described in Employment and Labour Laws.

Whereas under the Punjab Civil Servants Act, an employee is entitled to a paid seven-day paternity leave on or before the kid is born. This leave may only be used twice during the whole length of service and is not credited against the normal leaves account. Employees of the Sindh Police and National Commission on the Status of Women are eligible for 10-day paternity leave.

Medical Leaves:

If an employee has finished their probationary term and is suffering from a condition other than those caused by their line of work or accidents on the job, they are entitled to sick time and this is described in Employment and Labour Laws.

The following maximum paid sick leave, backed by a medical report, is available to all employees:

121 days (in a year) in the event of common diseases

In the event of cancer or TB, 365 days (in a calendar year).

It is possible to prolong sick leave without compensation.

For common diseases, the company must pay 75% of the employee’s most recent paycheck, whereas 100% of the employee’s most recent paycheck must be paid for cancer and TB.

On the other hand, in the event of a work accident, an employee is entitled to receive 100% of their pay for a period of 180 days.

A worker who is ill, pregnant, injured, or receiving medical attention cannot be fired, reduced in pay, reduced hours, or otherwise punished by their employer.

Sick leave must be supported by a medical report from the employee’s primary care physician or the company doctor that covers the whole duration of absence. The employer has the right to request that a medical examiner verify the certificate that was provided by the employee.

Marriage Leave:

Employment and Labour Laws describes Two weeks of paid leave are given to employees for their weddings, although this is only given “once” while they are working for the firm.

Public Holidays:

National and public holidays are considered to be compensated days off for employees. At the beginning of each calendar year, the Provincial Government and the Ministry of Interior, Islamabad, proclaim the public holidays.

 Rest or break-in period:

The legislation also states that no employee may be made to work continuously for more than six hours without at least an hour-long break for rest or a meal.

Working Hours and Days:

No employee who has turned 18 years old may be compelled to work more than nine hours per day and 48 hours per week in any institution. No young person under the age of 18 may be made to work more than seven hours per day, or 42 hours per week, under any circumstances.

An employee who works in a factory that is seasonal is only permitted to put in a maximum of 10 hours per day and 50 hours per week. However, if such an adult person works in a plant where the job must be done continuously for technical reasons throughout the day, they are only allowed to work a maximum of 56 hours per week.

The periods and hours of work for all classes of workers during each shift in factories must be announced and displayed in a visible location in the industrial or commercial establishment’s primary language.

Throughout Ramadan. In industrial, commercial, and service organizations, specific shortened working hours are observed.

Overtime is defined as any hours beyond the statutory maximum for regular working time.

Twelve hours per week are the limit for overtime. Workers may put in a maximum of 2 to 3 hours of overtime each week while taking the aforementioned spread-over limitations into account. Additionally, no more than 624 hours should be worked overtime per year.

Depending on the business needs, an employer may force an employee to work on a holiday. In these circumstances, the employer is required to give the worker a day off on a different day or to compensate them with a full day’s salary for each day worked.

Bereavement Leave:

In the case of the death of a first-level relative—a parent, grandparent, spouse, child, sister, or brother—employees are entitled to a paid day off.

When the employee returns to work, a proof document (such as an obituary paper) should be sent to the HR department.

Compensatory Holiday/rest:

On weekly rest days and legal holidays, workers may be required to report for duty. Instead, compensatory vacations are provided by legislation.

Annual Leave:

According to Employment and Labour Laws Once an employee has worked for a company for a full year, they are eligible for paid time off.

Employees who have worked continuously in a plant for the previous 12 months are entitled to 14 consecutive days of vacation over the next 12 months.

This statute does not mention whether seniority or length of service affects the amount of paid yearly vacation.

The company is required to pay the employee’s base salary as well as any allowances that are a component of their compensation during the yearly vacation. Before the commencement of their yearly break, factory workers get half of their salary due. The yearly leave must be used consecutively and cannot be divided; however, if an employee does not use their whole allotment of leave during the 12-month period, it is carried over to the next year. A maximum of 14 days of unused vacation time may be carried over.

