Labour Policy


This labour policy was announced in 1955 by the then labour Minister Mr. Noorul Haq Choudry but it was formulated by Dr. A.M. Malik, former Federal Labour Minister. This Labour Policy remembered as paternalistic in character. The following were the main objectives of this policy:
  • The growth of genuine and healthy trade unionisms
  • Settlement of disputes through the process of joint consultation, mediation, conciliation and arbitration.
  • Protection of just rights of workers
  • Maintenance of industrial peace and harmony in labour management relations.
  • Speedy settlement of industrial disputes through adjudication, where necessary, and effective implementation of awards; and
  • Welfare of workers and avoidance of their victimization and exploitation.
No significant change was made in any of the laws as a result of the above policy except for a few amendments in the Industrial Disputes Act, 1947. One of these amendments provided speedy remedy to workers and office bearers of trade unions for the redress of grievances arising out of dismissal and other punishments awarded during the pend ency of conciliation and adjudication proceedings in connection with settlement of an industrial dispute. Another amendment made in the Act placed restrictions on recourse to strikes and lock-outs during the course of conciliation and adjudication proceedings. There was no complete restriction on strikes and lock-outs but recourse there-to was prohibited during the pendency of conciliation and adjudication proceedings in respect of industrial disputes. Almost all the enactments adopted at the time of partition continued in force.


The second Labour policy was announced in 1959 in the regime of Field Marshal Ayub Khan by Lt. General Burkey the then Labour Minister. This labour policy is remembered as bureaucratic and legalistic in nature. This labour policy introduced unfair labour practices for employees and employers something on the lines of American laws. It introduced a system of collective bargaining Agent again from the same law. Another far-reaching step was taken under this policy that labour as a subject was slowly taken away.

The labour policy of 1959 had culminated, though with limited scope, in the promulgation of important labour legislation viz:
  1. a) The Road Transport Workers Ordinance, 1961
  2. b) The Provincial Employees Social Security Ordinance, 1965
  3. c) The West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1960 and as well as 1968.
  4. d) The West Pakistan Industrial Dispute Ordinance, 1959 and 1968.
  5. e) The West Pakistan Trade Union Ordinance, 1968
  6. f) The Companies Profits (Workers Participation) Act, 1968 etc.
This legislation coupled with unprecedented industrial growth put the country on a track to development.
The guiding principles/objectives of that policy were:
  • Implementation of ILO’s conventions and recommendations as ratified by the Government.
  • Promotion of healthy trade unionism.
  • Promotion of sound employer's employee's relations as prerequisite of increased productivity
  • Promotion of settlement of industrial disputes through constitutional means and avoidance of agitations and tensions
  • Provision of social amenities which were defined and include requirements of health, education, recreation, housing, wages and other needs in relation to work.
  • Suitable measures for reducing unemployment; and
  • Creation of employment agencies and formation of employment programs information without charging any fee.
As a result of the above policy the Industrial Disputes Act, 1947 was repealed and was replaced by another piece of legislation, namely, the Industrial Dispute Ordinance 1959. The new legislation introduced some fundamental changes in the sphere of labour-management relations. It was based mainly on the assumption that all conflicts inherent in the labour-management relations could be resolved through the process of adjudication alone. Consequently it placed complete ban on resort to strikes and lockouts. It was made incumbent on the parties to get their disputes settled through the process of adjudication if at all they desired a settlement thereof after failure of conciliation proceedings.

The Trade Unions Act, 1926 was amended to provide for the recognition of a trade union by the employer for the purpose of collective bargaining. At the same time the concept of unfair labour practice was introduced through an amendment in the Trade Union Act, 1926. Its main object was to protect trade unions from the domination and interference of the employers and to ensure that the workers establish and join trade unions of their own choice.

The Industrial Employment (Standing Orders) Act, 1946 was also repealed and replaced by the Industrial and Commercial Employment (Standing Orders) Ordinance, 1960. Under the repealed Act the employers had the right to make their own Standing Orders embodying certain minimum terms and conditions of service of workers employed in their establishments. Such standing orders had to be as far as possible, in conformity with the model of the Standing Order prescribed in the schedule to the said Acts and could come into force only if they were certified by the Inspector in the prescribed manner. Under the new Ordinance the Standing Orders were incorporated in the schedule to the Ordinance and were made applicable as they were to all industrial and commercial establishments as defined therein. The standing orders contained in the schedule to the said ordinance could not be modified except through a collective agreement. In this way the new Legislation introduced certain uniform standards of the terms and conditions of service for workers employed in the industrial and commercial establishments.

