Labor and Employment Laws

ULC has substantial experience in labor law matters, almost of every aspect in this respect, ranging from labor-management relations to fair employment practices, benefit planning and litigation.
The Constitution of Pakistan contains a range of provisions with regards to labor rights found in Part II: Fundamental Rights and Principles of Policy.

• Article 11 of the Constitution prohibits all forms of slavery, forced labor and child labor;

• Article 17 provides for a fundamental right to exercise the freedom of association and the right to form unions;

• Article 18 prescribes 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.

Pakistan’s labor laws trace their origination to legislation inherited from India at the time of partition of the Indo-Pak subcontinent. The laws have evolved through a continuous process of trial to meet the socio-economic conditions, state of industrial development, population and labor force explosion, growth of trade unions, level of literacy, Government’s commitment to development and social welfare. To meet the above named objectives, the government of the Islamic Republic of Pakistan has introduced a number of labor policies, since its independence to mirror the shifts in governance from martial law to democratic governance.

Under the Constitution labor is regarded as a ‘concurrent subject’, which means that it is the responsibility of both the Federal and Provincial Governments. However, for the sake of uniformity, laws are enacted by the Federal Government, stipulating that Provincial Governments may make rules and regulations of their own according to the conditions prevailing in or for the specific requirements of the Provinces.

The Industrial and Commercial Employment (Standing Orders) Ordinance was enacted in 1968 to address the relationship between employer and employee and the contract of employment. The Ordinance applies to all industrial and commercial establishments throughout the country employing 20 or more workers and provides for security of employment. In the case of workers in other establishments, domestic servants, farm workers or casual labor engaged by contractors, their labor contracts are generally unwritten and can be enforced through the courts on the basis of oral evidence or past practice.

The services of a permanent worker cannot be terminated for any reason other than misconduct unless one month’s notice or wages in lieu thereof has been furnished by the employer or by the worker if he or she so chooses to leave his or her service. One month’s wages are calculated on the basis of the average wage earned during the last three months of service. Other categories of workers are not entitled to notice or pay in lieu of notice.

All terminations of service in any form must be documented in writing stating the reasons for such an act. If a worker is aggrieved by an order of termination he or she may proceed under Section 46 of the Industrial Relations Ordinance 2002, aimed at regulating the labor-management relations in the country, and bring his or her grievance to the attention of his or her employer, in writing, either him or herself, through the shop steward or through his or her trade union within three months of the occurrence of the cause of action. Forms of termination have been described as removed, retrenched, discharged or dismissed from service. To safeguard against any colorful exercise of power, victimization or unfair labor practices, the Labor Courts have been given powers to examine and intervene to find out whether there has been a violation of the principles of natural justice and whether any action by the employer was Bona Fide or unjust.

The IRO 2002 abolished the Labor Appellate Tribunal. Any party aggrieved by an award or a decision given or a sentence passed by the Labor Court may now submit an appeal to the High Court (Article 48 of the IRO 2002).

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Unfair Labor Practices

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