Employment law in Pakistan
Employment law in Pakistan is governed by a combination of statutes, regulations, and judicial interpretations that aim to regulate the relationship between employers and employees, ensuring the protection of workers' rights while also fostering economic growth. The primary sources of labor law in Pakistan include national legislation, such as the Industrial Relations Act 2012, the Factories Act 1934, the Pakistan Industrial Relations Act 2010, and other labor-related laws and regulations.
Here is an overview of employment law in Pakistan:
1. Employment Contracts
Written Contracts: Under Pakistani law, employees are entitled to a written employment contract, especially when employed for a longer period. While there is no statutory requirement for all employees to have written contracts, it is generally advisable to outline the terms and conditions of employment, such as job duties, wages, working hours, leave entitlements, and termination conditions.
Implied Terms: Even in the absence of a formal written contract, the Pakistan Labour Laws create implied obligations for employers, including the payment of wages, adherence to health and safety standards, and the provision of social security benefits.
2. Wages and Salary
Minimum Wage: Pakistan has a minimum wage law, which sets the minimum pay for workers. The rate is periodically revised by provincial governments, as labor laws in Pakistan are administered at the provincial level. For example, in 2023, the minimum wage was PKR 25,000 per month for unskilled workers, but this can vary based on regions and sectors.
Overtime Pay: If employees work beyond the standard working hours, they are entitled to overtime pay, which is typically 1.5 times the regular hourly rate for overtime work. This applies to employees working more than 9 hours a day or 48 hours a week.
3. Working Hours and Rest Periods
Standard Working Hours: The Factories Act 1934 and the Punjab Shops and Establishment Ordinance 1969 set the standard working week at 48 hours, typically 6 days a week, with 8 hours per day. However, working hours may vary depending on the industry and sector, and some exceptions exist.
Breaks and Rest Periods: Employees are entitled to rest periods, including at least a 30-minute break after working for 5 continuous hours. There should also be a weekly day off (usually Sunday).
4. Leave Entitlements
Annual Leave: Under the Factories Act and other related laws, employees are generally entitled to 14 days of paid annual leave after completing one year of service with the employer.
Sick Leave: Employees are entitled to 10 days of paid sick leave each year. This leave is typically granted with medical certification.
Maternity Leave: Female employees are entitled to 12 weeks of maternity leave, of which 6 weeks must be taken after childbirth. The leave is paid, and the employee is entitled to full pay during this period, provided she has completed at least 4 months of continuous service.
Public Holidays: Pakistan recognizes several public holidays, such as Eid ul-Fitr, Eid ul-Adha, and Independence Day. Employees are generally entitled to paid leave on these public holidays. If an employee works on a public holiday, they are entitled to receive double their regular wages.
5. Employment Rights and Protection
Termination of Employment:
Dismissal: If an employer wants to terminate an employee, they must follow the legal process set out under the Industrial Relations Act 2012. Employees cannot be dismissed without cause or due process. If an employee is dismissed without just cause, they may be entitled to compensation, including severance pay or reinstatement.
Notice Period: Employees or employers are generally required to give a notice period before termination. The length of the notice period typically varies, but it is generally 30 days for monthly-paid employees. In the case of dismissal for misconduct, the employer may not be required to give notice or compensation.
Redundancy and Severance Pay: Employees who are laid off due to redundancy or company closure may be entitled to severance pay based on the length of service. The minimum severance pay entitlement is typically one month's salary for every year of service.
Unfair Dismissal: If employees believe they have been dismissed unfairly, they can appeal to the Labour Court or the Federal or Provincial Labour Appellate Tribunal. The court may order reinstatement or compensation.
6. Health and Safety
Health and Safety Regulations: The Factories Act 1934 and the Employees' Social Security Ordinance 1965 set out provisions for the health and safety of workers in industrial settings. Employers are required to ensure the health, safety, and welfare of workers by providing safe working conditions and proper equipment.
Occupational Health and Safety: Employers must comply with regulations regarding machinery, protective gear, ventilation, and working conditions that could pose a risk to workers' safety and health. If an employer fails to do so, they can face legal consequences, including fines and penalties.
Workplace Injury and Compensation: If employees are injured at work, they are entitled to compensation through the Workers' Compensation Fund and may also claim for medical treatment. The Employees' Social Security Ordinance 1965 provides social security benefits to workers in case of work-related injuries or diseases.
7. Social Security and Benefits
Employees' Social Security: Pakistan provides a social security system that covers workers in certain industries. Under the Employees' Social Security Ordinance 1965, workers are entitled to benefits such as sickness benefits, disability benefits, and pension.
EOBI (Employees Old-Age Benefits Institution): The EOBI Act 1976 provides a pension scheme for workers in the private sector, and employers are required to contribute to the EOBI scheme on behalf of their employees. Workers who have been employed for at least 3 years are entitled to a pension upon reaching retirement age (60 years).
Health Insurance: In addition to government-provided social security benefits, many companies provide health insurance for their employees as part of their compensation package.
8. Child Labor and Employment of Minors
Child Labor Laws: Pakistan has specific laws prohibiting child labor. The Employment of Children Act 1991 and the Bonded Labour System Abolition Act 1992 prohibit the employment of children under 14 years old in hazardous work environments. However, child labor remains a challenge in certain sectors, including agriculture, domestic work, and manufacturing.
Minimum Age for Employment: The minimum age for employment is 14 years for non-hazardous work. For hazardous work, the minimum age is 18 years.
9. Unionization and Collective Bargaining
Right to Form Unions: Workers in Pakistan have the right to form trade unions and engage in collective bargaining with their employers. However, unions must be registered with the Labour Department.
Collective Bargaining: Once a union is formed, workers can engage in collective bargaining to negotiate better wages, working conditions, and benefits. The Industrial Relations Act 2012 governs the collective bargaining process.
10. Dispute Resolution and Labour Courts
Labour Courts: Disputes between employers and employees, such as claims for unfair dismissal, wages, or safety violations, are generally resolved in Labour Courts. These courts handle a range of employment-related issues and are designed to expedite the resolution of labor disputes.
Labour Appellate Tribunal: If either party is dissatisfied with the Labour Court's decision, they can appeal to the Labour Appellate Tribunal, which is the highest body for resolving industrial disputes in Pakistan.
11. Foreign Workers
Work Visas: Foreign workers seeking to work in Pakistan must obtain a valid work visa. Employment of foreign workers is typically regulated under the Foreigners Employment Ordinance 1979, and they must follow specific procedures to obtain permission from the government.
Work Conditions for Foreign Workers: Foreign workers are entitled to the same rights as local workers under Pakistani labor laws, including wages, working hours, and safety regulations, unless otherwise specified in their employment contract.
Conclusion
Employment law in Pakistan provides a broad framework for workers' rights and employer responsibilities, although implementation can sometimes be inconsistent, especially in certain industries. Key protections include regulations on wages, working hours, health and safety, termination, and workers' social security benefits. However, challenges such as child labor, informal work, and non-compliance with labor standards remain prevalent in some sectors. Employees have access to labor courts and tribunals to resolve disputes, but many issues continue to persist due to enforcement gaps. For more complex or specific matters, it is advised to consult a local labor lawyer or legal expert.
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