As may be seen the main emphasis in the frame-work evolved under the second labour policy was on the application of legal measures and adjudication, considered to be the panacea of all ills inherent in the labour-management relations. There was very little scope for bilateralism and volunteerism specially in the sphere of labour-management relations. The right of collective bargaining was a mere force as the parties had no right of strike or lockout. The same features of the policy were reflected in the West Pakistan Industrial Dispute Ordinance 1968, the East Pakistan Industrial Dispute Act 1965 and the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. The result was that trade unions became so ineffective that they could hardly be looked upon as a source of strength or inspiration by the workers. This not only hindered the development of a strong and healthy trade union movement in the country but also proved catastrophic for the entire industrial life. Strikes and lockouts are the normal features of industrial life but the frequency with which they occurred during early 1969, the awe and violence with which they were accompanied and above all the invention of the device of “Gherao” could be attributed mainly to the absence of a strong and health trade union movement in the country.


The third labour policy was declared in 1969 by Air Marshal Noor Khan in the regime of General Yahya Khan. This policy is remembered to have been framed with the pious concept of Bilateralism (Bilateral – Industrial Relations). Through this policy the industrial ordinance, 1969 was promulgated. Parties were allowed to bring economic sanctions against each other i.e. strikes or lock-out and for first 30 days government could not interfere in their disputes unless the parties so desired to go to adjudication.
The idea was that workers and employers have become mature enough now to realize their responsibilities and they will refrain from misusing their liberty of restoring to 30 days of strike or lock-out unfortunately the experience was otherwise. Industry suffered very badly due to these opportunities of freedom for ”suicide”.

Under this policy some very useful work of amendments of Factories Act, 1934 and other labour laws were taken care.
This policy thus resulted in the strengthening of labour inspectorate with the promulgation of the following labour laws:
  • The Industrial Relations Ordinance, 1969
  • The West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969.
  • The Workers Welfare Fund Ordinance, 1971.
  • These drastic measures set out new trends for the labour based on freedom of association, collective bargaining, fixation of minimum wage and labour welfare. The following are some of the main features of that policy.
  • Sound measures to encourage growth of trade unions – the introduction of the concept of collective bargaining agent.
  • Mechanism for settlement of industrial disputes.
  • Strengthening the scope of collective bargaining by conferring right of strikes on workers and the right of lockout on employers.
  • Extension of the principle of collective bargaining to public sector workers.
  • Fixation of minimum wages for workers in different areas of the country.
  • Institutional arrangement for minimum wages board and
  • Establishment of workers welfare fund for the construction of their house.

The fourth labour policy was declared in 1972 by Mr. Z.A. Bhutto. This policy has the concept of participative objectives between management and workers. In deciding the role of workers in an enterprise the crucial assumption in this type of philosophy is that there is an existence of common interest. The production is a joint affair and the cooperation, consultation and creative participation are to be expected at all levels of the establishment. Accordingly the law explicitly stresses common purpose and corresponding obligations of both the management and the workers.

The labour policy, 1972 by Mr. Z.A. Bhutto was for increased labour reforms, including new infrastructure that was set up for administration of new laws, viz Workers Welfare Fund Ordinance, 1971, Employees Old Age Benefit Act, 1976, Industrial Relations Ordinance, 1969 with enhanced protection of workers rights like imposing condition on the authority of employer to terminate workers simpliceter. The scope of labour laws was enhanced and benefits like increased profit sharing, statutory bonus, group insurance scheme, group incentive scheme, etc. were granted. This policy was bitterly criticized by entrepreneurs who started lodging complaints with the government about indiscipline and low productivity of labour and militant trade union activities.

The fourth labour policy was announced by the Government on February 10, 1972 which was further amended in the year 1975. This was in fact an extension of the third policy as there was no change in the basic theme of that policy.
  • The main features of this policy were:
  • Workers participation in management at the factory level.
  • The right of Collective Bargaining Agent to appoint auditors for auditing the accounts of the company.
  • Increase in the rate of workers shares in companies profit from 2% to 4% and later to 5%
  • Procedure for the redress of individual grievances.
  • Empowering the Labour Courts to go into all the facts of the case while adjudicating and determining an individual grievance including a grievance arising out of dismissal.
  • Introduction of pension scheme for the workers.
  • Settlement of disputes at the works council level.
  • Curtailment of the period of strike/lock-out notice from 21 to 14 days.
  • Statement of reason for termination of services for any reason whatsoever.
  • Statutory bonus upto one month’s pay in the event of profit.
  • Application of certain laws to contractor’s workers.
  • Nomination of workers representative on the governing body of workers welfare fund.
  • Payment of entire contribution to pension and social security institution by the employer.
  • Group insurance scheme for workers.
  • Making safety measures more effective.
  • Introduction of group incentive scheme.
  • Amendment of the definition of industrial dispute taking out the enforcement of a right guaranteed by law, award or settlement to a worker from the ambit of the definition of industrial dispute.
  • Enhancement in the scope of unfair labour practices and its punishment.
  • Establishment of NIRC and determination of its role.
  • Establishment of wage commission for Banks.

