Understanding Pakistan’s Labour Law And Employment Regulations

Introduction of Pakistan’s Labour Law


There are 16 employment laws in Pakistan on which compliance is mandatory and apply to organizations, commercial establishments, industrial establishments, and factories.


  • Employee’s Old Age Benefits Act, 1976
  • Provincial Employees Social Security Ordinance (PESS), 1965
  • The Industrial And Commercial Employment Ordinance (Standing Orders), 1968
  • Punjab Shops And Establishments Ordinance (The Ordinance), 1969
  • Workers Children (Education) Ordinance, 1972
  • Minimum Wages Ordinance, 1961
  • Payment Of Wages Act, 1936
  • Companies Profits (Workers Participation) Act, 1968
  • The Factories Act of 1934
  • Workmen’s Compensation Act, 1923
  • West Pakistan Maternity Benefit Ordinance, 1962
  • Apprenticeship Ordinance, 1962
  • Disabled Persons (Employment And Rehabilitation) Ordinance, 1981
  • Workers’ Welfare Fund Ordinance (WWF Ordinance), 1971
  • Punjab Industrial Relations Act, 2010
  • Industrial Relations Act, 2012


Statutory Contributions


Qualifying conditions:

  • Industrial and Commercial Establishments (Standing Orders) Ordinance 1968 (or any of its variants) applies to that establishment.

(whether commercial or industrial), i.e., it must have the minimum number of workers as mentioned above.

  • A person has to be a workman as defined in Standing Orders Ordinance 1968. A workman is “any person employed in any industrial or commercial establishment to do any skilled or unskilled, manual or clerical work for hire or reward.”
  • They must be a permanent workman. If a worker is a temporary, badly probationer, or a contract worker, they are not eligible for gratuity under the law.
  • The minimum qualifying employment period is twelve months or above. However, if a worker has worked over six months in a specific year, he will be entitled to a gratuity of one year. Thus, compensation is essentially payable for more than six months of employment.


Qualifying events:

  • He resigns from his service (voluntary retirement or redundancy in exchange for financial benefits like golden handshake schemes).
  • His organization terminate his services due to reasons other than misconduct.
  • He dies while in service of his employer (the employee doesn’t need to be on duty at the time of death).
  • He reaches the superannuation age and retires.


About BIPO


Founded in 2004, BIPO is a leading one-stop global HR and Payroll service provider with a vast network of offices in 23 cities across the Asia Pacific, the Americas, Europe, the Middle East & Africa, supported by four R&D Centres in Singapore, Mainland China, Indonesia, and Malaysia. Our APAC Headquarters in Singapore serves as our hub for the region.

About BIPO

Established in 2010 and headquartered in Singapore, BIPO is a global payroll and people solutions provider. Designed for businesses of any size from SMEs to MNCs, our total HR solutions include Human Capital Management solutions, Global Payroll Outsourcing, and Employer of Record service across 160+ global markets.

Subscribe to our newsletter

This field is for validation purposes and should be left unchanged.

Find out more?

Explore our award-winning platform

One-all-one HR global platform with integrated features to manage your business.

Privacy Consent*
This field is for validation purposes and should be left unchanged.