ZAFAR & ASSOCIATES - LLP | Labour Law Services - Pakistan

Labour law arbitrates the relationship between workers, engaging entities, trade unions and the government whereas joint labour law relates to the three-way relationship between worker, owner and the union and individual labour law corresponds workers' rights at work through contract.

The rise of labour laws began during industrial revolution as the relationship between worker and owner changed from small-scale production studios to large-scale factories. Workers sought better conditions and the right to join (or avoid joining) a labour union, while owners sought a more predictable, flexible and less costly workforce. The state of labour law at any one time is therefore both the product of, and a component of struggles between various social forces.

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International Labour Organisation (ILO)

Founded in October 1919 by the League of Nations, the International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice through setting international labour standards. The ILO's labour standards are aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity. ILO has 187 member states and its headquarters are in Geneva, Switzerland. Pakistan is also a member country of ILO and it must ensure that its labour laws and labour policy complies with the standards set by ILO.

Labour Law Practice in Pakistan

Labour Law in Pakistan is very comprehensive and contains several Ordinances, Acts, Rules and Regulations and all other statutes relating to Industrial, Commercial and Labour Establishments which are widely scattered and inaccessible statutes. These different laws give authentic guide to the Employers, the Employees, the Trade Unions and the concerned Agencies to realize their respective responsibilities and to become aware of their prescribed legal rights to be asserted. The main objective of these laws is to achieve targets of higher productivity, reasonable profits, better wages and safeguard to workforce against any exploitation and unjust treatment.

Labour Laws in Pakistan date back to pre-partition era, which provided the basis for labour laws and policy making in the country and were progressive as they allowed trade union activities in all sectors and the workers had the rights of collective bargaining and even strikes. Labour laws in the constitution of Pakistan as well as different labour laws prevalent are explained as under:

Labour Laws Under the Constitution of Pakistan

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.

Annual Leave and Holidays

An employee is entitled to 14 calendar days paid annual leave, after completion of 12 months of continuous service. (Sec. 49-B of Factories Act).

Pay on Public Holidays

Workers are entitled to paid Festival (public and religious) holidays. Festival holidays are announced by Ministry of Interior, Islamabad and Provincial Government at the start of calendar year (usually 14 in number) (Sec. 49-I of Factories Act).

Weekly Rest Days

Workers are entitled to 1 day of rest per week (24 consecutive hours). The weekly rest day is usually Sunday. If a worker has to work on holiday; he can’t be made to work consecutively for 10 days without being given a compensatory holiday for full one day. (Sec. 35 of Factories Act).

Bonded Labour in Pakistan

Bonded Labour is considered similar to slavery due to the nature of the obligations attached to the debt. The creditor often artificially inflates the amount of the debt, often adding excessive interest, deducting little or none from the actual debt. Additionally, the creditor not only coerces through violent threats but through instruments of obligation to repay the said debt. Extra ‘costs’ of living such as housing, clothing or providing food is added into the debt and the amount of debt keeps increasing making the bondage last a lifetime, and even generations.

The Bondage System comes with an infringement of fundamental rights that the Constitution of the Islamic Republic of Pakistan have guaranteed. By keeping a person under Bonded Labour is taking away their fundamental Right to Freedom of Movement (Article 15), Freedom of Assembly (Article 16), Freedom of Association (Article 17), Freedom of Profession (Article 18), Freedom of Speech (Article 19) and the Right to be Equal Citizen (Article 25).

Article 11(3) of the Constitution of Pakistan prohibits forced labour. In line with the constitutional guarantee, the following laws are in place to combat the Bonded Labour System, namely:

• The Bonded Labour System (Abolition) Act, 1992

• The Bonded Labour System (Abolition) Rules,1995

• The Sindh Bonded Labour System (Abolition) Act, 2015

• The Khyber Pakhtunkhwa Bonded Labour System (Abolition) Act, 2015

• The Punjab Bonded Labour System (Abolition) Act, 1992 (Amendment, 2012)

• The Gilgit-Baltistan Bonded/Forced labour system (Abolition) Act, 2020

• The Punjab Prohibition of Child Labour at Brick Kilns Act, 2016

• Prevention of Trafficking in Persons Act, 2018

• The Pakistan Penal Code, 1860

Compensation

Overtime Compensation

In accordance with the section 47 of Factories Act, 1934; if a worker works beyond the stipulated working hours, i.e., 9 hours a day and 48 hours a week, he is entitled to an overtime pay that is double the rate of his ordinary pay (200% of the normal wage rate). In seasonal factories, workers may work up to 56 hours a week.