Labour Policy, 2002 is the 5th one that has been approved on September 21 by the Federal Cabinet. The concept behind this labour policy is to strengthen the bilateral ism. It focuses on dignity of labour, elimination of animosity and antagonism by fostering a trust-relationship between employer – employee and promoting social dialogue. The present government is firmly of the view that both industrial growth and decent working conditions can be achieved only through peace and tranquility in the industrial sector. This is only possible if there is an awareness and understanding between workers and employers of their reciprocal rights and obligations with all round commitment to higher productivity. This labour policy will provide a strong base for future industrial growth in the environment of good employer – employee relationship through the strategy of interdependence by employers and employees and their mutual trust. The text of the labour policy, 2002 that follows consists of two parts, part-I: Principles, Aims and Objectives, and part-II: Action Plan. The principles, objectives and action program of the policy concentrate on the creation of relationship of trust and cooperation between employer and employee under the strategy of least intervention by the state. A visionary approach adopted in labour policy is a focus on dignity of labour, fair balance of bargaining power and productivity based work culture with fair and equitable distribution of gains and proceeds of the industry amongst employees, entrepreneurs and the society at large.
  • This policy is thus based on the following approaches:
  • Strengthening bilateralism with least legislative and state intervention;
  • Empowered labour courts to order re-instatement of illegally dismissed workers or award reasonable compensation in lieu of re-instatement.
  • Integration of the system of labour courts with High Courts in appeal matters, which will help not only dispensation of justice more to the satisfaction of the parties but also help persistent development of law by judiciary.
  • Creation of climate to allow room for emergence of internal trade unions leadership while retaining the room for outsiders as at present. It will continue maintaining the sanctity of ILO Convention, 1987 ratified by Pakistan, permitting workers to freely a let their representatives.
  • Improvement of institutions responsible for administration of labour laws and allied disciples; promotion of labour welfare by the employers through development of trust relationship with workers; Gradual and systematic consolidation and rationalization of labour laws to meet present-day and future needs of the industry.
  • Extension and up gradation of vocational and industrial training program to meet the changes of globalization and avoidance of unnecessary redundancies.
  • The Labour Policy 2002 will provide a strong base for future industrial growth in the environment of good employer-employee relationship through the strategy of inter dependence by employers and employees and their mutual trust.

Since creation of Pakistan, five labour polices have been announced bythe governments in the year 1955, 1959, 1969, 1972 and 2002. All thesepolices basically laid-down the parameters for the growth of trade unionismthe protection of workers’ rights; the settlement of industrial disputes addressable of worker grievances. After 2002, no Labour Policy has beenintroduced although a number of developments took place in the intervening period, which would have necessitated the same. In this scenario
The Prime Minister of Pakistan in his first speech emphasized the need to address thelabour issues and announced the lifting of ban on trade unionism, repeal ofIndustrial Relations Ordinance, 2002, Removal from Service (Special Powers)Ordinance, 2000 and other anti labour laws. In pursuance of Prime Minister’sdirections a new Labour Policy of the Government is placed.Of all the previous policies, the Labour Policy of 1972 taken out by Shaheed Zulfiqar Ali Bhutto was the most progressive one, which reformed the labour laws and set out new benchmarks including new administrative infrastructure to manage the workers’ welfare, viz Workers Welfare Fund Ordinance; Employees Old-Age Benefit Act; amended Industrial Relations Ordinance with enhanced protection of workers’ rights like imposing condition on the authority of employer to terminate workers job. The scope of labour laws was enhanced and benefits such as Workers’ participation in factory management; increase in workers shares in company’s profits from 2% to 4% and then to 5%; Nomination/election of shop-stewards to attend day to day workers’ problems; Settlement of disputes through Works Councils Establishment of Workers Children Education Cess; Representation of workers on the Governing Body established under Workers Welfare Fund Ordinance; and increased profit-sharing, statutory bonus, group insurance scheme, group incentive scheme, etc. were granted.

The present Government’s fundamental commitment today is to create an enabling environment for the application of universal principles of equality and social justice as well as the constitutional and international rights of workers. The rights and commitment based approach to labour issues is being followed also in accordance with the edicts provided by the Constitution of the Islamic Republic of Pakistan. In order to fulfill the obligations under the Constitution as well as under the international covenants with regard to well being and socio-economic protection of the workers, the announcement of the New policy of the Government has become inevitable.

The Government’s vision for the new Labour Policy contents are entrenched in the four main guiding features. The process of globalization is posing a serious problem of economic survival for the developing country.

The foreign investments demand restructuring and decentralization of the system. the new technologies demand the new labour policy is supported by the four pillars outlined in therein.the new technologies demand a high level of professional competence along with specialized skills. Considering the changes requirements of the time, it was imperative re-establishing technical training and human resource development programmes to train manpower in multiple trades. The new labour policy proposes to restructure training activities in order to meet the demand of new technologies.

To have a fruitful consultation with the stakeholder, Pakistan Tripartite Labour Conference under the Chairmanship of the Prime Minister was held on 16th February, 2009 after about eight years, which culminated in useful recommendations for legislative, institutional and administrative reforms to meet the emerging challenges of the time. These recommendations were further discussed in Provincial Tripartite Committees, and all these recommendations are the basis of this new labour policy. The objective before.