During annual vacation, the employer is not allowed to fire an employee or give them a notice of termination.

Discrimination Bar in Employment:

The Constitution lays out the State’s responsibilities for achieving equality, including raising peoples’ standards of living, preventing the concentration of wealth and distribution systems in the hands of a small number of people at the expense of the general interest, and ensuring an equitable distribution of rights between employers and employees as well as landlords and tenants.

“No citizen otherwise competent for employment in the service of Pakistan will be discriminated against in respect of any such appointment on the basis merely of race, religion, caste, sex, domicile or place of birth,” states the Constitution.

Every person has the freedom to engage in any legal vocation or profession and to run any legal commerce or company. After following the required steps, employees are free to select their profession and terminate their job whenever they like. Employees have the right to switch employment after giving their employer the required notice.

Sexual Harassment:

Sexual harassment is illegal and is a crime that carries a penalty. Anyone found guilty of sexual harassment faces a maximum sentence of three years in jail, a maximum fine of PKR 5 Lakh (0.5 million), or both.

Unwelcome and unwanted sexual approaches, demands for sexual favors, and any verbal or physical contact of a sexual character that fosters an unfriendly or uncomfortable atmosphere are all examples of sexual harassment. It may also be seen as discriminatory behavior and a kind of aggression towards women (and males, who can also experience sexual harassment).

Employers are required to treat similarly situated workers fairly.

The employee may terminate the contract before the end of the period or without giving a notice period if the employer sexually harasses the employee or the employee is sexually harassed at work by another employee and the necessary measures are not taken despite the employer knowing about the harassment (see Notice Period).

On the other hand, companies have the right to revoke an employee’s employment agreement if they sexually harass another employee. Additionally, it is aggravating to conduct sexual harassment while taking advantage of the ease of doing so at the same place of employment.

The Labour Law forbids discrimination between workers doing the same job activities as well as any discrimination that disadvantages equal employment opportunities, equal access to jobs, equal continuity of employment, or equal enjoyment of rights. This blanket restriction does not give any specific justifications for why discrimination is prohibited (i.e. sex, race, or age).

The employer is prohibited from discriminating against working men and women in the following areas: job kind, pay or salary amount, employment, promotion, professional qualifications, and attire.

Trade Union:

Trade unions are groups of workers whose main goal is to advance and protect their rights and interests in a certain sector or organization.

A person has a guaranteed right to join an organization. Every person is entitled to the freedom to organize groups or unions, subject to any lawful limitations that are necessary to protect Pakistan’s integrity, sovereignty, or public order. Along with freedom of association, the Constitution also recognizes collective bargaining as a basic right.

Both employers and workers are permitted to create and join trade unions under Pakistani labor legislation. In Pakistan, there is specific legislation for the registration of unions and the resolution of labor disputes.

The Industrial Relations Act of 2012 unifies the laws governing the creation of unions and federations of unions, choosing the agents who will represent workers’ interests in collective bargaining, and regulating the interactions between employers and employees. It declares unequivocally that workers have the freedom to establish unions and join groups of their own choice without seeking permission beforehand. The Act also specifies how to prevent and resolve any conflicts or disagreements. The National Industrial Relations Act and the Provincial Industrial Relations Act do not prevent workers from starting and joining the unions of their choice.

Strikes and Lockouts:

Strike action abstract concept vector illustration. Anti-globalism action, labor union movement strike, employees stopping working, industry blockage, stoppage, salary dispute abstract metaphor.

A lockout results in the closing of the business, while a strike is the collectively coordinated suspension of work by workers at a certain firm. A strike or lockout includes the suspension or refusal of an employer to keep an employee on staff when the action is connected to a labor dispute or when the goal of the action is to force an employee to accept a certain set of terms of employment. Strikes and lockouts, unlike the freedom to association and collective bargaining, are not basic rights, it must be emphasized here.