Night Work Compensation

There is no special pay premium for employees working overnight.

Sexual Harassment at Workplace

In accordance with the Protection Against Harassment of Women at Workplace Act, 2010, sexual harassment of workers is prohibited by law and is a punishable offence. A person convicted of sexually harassment convict can be imprisoned for a maximum term of 3 years, or fined with a maximum sum of PKR 5 Lakh (0.5 million) or with both. (Section 509 of Code of Criminal Procedure, 1898).

Health & Safety

Owner Cares

Chapter 3 of Factories Act makes it obligatory on the owner to provide for safe and healthy working environment to the workers. (Sec. 13-33Q)

Free Protection

No specific provision in the laws on provision of protective clothing, however Labour Protection Policy 2006 directs the enterprises to provide workers with protective clothing and equipment. In the same way, Factories Act, 1934 (Sec. 23-A) provides for compulsory vaccination and inoculation of workers and expenses are to be borne by employer.

Training

In accordance with the Factories Act, it is the responsibility of an employer to provide instruction, training and supervision as is necessary to ensure health and safety at work of his employees. (Sec. 38)

Labour Inspection System

Labour laws provides for an independent labour inspection system in the country. However, the inspection system is province based and there is no central inspection authority.

Social Security

Pension Rights

Social security laws provide for both full and partial/early pension. For full pension, a worker must have attained 60 years of age (55 years for women) with at least 15 years of contributions. A reduced pension is paid to the workers with ages from ages 55 to 59 (men) or ages 50 to 54 (women) with at least 15 years of contributions. Old-age pension is 2% of the insured worker's average monthly earnings in the last 12 months multiplied by the number of years for which contributions have been made. As for the early/partial pension, full pension is reduced by 0.5% for each month that the pension is taken before retirement age (So, a worker taking pension after 55 years of age gets only 70% of the full pension). If a worker does not meet requirements of full or partial pension, there is also an old-age grant. The minimum monthly pension from EOBI has been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015. (Sec. 22 of the Employees' Old Age Benefits Act, 1976)

Dependents' / Survivors' Benefit

Social Security laws provide for survivor benefit (these include dependents including widow, widower, children). The deceased worker must be a pensioner at the time of death. 100% of the deceased minimum pension is distributed equally among deceased's spouses. If spouses are not alive, this is distributed among orphans. In the absence of spouse and orphans, deceased's parents are paid this pension up to 5 years after the death of a worker. The minimum monthly pension from EOBI has been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015. (Sec. 22-B of the Employees' Old Age Benefits Act, 1976)

Invalidity Benefit

The above acts provide for invalidity benefit in the case of non-occupational accident/injury/disease resulting into permanent invalidity. If a worker is assessed with 67% loss in earning capacity, he/she is paid 2% of the average monthly earnings in the last 12 months multiplied by the number of years of covered employment. The minimum monthly pension from EOBI has been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015. (Sec. 23 of the Employees' Old Age Benefits Act, 1976)

Child Labour

Article 11 of the Constitution of Islamic Republic of Pakistan guarantees that “no child below the age of fourteen years shall be engaged in any factory or mine or any other hazardous employment. Realizing the crucial role of education in eradication of child labour, Article 25-A was added to the Constitution under the 18th Constitutional Amendment 2010, requiring the state to provide free and compulsory education to all children of the age of five to sixteen years. Education is the one of the most effective means of controlling and combating child labour.