The government is that the new Labour Policy should ensure a harmonious working relationship between workers and employers for improving performance and efficiency of the industry. The text of the Labour Policy that
follows consists of four parts, Part-I: Legal Frame Work; Part-II: Advocacy: Rights of Workers and Employers; Part III Skill Development and Employment; and Manpower Export.

In the end, I extend on behalf of the Government of Pakistan, my thanks to the Secretary Ministry of Labour & Manpower and his team for their hard work and dedication in finalizing the draft of the labour policy, which was overdue for the past eight years. I also pay special tribute to Workers and Employers Organizations, Ministries, Provincial Governments and all other stakeholders for their contributions and useful suggestions towards the realization of this labour policy.

Syed Khursheed Shah
Federal Minister for Labour and  Manpower
May 01, 2010


Social and economic well-being of the people is one of the principal objectives of the present people’s government. Labour Policy, like policies in other fields, should also aim in attaining the objectives in a manner best suited to the resources of the country and the present state of economy. There is an urgent need to revitalize the economy, required sustained efforts, to increase the level of productivity, promotion of investment and maximization of employment. There is an equally genuine requirement to create among workers and employers, a better awareness of their obligations to the national objectives stated above. At the same time, the Government recognizes that workers and employers must enjoy reasonable benefits as can be sustained by the economy without suffering set-backs. Keeping these priorities in view, the Government considers that a balanced labour policy should be based on the following
  • Workers’ right to form unions and unions should be protected and an Institutional framework be made available to foster close cooperation between workers and employers at establishment level.
  • Equitable adjustment of rights between workers and employers should be ensured in an atmosphere of harmony, mutually beneficial to the Workers and the management.
  • Consultations between workers and employers on matters of interest to The establishment and welfare of workers should be made more effective.
  • Adequate security of jobs should be available to the workers and there Should be expeditious redressal of their grievances.
  • Conditions should be created that workers and employers are committed in enhancing the labour productivity.
  • Promotion to higher jobs be ensured at all levels based on suitability and merit and for this purpose arrangements should be made for inservice training facilities.
  • Facilities for proper matching of job opportunities and the job seekers be strengthened and standard procedures be streamlined.
  • Social insurance schemes to be further strengthened.
  • Just and humane conditions of work be guaranteed to all workers.
  • Forced labour in all its forms to be eliminated.
  • Provisions relating to the employment of children to be strictly adhered to and be enforced.
  1. The Labour Policy has accordingly been divided into four parts, i.e.
  • Legal Frame Work;
  • Advocacy: Rights of Workers and Employers;
  • Skill Development and Employment;
  • Manpower Export.
Legal Frame Work
  1. The Government is of the considered view that an atmosphere of industrial peace and understanding is the need of the hour. The Government would encourage and assist the process with volition of both workers and employers. It will protect legitimate rights and interests of workers and employers and minimize the areas of friction which compel either of them to agitate. The question of unwilling and reluctant workers has, however, remained a source of concern equally for the Government, employers and trade unions’ leadership.
The Government is Committed for the Welfare and Protection of Workers:
  1. The unions having the support of sizeable number of members shall be, recognized, given due protection, and provided all facilities to further the interests of their members. Only those unions shall be recognized who to their credit have the support, of a minimum of 15 per cent of total membership of the establishment, which they represent. The rest of the unions by default shall stand dissolved.
  2. The institutions of Shop Stewards, Work Councils and Joint  Management Boards which have up till now remained dormant, shall be encouraged and re-activated for their rightful participation in improving labour management relations at plant level.
  3. The Government repealed the Industrial Relation Ordinance 2002 through the Industrial Relations Act 2008. Now a new law in conformity with the International labour Standards will be promulgated. Section 27B of the Banking Company Ordinance shall be repealed. Rationalization and Consolidation of Labour Laws.
  4. The Labour Laws are quite complex, over-lapping, anomalous, and at times render the subject matter difficult to understand, besides creating confusion for those who deal with them. Further, the penalties prescribed for offences and non-compliance are very low, since some of these laws were framed during pre-independence period. The Labour Laws will be consolidated and rationalized into five core laws, viz;
  1. Laws relating to industrial relations.
  2. Laws relating to employment and service conditions.
  3. Laws relating to occupational safety and health.
  4. Laws relating to human resource development.
  5. Laws relating to labour welfare and social security.
Universal/Voluntary Coverage
  1. A comprehensive Social Insurance for old-age benefits and health services will be introduced on self-registration/voluntary basis to allow all workers in formal and informal sector of economy, including self employed persons, to benefit from it. Issuance of Smart Cards
  2. The registration of workers will be linked with the Smart Cards being issued by NADRA. All particulars of the workers with respect to name, employment history, education, skills will be placed on the Chip of the Smart Card. This card will also serve the purpose of registration under Social Security, EOBI and workers Welfare Fund and will be a source of Data Bank of labour force for re-skilling of workforce with respect to enhancement of employment within the country and overseas.
  1. The Government is committed to implement the system of minimum wage as a fundamental element of labour protection, and proposes to continue with the existing tripartite minimum wage determination arrangements. An independent National Wage Commission will be set up and the government will establish a Working Group to make detailed recommendations for the purpose of specific functions and operational arrangements for such a Commission, including its technical and secretarial support requirements and its relations with provincial wage fixing authorities.