Only industrial issues may be the cause of a strike or lockout; personal complaints are not permitted. Only an employer or a CBA may initiate an industrial dispute after taking certain precautions. They must first engage in negotiations on any future labor disputes. Parties to a dispute may seek conciliation if negotiations fail to address the issue. A tripartite Board of Conciliators may be appointed by the federal or provincial governments at the request of the employer or the CBA. Both parties have the option of arbitration if conciliatory efforts are unsuccessful. The arbitrator’s decision is binding and cannot be challenged. The CBA may go on strike or the employer may declare a lockout if they choose not to send the dispute to an arbitrator. Any party may submit an application to the Labour Court for adjudication during the strike or lockout.

Termination of Employment:

The following three categories may also be used for group termination.

  • “Automatic termination” occurs when a job contract expires without notice due to events like an employee’s death or the conclusion of the project or contract for which they were employed.
  • An employee may resign from employment in order to take advantage of a better job opportunity, when working conditions are unfavorable, or if the employer has materially broken the terms of the employment contract.
  • a dismissal brought on by an employer and based on either reasonable or unjust reasons.

Termination by Employer:

According to the Labor Law, a written letter outlining the specific grounds for termination of employment is required. This rule applies to dismissals for misbehavior as well as simple termination. Although the aforementioned legislation mandates that the employer provide reasons for the termination, it does not provide any specific grounds for which the employment relationship may be properly ended (fair grounds for dismissal).

The following are some acceptable and legal grounds for terminating an employee’s employment (apart from misconduct): “severe sickness, inability to execute work duties, financial and economic demands of the establishment.”

Serious misbehavior is sufficient grounds for termination, provided the employee is given a chance to refute the accusations. However, not all behaviors call for dismissal as a penalty.

A permanent employee’s services cannot be terminated for any reason other than misbehavior without one month’s notice from the employer or, in the case of voluntary resignation, from the employee. The average salary earned during the previous three months of employment is used to compute one month’s pay

All service terminations, regardless of their format, must be recorded in writing and include an explanation of the circumstances. Within three months of the occurrence of the cause of action, an employee who feels wronged by a termination order may continue and bring the grievance to the employer’s attention in writing, via the shop steward, or through the trade union.

In addition to the statutory notice and severance package, the employer has the right to terminate an employee’s employment for certain misconduct-related reasons without providing notice.

However, if an employer terminates an employee with cause and gives them notice, they have the right to compensation.


The employee may seek to be fired and get the dismissal indemnification if they are 60 years old or have 15 years of service with the same company.

Workers who have made at least 15 years of contributions and are between the ages of 50 and 54 (for women) or 55 and 59 (for males) get a reduced pension.

When an employee’s employment contract is terminated for whatever reason, any unclaimed yearly leave pay must be given to the employee at the hourly rate in effect on the termination date.

Final Settlement:

in Employment and Labour Laws it is stated that The date of the contract’s termination shall serve as the start date for any statutory limits on such earnings that have become due. The periods of notice and the leave of absence to be provided for looking for new work when an employment contract has been terminated by the employer shall not conflict with the yearly leave period.

If there is a good cause, the employer may end the employment relationship. The employer is not required to provide the severance payment if the employment relationship is terminated owing to immoral, dishonorable, malicious, or other similar behavior.

In other situations, the employer is responsible for providing the severance.

The employer is responsible for informing the workers covered by job security requirements of their performance or inappropriate behavior and obtaining a written defense before terminating the contract.

Rights of Employer:

Employment and Labour Laws also gives the employer the right to apply disciplinary measures once wrongdoing has been placed.

According to these Employment and Labour Laws, there are 12 different kinds of actions and inactions that constitute misconduct.

The willful defiance of any legitimate and fair command from a superior, whether acting alone or in a group.

theft, dishonesty, or fraud involving the employer’s property or company.

intentional loss or damage to the employer’s assets or property

accepting or dispensing bribes or any other illicit reward

absences that are habitual or last longer than ten days.

regular tardiness in attendance

a pattern of breaking any law that applies to the institution.

