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Last updated on: July 29th, 2022
Labor Requirements
The Labour Law in Pakistan is regulated mainly by the Shops and Establishments Ordinance, 1969 and Factories Act, 1934. The Act governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, and employment conditions. The other acts that govern employment relationships are Maternity and Paternity Benefits Act 2020, Provincial Employees Social Security Ordinance, 1965 etc.
Application of Shops and Establishments Ordinance, 1969 – This Ordinance applies to employees working in shops, commercial, industrial and other establishments and regulates the law relating to working hours, and other employment related matters of employees working in such establishments.
Application of Factories Act, 1934 – This Act provides for working conditions such as hours of work, overtime and other matters of employment for employees working in factories.
Hours & Pay Regulations
Normal Working Hours
Under the Shops and Establishments Ordinance, an employee shall not be allowed to work in excess of 9 hours per day and 48 hours per week exclusive of overtime.
Day means the period of 24 hours beginning at midnight, provided that in the case of an employee, whose hours of work extend beyond midnight, day means the period of 24 hours beginning when such employment commences, irrespective of mid-night.
Week means a period of 7 days beginning at midnight on Saturday night.
Spread Over – The working hours inclusive of breaks for rest or meal shall not exceed 12 hours in a day and 60 hours per week.
Under Factories Act, 1934, an employee shall not be allowed to work for more than 8 hours per day, 10 hours in case of a seasonal factory (only by male employees) exclusive of overtime. The weekly working hour limit for employees 48 hours a week. In the case of seasonal employees, the weekly limit is increased to 50 hours (exclusive of overtime).
Day – means a period of twenty-four hours beginning at midnight.
However, if a factory is involved in work of continuous nature, an employee can be employed for up to a maximum of 56 hours weekly inclusive over time.
Spread Over – An employee’s daily work hours shall not exceed 12 hours in a day including overtime and rest intervals and in the case of seasonal factory employees’ the working hours shall not exceed 11.5 hours per day including overtime and rest intervals.
Restriction on double employment – An employee who has already been working in any factory, shall not be allowed to work in any other factory on the same day except in circumstances as may be prescribed by the authority. Shops and Commercial Establishments Act, 1969 § 7 – 8 and Factories Act, 1934 § 34.
Shift Work Restriction – The Provincial Government may make rules providing that in any specified class or classes of factories, work shall not be carried on by a system of shifts so arranged that more than one relay of employees are engaged in work for the same kind at the same time without the permission of government authorities.
Recording Requirements
Under the Shops and Establishments Ordinance, an employer shall maintain records and registers to furnish such information as may be prescribed by the government authority. Every employer shall maintain the following records and registers :
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- Register of employment and remuneration in Form IV.
- Register of leave-in Form V.
- Inspection Book in Form VI (for establishments excluding shops).
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Under Factories Act, an employer shall maintain a record of employees including the name of the employee, the nature of work assigned, and other particulars as may be prescribed by the regulations. Shops and Commercial Establishments Act, 1969 § 23 and Factories Act, 1934 § 41, Shops and Commercial Establishments Rule, 1969 §8.
Overtime
Under the Shops and Establishments Ordinance, an employee who works in excess of 9 hours per day and 48 hours per week is said to perform overtime work. An employee shall not perform more than 624 hours of work in a year in overtime.
Pay– Employees who work overtime are compensated at double the rate of ordinary wages. Factories Act, 1934 § 47 – 47A.
Under the Factories Act, an employee who works in a non-seasonal factory for more than 8 hours per day and 48 per week and in a seasonal factory for more than 8 hours per day and 50 hours per week is said to perform overtime work.
Pay – Such overtime work is compensated twice the ordinary rate of wages of an employee. Shops and Commercial Establishments Act, 1969 § 9
Night Work
Under Factories Act, an employee who works on a shift that extends over 12 am (midnight), in such a case, the hours of work performed by the employee after the midnight shall be considered as hours worked for the previous day and the day right after ending of such shift shall be considered as a period of 24 hours for the employee.
No woman shall be allowed to work in a factory except between 6 am and 7 am Women may be allowed to work up to 10:00 pm in two shifts per week with her consent if the employer arranges for the transport facilities.
However, the government authority may provide that the day right after such a shift (a shift extending over midnight) shall be considered as a period of 24 hours beginning when such shift begins in such a manner that the number of hours worked before midnight be counted towards the current day. Factories Act, 1934 § 46.
Breaks
Under Shop and Establishment Ordinance, an employee shall not be required or permitted to work continuously in any establishment for more than 6 hours, unless he has been allowed an unpaid interval for rest or meals of not less than 1 hour.
Under the Factories Act, the periods of work of employees in a factory during each day shall be fixed either –
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- so that no employee shall work for more than 6 hours before they have had an interval for rest of at least 1 hour; or
- so that no employee shall work for more than 5 hours before they have had an interval for rest of at least 30 minutes, or for more than 8.5 hours before he has had at least two 30 minutes breaks.
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Shops and Commercial Establishments Act, 1969 § 7, Factories Act, 1934 § 37.
Weekly Rest Day
Under the Shops and Establishments Ordinance, an employee is entitled to 1 day of rest each week, which is in addition to public holidays and other leaves. The day of rest will be chosen by the employer and informed to the authority within 2 months thereof.
An employee who is employed on daily wages shall be paid not less than their daily wages for the holiday, and where an employee is paid on piece-rate, they are entitled to the average of the wages received during the week for the holiday.
Under Factories Act, an employee is generally entitled to leave on Sunday. Employees shall be not allowed to work in a factory on a Sunday unless they had or will have a holiday for the whole day on one of the 3 days immediately before or after that Sunday. A notice regarding such requirements of an employee to work on Sunday shall be displayed in the factory. Such substituted holiday shall be arranged in such a manner that an employee does not work for more than 10 days consecutively without a holiday for a whole day.