    11. The deliberations of the Working Group will involve close cooperation with workers’ and employers’ organizations, and will result in the preparation of a detailed policy paper for the development and implementation of national wage policy, including minimum wages, in the medium to longer term.
  2. In line with Manifesto of the Pakistan Peoples Party the Government shall gradually enhance wages of the workers. The wages shall continue to be reviewed at least once in a year and minimum gross emoluments will be progressively raised.
  3. The minimum wage was raised from Rs. 4600/- to Rs. 6000/- in the year 2008, which will be further enhanced to Rs.7000/- there are increase of about 17%.
  4. All industrial, commercial and other establishments registered under any law shall pay wages to the employees through Cheque/Bank transfer.
Women Empowerment And Gender Equality
  1. International Labor Organization’s project Women Employment Concerns and Working Condition in Pakistan (WEC-PK) funded by CIDA has been Implemented in collaboration of Ministry of Labour and Manpower to enhance the quality and number of women employment in Pakistan with ultimate goal of economic empowerment of women in rural and urban areas. A number of productive programs have been completed under this project aimed at creating conducive working environment for women such as Sensitization and capacity building of policy makers and implementing partners in public and private sectors; Direct Assistance to Women in getting Decent Employment; Promoting Gender Equality in Private Sector Employment in Pakistan; and promoting Women's participation and Leadership in Trade Unions in Pakistan
  2. Another project titled “Towards Gender Parity” was initiated in January 2010 in collaboration of Ministry of Labour for the period of one year. The focus of the project activities would be on capacity building of stake holders on relevant areas and International Labour Standards (ILS); Establishment of coordination mechanism among partners to monitor, learn and share experience; Promotion of gender- responsive data collection, analysis and reporting through a joint effort of all stake holders; strategy for gender equality in skill development and small and medium enterprise program; strategy for implementation of Women Empowerment Act; Advocacy for the implementation of national policy of Home-based Workers and pilot activities for integration of HBWs into main stream.

    Women Workers

  3. Women workers will benefit from the application of ILO Convention on Equal Remuneration, 1951 (No. 100), ratified by Pakistan in 2001. Minimum and above-minimum wages will be ensured on the basis of equal pay for equal work, and equal pay for work of equal value, as between men and women, in accordance with Pakistan’s obligations under ILO Conventions 100 and 111 concerned with equality and non-discrimination respectively.
  4. Women will also benefit from better information concerning their working conditions and arrangements in the informal economy, from improved maternity arrangements, codes of conduct relating to sexual harassment and,
    where possible, day care arrangements for their children.
  5. The Government is committed to providing women with equal opportunities for employment and will re-examine existing legislation to ensure that women are not denied access to suitable jobs that are arising due to Pakistan’s changing labour markets.
Young Persons
  1. Workers between the ages of 14 and less than 18 years will not be engaged in hazardous working conditions and other working environments that adversely affect their physical and moral development. They will also be provided greater access to education and training, particularly training, tailored to identified labour market needs.
  2. Children and young persons will be withdrawn and prevented from hazardous nature as, for example, mining, tanneries, brick kilns, construction, and glass bangles etc. Special programmes will be designed to focus young domestic workers employed in private households. Payment of minimum wage will also be ensured to the young persons.
Mine Workers:
  1. The majority of workers in Pakistan’s mining industry are employed on a contract basis, often through a somewhat complicated system of subcontracting making it difficult to identify the actual employer. Mine workers are covered by special legislation that place them outside mainstream labour legislation.