Moreover, Employment of Children Act 1991 and Rules 1995 and Children (Pledging) of Labour Act and Employment of Children Rules have been implemented to curb this practice.

Domestic Work

Who is a Domestic Worker?

A domestic worker is one who works in or for another person’s home. For a person to qualify as a domestic worker, he/she must be engaged in domestic work within an employment relationship. In Pakistan, unfortunately no specific law exists for the rights of domestic workers but they’re provided in the new convention of ILO.

Domestic worker rights under the ILO Convention

The new convention requires provision of basic/fundamental rights to domestic workers on par with all other workers. Moreover, it requires that:

• Domestic workers are informed of their conditions of employment in an understandable manner through a written contract.

• Domestic workers are made to work only normal hours of work (which is 48 hours a week in Pakistan) and other provisions like overtime compensation, periods of daily and weekly rest and annual paid leave are complied with.

• Minimum Age and Minimum Wage regulations (as are the norm in a country) are complied with.

• Wages are to be paid in cash, however, only a limited portion of wages may be in kind.

Fair Treatment

Equal Pay

In accordance with the section 15 of the West Pakistan Minimum Wage Rules, 1962, the principle of equal remuneration for work of equal value between men and women workers will be applied while fixing wages. Since there is no specific law in the country to deal with the equal remuneration, the Federal Government is working on a draft of a model Provincial law on anti-discrimination which can be adopted by the Provincial Legislative assemblies.

Non-Discrimination

In accordance with the article 27 of the Constitution, "No citizen otherwise qualified for appointment in the service of Pakistan shall be discriminated against in respect of any such appointment on the ground only of race, religion, caste, sex, residence or place of birth". This article is only about the public sector jobs. We can't locate similar provision for non-discrimination in private sector employment.

Equal Choice of Profession

Women can't work in the same industries as men (Factories Act, 1934). Moreover, section 27 of Constitution of Pakistan 2010 also provides for gender based occupational segregation by saying that " specified posts or services may be reserved for members of either sex if such posts or services entail the performance of duties and functions which cannot be adequately performed by members of the other sex".

Maternity and Work

Maternity Leave

Female employees are entitled to a maximum of twelve weeks (or 3 months) of maternity leave with full pay. The six-week post-natal leave is compulsory. (Sec. 4 of West Pakistan Maternity Benefit Ordinance, 1958). The maternity leave in public sector is also 90 days (3 months) and during this time, wages are paid in full.

Income

The maternity leave is awarded with full pay. The qualifying condition is that the women must be working in enterprise at least four months prior to the date of delivery of her child. (Sec. 4 of West Pakistan Maternity Benefit Ordinance, 1958)

Free Medical Care

In accordance with section 38 of The Provincial Employees Social Security Ordinance, 1965, a woman is entitled to entitled to prenatal confinement and post-natal medical care, if she is entitled to maternity benefit under Sec. 36.

Trade Unions

Freedom to Join and Form a Union

Constitution and labour law provide for freedom of association and allow workers and employers to join and form unions. (Sec. 3 of Industrial Relations Act 2012). Constitution also supports freedom of association, subject to any reasonable restrictions imposed by law in the interest of sovereignty or integrity of Pakistan, public order or morality (Art. 17). IRA 2012 includes many exclusions which in effect deprive workers of the right to form and join unions.

Freedom of Collective Bargaining

Industrial Relations Act, 2012 (Sec. 19 onwards) allows employees to bargain collectively through their representatives.

Right to Strike

Right to strike is not considered as fundamental right. Moreover, go-slow actions are considering an unfair labour practice, strikes longer than 30 days can be prohibited by government order, and a party or the government can unilaterally compel arbitration, undermining the right to strike (Industrial Relations Act, 2012, Sec. 41-48).

Services provided by ZA-LLP

Our law firm works with clients who are in industries with labour unions, like law enforcement and teachers. We frequently handle cases dealing with collective bargaining, union creation, and union and management negotiation. We also handle legal disputes through lawsuits or out-of-court settlements in form of arbitration etc. Furthermore, we can act as hearing officers in contested representation matters.

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