An employee who works on a Sunday and had a holiday on one of the 3 days immediately before Sunday, such Sunday shall be considered as weekly hours of work for the preceding week.
Compensatory weekly rest – An employee who was not granted a weekly holiday, shall be entitled to compensatory holidays equivalent to the number of holidays lost. Shops and Commercial Establishments Act, 1969 § 6 and Factories Act, 1934 § 35
Public Holidays
Under Factories Act, an employee is entitled to all days declared by the government authority as paid festival holidays. Following is a list of general observed public holidays:
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- Kashmir Day, February 5
- Pakistan Day, March 23
- Labour Day, May 1
- Eidul Fitr (2 days)
- Eidul Azha (3 days)
- Independence Day, August 14
- Ashura holiday (2 days)
- Eid Miladun Nabi (SAW), October 19
- Quaid-e-Azam Day, December 25
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Compensation for working on a public/festival holiday – An employee may be required to work on a festival/public day on the condition that the employee will get an additional compensatory paid holiday and a substitute holiday.
Under the Shops and Establishments Ordinance, an employee is entitled to 10 days of paid festival holidays in a year. The days and dates for such holidays shall be notified by the employer in the beginning of the calendar year to employees.
Pay – The wage payable to employees for holiday is at a rate equal to the daily average amount earned by the employee during the 3 months preceding the holidays. Shops and Commercial Establishments Act, 1969 § 16 and Factories Act, 1934 § 49.
Annual Leave
Under the Shops and Establishments Ordinance, an employee who has been in continuous employment with the same employer for at least 12 months is entitled to 14 days of paid annual leave. For the purpose of calculation of continuous employment with the same employer, the period during which an employee was on casual/sick leave and festival holidays shall also be considered.
Accumulation of Vacation
For an employee who could not take leave either in part or whole in any period of 12 months, such leave is carried over to the next year and added to annual leave entitled to the employee in that year. If the total amount of leave due to an employee is 30 days, no further addition to leave is permitted. At the request of an employee, an employer may grant payment in lieu of vacation days not availed by the employee.
Pay – An employee is entitled to wages at a rate equal to the daily average amount earned by the employee during the 3 months preceding the vacation.
An employee who has been granted at least 4 days of leave shall be paid wages for the period of leave allowed before the leave begins.
Under Factories Act, an employee who has completed 12 months of continuous service in a factory is entitled to a holiday for a period of 14 consecutive days during the subsequent period of 12 months. This period is inclusive of weekly holidays which an employee is entitled to.
An employee unable to take the whole of the holidays in any one such period of 12 months is allowed to carry forward such leaves to the subsequent year on the condition that the number of holidays carried forward shall not exceed 14.
An employee shall be deemed to have completed a period of 12 months of continuous service in a factory notwithstanding any interruption in service during those 12 months brought about by sickness, accident, or authorized leave not exceeding 90 days in the aggregate for all three, or by a lock-out, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding 30 days in the aggregate; and authorized leave shall be deemed not to include any weekly holiday which occurs at beginning or end of an interruption brought about by the leave.
Pay – An employee is entitled to an amount equal to the average of the daily wages earned for the days on which the employee actually worked during the preceding 3 months, excluding the overtime pay. The employee shall be paid half of the total payment due to the employee for the holidays before the beginning of the holidays.
Termination of Employment
An employee whose employment is terminated before the employee could take holidays or was refused the employee holidays shall be paid an amount equivalent to the daily average wages earned by such an employee for the days actually worked by him/her in the preceding 3 months. Shops and Commercial Establishments Act, 1969 § 14 and Factories Act, 1934 § 49A – 49G.
Minimum Wage
Effective October, 2021, the minimum wage in Pakistan is 25,000 Pakistani Rupees per month. Though the minimum wage varies from province to province and ranges between 20,000 – 21,000 pakistan rupees per month.
Special Leave
Under the Shops and Establishments Ordinance, an employee is entitled to 8 days of paid sick leave every year. Such leave can be carried forward but the total accumulation shall not exceed 16 days at any one time.
Pay – An employee is entitled to wages at a rate equal to the daily average amount earned by the employee during the 3 months preceding the leave.
Under Factories Act, an employee is also entitled to sick leave for a period of 16 days on the employee’s half average pay in a year.
Shops and Commercial Establishments Act, 1969 § 49H and Factories Act, 1934 § 15.
Under the Shops and Establishments Ordinance, an employee is entitled to 10 days of paid casual leave in a calendar year. This leave shall not be granted for more than 3 days at a time and cannot be accumulated.
Pay – An employee is entitled to wages at a rate equal to the daily average amount earned by the employee during the 3 months preceding the leave.
Under Factories Act, an employee is entitled to paid casual leave for a period of 10 days in a year on their full pay. An employee is also entitled to sick leave for a period of 16 days on the half average pay in a year. Shops and Commercial Establishments Act, 1969 § 49H and Factories Act, 1934 § 15.
A female employee is entitled to paid maternity leave for a period of 180 days for the birth of the first child, 120 days for the second child, and 90 days for the third child from the date of commencement of leave. Unpaid leave can be granted for additional children depending upon the agreement between the employee and employer. Maternity and Paternity Benefits Act, 2020 § 3.
A male employee is entitled to 30 days of paid leave for the birth of his child from the date of commencement of leave. The leave is available for fathers a maximum of 3 times during the entire service. Unpaid leave can be granted for additional children depending upon the agreement between the employee and employer. Maternity and Paternity Benefits Act, 2020 § 4.