    23. Mine workers, whether contract or permanent, will be provided with
    same protection as other workers. They will benefit from minimum wage
    payments, access to social security and improved safety and health in their
Eradication of Bonded Labour
  1. The Government shall abolish bonded labour in all its forms and shall make appropriate amendments in law to make it more stringent, strictly implemented and safeguard the interest of workers who have hither to remained under forced labour.
Construction Labour
  1. Construction industry is the back-bone of all the development activities and is estimated to employ more than two million workers. Since the sector is witnessing rapid expansion, health, safety and occupational hazards in this industry are likely to pose new challenges and problems. In order to guard against occupational hazards and to provide safe working conditions for those employed in this vital sector of the economy, the Government shall enact suitable legislation to ensure health and safety of construction workers and to provide benefits available to other formal sector workers such as Workmen’s Compensation, Social Security, Old-age Pension etc.
Contractual Employees
  1. The Government has already started the process to regularize/confirm contract employees. All contract employees in public sector will be regularized/confirmed within shortest possible time.
Child Labour
  1. The Government shall take legal as well as other measures to regulate and control the employment of children in certain occupations and processes considered hazardous and injurious to their health.
Agriculture Labour
  1. The agriculture sector is being rapidly mechanized and requires technical skill. Resultantly, the unskilled workers of this sector are becoming unemployed. Moreover the labour laws are not applicable to this sector, therefore, the agriculture labour force remain deprived of the benefits available under various welfare legislations to their counterparts in the industrial establishments.The Government, in the first instance, proposes to extend the coverage of Workmen’s Compensation Act, 1923, to provide compensation in case of injury as well as death to workers of mechanized farms in the rural sector.
    Informal Economy Workers.
  2. Extending labour protection to the country’s large and diverse informal economy is a major challenge. The informal economy supports millions of people across a large geographic area, undertaking a wide variety of low-paid, low-productivity jobs, under working conditions that are frequently harsh, unhealthy, and hazardous. Informal economy workers are not covered by labour laws. Government is planning to make it mandatory for the labour administration to take the initiative to see how it can best reach out to such workers and provide them with basic protection through the provision of advisory services, based on a ‘labour extension’ approach.
  3. Workers in the informal economy, including home workers and domestic workers, will benefit from improved safety and health arrangements, access to social security arrangements, and the payment of minimum wages, where an employee- employer relation is evident. The employment of children less than 14 years will be eliminated, and the employment of those between the ages of 14 and less than 18 years will be strictly controlled, through a combination of stronger legislation and the introduction of labour extension services.
Health and Safety
  1. A Tripartite Council on Health and Safety be set-up to identify health and safety hazards for workers of all economic sectors and to make recommendations for safety measures on a continuous basis. Pakistan Tripartite Labour Conference and
Standing Labour Committees
  1. Industrial peace is a pre-requisite for economic development and social progress of any country. The necessity of enlightened and constructive outlook on the part of both workers and employers, which will promote understanding and, obviate confrontation is, therefore, essential. The Pakistan Tripartite Labour Conference and Standing Labour Committee shall be activated to play more effective role in resolving differences, if any, between workers and employers and to create an environment of mutual trust and understanding for the promotion of industrial peace. With a view to draw the maximum benefit out of the experience of both the workers and the employers, greater representation shall be given to their nominees while framing new social and economic policies of the country, particularly at the time of the framing of budget and Five Year Plans.
  2. Tripartite Monitoring Committees will be set up at District, Province and Federal level to monitor implementation of Labour Laws, particularly with reference to payment of wages, working environment and working time.
    Expansion in Scope of Workers’ Welfare Fund:
  3. The scope of Workers’ Welfare Fund Ordinance, 1971 will be extended; e.g.
  4. i) Labour Colonies will be established by developing 100,000 houses for allotment to the workers.
  5. ii) To encourage the private sector for providing housing facilities to the workers, the cost of construction of houses for the workers shall be considered as direct deduction against income as an admissible expenditure in the year in which such costs are incurred by establishments constructing houses for their employees.
iii) Community buildings i.e. mosques, schools, dispensaries, community centers, shops and parks will be provided in labour colonies to make them self-sufficient.
  1. iv) Scholarships will be awarded to workers’ children for higher studies e.g Ph.d, FRCS, etc and to study abroad also.
  2. v) Marriage grant for female workers and daughters of the workers will be without any balloting and without any restriction on number @ Rs, 70,000/- per female worker/daughter.
  3. vi) Two medical colleges will be established for children of workers at Karachi and Lahore. In these colleges 60% admissions will be given to the children of workers and 40% to the general public.
vii) All workers registered under the universal registration scheme of the EOBI will be eligible to get benefits from the WWF.
viii) On request of an officer of the registered trade union, and subject to recommendation of the Monitoring Committee, any dismissed/retrenched worker will be paid legal aid subject to maximum of Rs.15000/-.

Social Security
  1. Provincial Employees’ Social Security Ordinance, 1965 is inoperation and covers the contingencies of employment injury, sickness and maternity. It is financed entirely through employers’ contribution at the rate of percent of the wages of the secured workers up to Rs. 10,000/- p.m. The scheme is administered by the Provincial Governments.
  2. Though the Social Security Scheme has been in operation for many years, it has not achieved its full potential. Its coverage has remained almost static over the last more than ten years. Implementation of the scheme would be improved and intensified by undertaking the following activities:
  3. i) Steps would be taken to adopt geographical coverage rather than by notification of establishments.
  4. ii) The amount of death grant to meet funeral expenses of a worker will be raised from Rs.1500 to Rs.15000.
          iii) Scope of social security medical services would be expanded to public health to cover prevention of illness and promotion
          of good health.
  1. iv) The entitlement condition for seasonal labour would be considerably improved.
  2. v) In cases where the social security hospital has no facilities for treatment, the worker shall be referred to any public/private hospital and the respective Social Security Institution will bear all costs of treatment.
  3. vi) The retired registered worker will be provided medical facilities from the Social Security Scheme.
vii) The Social Security Ordinance will be suitably amended to remove the lacunas and difficulties experienced by the Provincial Governments.