Rioting, disruptive conduct, or any other act that undermines discipline during business hours at the institution

routine carelessness or disregard for the job.

repeated performance of any action or inaction.

striking at work or encouraging others to strike in violation of the law.


Any of the following sanctions may be imposed on an employee who is determined to have engaged in misconduct:

Up to three paise in the rupee of the employee’s monthly earnings may be fined in the manner specified by the Payment of Wages Act of 1936.

withholding an advancement or promotion for a predetermined, maximum one-year time.

lowering to a lower position.

termination without any kind of remuneration in lieu of notice.

Discipline begins with an employee’s unwilling behavior, which the law refers to as misbehavior. Such an action ought to be against the law and against corporate policy.

After seeing wrongdoing, a supervisor is required to start an incident report.

After reviewing the incident report, management will provide the accused with a charge sheet if they deem it necessary.

As required by law, the employer must sign the charge sheet. A reasonable amount of time, usually between three and seven days, is allowed for an employee to submit a defense to a charge sheet.

If the worker’s response to the charge sheet is deemed inadequate or the employer wishes to look into the subject further, the employer may request an impartial investigation into the complaint made against the worker.

An employee will get an inquiry notice with instructions to come before the inquiry officer or board of inquiry with their defense, including any witnesses and supporting documentation they want to present.

An employer may suspend the accused employee in Punjab for a maximum of four days at a time, and in Sindh and Khyber Pakhtunkhwa for a maximum of one week. Four weeks is the maximum suspension duration that may be granted.

During the course of the inquiry proceedings, the accused must be given a fair chance. Cross-examination of the prosecution, the accused, and their witnesses are permitted. Any individual may be questioned by the inquiry officer in order to record a statement for the investigation.

Following the conclusion of the inquiry processes, the inquiry officer or the inquiry board must provide a report to the employer outlining their conclusions about the accusations made against the accused in the charge sheet.

If charges are confirmed, employers must render a final decision after assessing the level of misbehavior committed by the accused.

Employers may use one of the following sanctions at once

Upon clearance from the Chief Inspector Factories, Punjab, a fine of up to 3% of wages may be imposed.

Withholding an increase or a promotion for no longer than a year

lowers to a lower position.



The Payment of Wages Act permits the following deductions from an employee’s pay.


  • Deductions for absences from duty; According to the law, it is a violation of the contract when 10 or more people fail to report for work without enough warning and justification. When workers take such a step, the employer is allowed by law to withhold up to eight days’ worth of compensation. Women and workers under the age of 15 are excluded from such salary deductions for contract violations, however, according to the legislation.
  • Deductions for losses or damages to property that has been specifically committed to the employee’s care, for example, lost property or money, when the loss or damage may be clearly linked to negligence or default.
  • Deductions for lodging provided by the employer at a home.
  • Deductions for any facilities and services that the employer provides that the provincial government may, by general or specific rule, authorize.
  • Deductions are made to make up for overpayments of wages or to recoup advances.
  • Deductions for the employee’s owed income taxes.
  • Deductions mandated by a court order or other entity with the jurisdiction to issue such an order.
  • Subscription payments to and repayment of loans from any authorized Provident Fund.
  • Deductions to cover contributions to cooperative organizations that the provincial government has authorized or to an insurance program managed by the Pakistan Post Office.
  • Deductions paid in support of any war savings plan that has been authorized by the provincial government with the employer’s written consent.

According to the Government of Punjab’s minimum wage notice, employers and employees may agree to take deductions for living accommodations (PKR 162 per month) and transportation services (PKR 33 per month).

Remedies available to Employees:

Challenge Dismissal:

If an employee thinks they have been fired arbitrarily (see Arbitrary Dismissal) or without the proper process or notice, then Employment and Labour Lawsgive remedies to employee. They may file a complaint with the Ministry of Labour, which will attempt to mediate a fair resolution. If this doesn’t work, the Ministry may give the employee permission to file a lawsuit in the labor courts.

If the court decides that an employee was fired arbitrarily or without cause, it may impose a judgment requiring the company to compensate the employee.

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