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Labour Laws in Pakistan

By Ali Raheel Khowaja


Labour laws in Pakistan have evolved significantly since independence in 1947, shaped by the country's socio-political changes.

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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.

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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.


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.