Employees’ Old-Age Benefits Scheme
  1. The scheme is operated under the Employees’ Old-Age Benefits Act, 1976 and covers establishments employing 5 or more persons. All the employees irrespective of their wage are covered under the scheme. However, contributions by employers and benefits to the workers are payable on minimum rate of wages notified under the Minimum Wages for Unskilled Workers Ordinance, 1962. The scheme is financed through employers’ contribution at the rate of 5 percent of the minimum wages and insured persons contribution at the rate of 1 percent of the minimum wages. The scheme provides Old-Age Pension, Invalidity Pensions, and Survivors Pension (minimum Rs. 2000/- p.m.) and Old- Age Grant. It is a federally administered scheme. This scheme has also not achieved its full potential in terms of coverage of eligible establishments and employees.
  2. An in-depth review of the scheme would be made and effective measures would be adopted to achieve the following objectives:-
  3. i) Measures would be taken to gradually expand the coverage, including self employed persons and increase the benefits under the EOB Scheme.
    ii) All eligible establishments and employees would be registered and evasions would be checked through vigorous and efficient administration of the law.
    iii) The Act will be made applicable to the contingent/project employees of such statutory bodies which are otherwise exempted under the provisions of the Act.
  4. iv) Collection of contributions and recovery of arrears would be fully ensured through proper decentralization, regular inspection and continuous vigilance.
    v) Maintenance of accurate and up-to-date records of registration of employers, employees and contributions and benefit management system would be ensured on computerized basis.
    vi) The survivors of a registered insured person under the EOB Act will be paid Survivors Pension without any condition of minimum insurable employment.
    vii) The survivor pension shall be paid to disabled children for life and unmarried daughters till their marriage without any reference to the age.
    viii) Pension shall be enhanced with the enhancement of Government Servants Pension at the same ratio.
    ix) The age for entitlement of old-age pension will be reduced from 55 years to 50 years in case of mine workers.
    x) Amendments be made in the law to remove any lacuna or administrative problem.
Advocacy;  Rights of workers and employers: decent work
  1. The Labour Policy envisages a harmonious working relationship between workers and employers for improving the performance and efficiency of the industry. The rights and obligations based approach to labour issues is being followed also in accordance with the Constitution of the Islamic Republic of Pakistan. In order to fulfill obligation under the Constitution as well as under international covenants with regard to well being and socio-economic protection of the workers, a strategy has to be evolved and pursued in accordance with the concept of decent work in the employment sector.
  2. The economic growth is a pre-condition for expanding productive employment. But economic growth in itself could not reduce poverty. Only productive and remunerative employment could eliminate poverty and deprivation. Pakistan has ratified many international commitments relating to labour standards such as 34 ILO Conventions (33 in force) which include seven of the eight fundamental conventions encompassing freedom of association, the abolition of forced labour, equality at work, the elimination of child labour, the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination Against Women, Universal Declaration of Human Rights, International Covenant on Economic, Social and Cultural Rights , International Covenant on Civil and Political Rights and Anti-Slavery Convention of the UN. The Government believes that in the light of its international commitments the strategic goal of decent work means paying equal attention to economic and social development, with special attention to safeguarding the rights and interests of the workers. The economic globalization offers new opportunities, but at the same time it presents challenges to workers all over the world. The decent work strategy responses to the social challenge. The decent work strategy of the country comprises four elements that are closely related:
    • opportunities for productive, remunerative and safe work;
    • social protection;
    • respect for workers’ basic rights and interests; and
    • Social dialogue.
  3. The preliminary focus for the decent work strategy at present is employment promotion and further improvement of the social security system. Experience has shown that rapid economic development and technological progress do not automatically lead to more employment opportunities; however, individuals depend on employment opportunities to earn a living and meet their basic needs. The Government will insure full adherence of labour laws and workers friendly environment in all establishments to promote decent work in the country.
Skill Development and Employment

42. The main elements of Human Resource Development and Employment strategy are outlined below:-
i) In the absence of determined measures to bring down the rate of population increase efforts to enhance employment generation are expected to produce limited success.
ii) Given the need to create 1.25 million man years of additional employment annually and recent declining employment elasticity, the growth rate of the economy need to centre around a minimum of 8.3 percent per annum.
iii) Primary emphasis will be on employment generation in rural areas and surrounding small towns through development of physical and social infrastructure and rural industries.
iv) Special measures will be taken to reduce unemployment among the educated not through unproductive public sector employment in administrative jobs but to meet real needs of the economy especially in the social sectors and private sector employment.
v) Effort will be made to accelerate development, increase productivity of small scale/informal sector enterprises and to generate employment in less developed regions to remove regional disparity .
vi) Self-reliance and austerity will be taken as cardinal planks of the entire policy package.
vii) A concerted effort will be made to radically improve the participation of females in income generating economic activities.
viii) Well trained skilled labour force will be developed to help achieve significant gains in productivity and efficiency primarily through the efforts of the private sector.
ix) Full support will be provided to Pakistanis seeking employment opportunities abroad and assistance in productive re-absorption of returning migrants.
x) Opportunities for self-employment will be incurred for those with education, skills and entrepreneurship especially through better access to credit facilities.

Skill Development

  1. i) Particular emphasis will be given on Training of Trainers to maximize the multiplier impact.
    ii) Training in para-medical services, of which presently there is an acute shortage will be increased.
    iii) The industrial apprenticeship schemes will be revitalized and intake will be enhanced.
    iv) The production of skilled manpower for assimilation and spread of new modern technologies especially in the application of electronics, computers and modern production systems will be encouraged.
    v) Mobile training units and trade-tests (through the National Training Board Skills Standard and Certification System) for those who are trained through the informal “Ustad-Shagird” system will be introduced.
    vi) The government will encourage the involvement of private sector to organize intensive in-plant training, actively participate in the establishment and management of vocational training institute; and the National Training Board will be reconstituted with a large representation of the private sector.
    vii) Matric Tech scheme shall be introduced in all schools run by the Workers Welfare Fund to impart Technical Education to the students.
    viii) Increasing the proportion of workers in the labour force with higher levels of education and skills will be encouraged. This will be achieved by complementing general school education with technical/vocational training and by easing the path of school graduates to higher education with an emphasis on professional training.
    ix) The government will standardize courses/curricula and ensure uniform quality control.
    x) The trade unions will be engaged in identifying training needs and priorities and the management of training programmes and training institutes.
    xi) A full-fledged Labour Market Information System shall be established with creation of Human Resource Center at different cities.

  1. The most challenging issue facing Pakistan today is the high rate of growth of population and labour force growing at over 3 percent per annum, amongst the highest in the world. Its population has a literacy rate of less than 60 percent. It possesses an insignificant base for the production of high level
    scientific and middle level technical manpower, and the quality of education has seriously deteriorated in recent years. The main objectives of the country’s Labour Policy shall be to meet the requirements of the economy, the employers and the working classes.
  2. In formulating a strategy to respond to these challenges the
following key factors are taken into account:-

i) During the past decade with an expected growth rate of the labour force of 3.3 percent per annum, the economy is faced with the formidable task of creating 1.25 million jobs annually, if the unemployment and under-employment situation is not to worsen.
ii) The problem of the educated unemployed youth is serious thus requires special programmes.
iii) Educational level and skill training of the industrial work force
remains very low.
iv) Women are Pakistan’s least utilized human resource. Woman labour force participation depicts a gloomy picture.
v) The scientific manpower base in Pakistan lacks strategic depth in meeting contemporary needs of the country. Only 20 percent of the relevant age groups pass matriculation and only a quarter of these students pursue further studies in science.
vi) Labour Market Information is presently not collected in a consistent
and systematic manner.
vii) The global financial crisis has aggravated Pakistan’s economic
Persons with Disabilities

  1. The Government will ensure the special quota for employment of disabled persons in all establishments in private as well as public sector. It will be ensured that discrimination in any case should not be practiced in appointments and/or promotions of persons with disabilities. Equal status and equal opportunities will be provided to all workers including the handicapped. The Government will establish complexes for education and training of disabled workers and disabled children of workers under one roof, especially in remote parts of the country from the Workers Welfare Fund.
  2. The eunuchs are the most neglected human resource segment of the society, subjected to humiliation and molestation. They are not exposed to education and instead are trained to beg, dance or forced into prostitution. Transgendered people are misunderstood and ridiculed for being born in the wrong body and are condemned to exist at the bottom rung of Pakistan’s social ladder. Such people are even denied their right to inheritance, civil rights and registration in the formal workforce. The Government will take cognizance and provide them opportunities for education, job and all other facilities of social welfare which a common citizen is entitled to.
Export of Manpower

Human resource is one of the major capitals of any country. Presently, the highest amount of foreign exchange is being earned through the remittances by the expatriate Pakistanis. Procedures regarding export of manpower will be simplified and streamlined by making necessary amendments in the Emigration Rules to ensure expeditious processing of demands for overseas jobs.
  1. The Overseas Employment Promoters will be given further incentives to enable them to improve their performance. Pakistan Embassies abroad will be asked to extend necessary co-operation to the delegations of OEPs when they visit the labour importing countries for procurement of manpower demands so that they may be able to procure maximum demands for Pakistani labour.
  2. Regular export promotion campaigns and visits to main employers
    especially in the Gulf region will be encouraged.
  3. Return migrants will be viewed as a potential asset (a package of labour skills, experience and investible resources) which will be tapped for the benefit of the economy. Existing schemes to attract investments by migrants while abroad as well as on return will be expanded and made more effective.
  4. In addition to above to enhance the export of manpower, major steps will be taken by the Government, which shall include:  Formulation of Manpower Export Committee in the Ministry to:
    • Prospects of Pakistani emigrant workers
    • Promoting emigration and protecting emigrants
    • Re-integration of returning emigrants and effective use of diaspora
    • Supporting measures and implementation mechanism
    Manpower Export Committee at National Level with following role and
    • Prepare marketing plan and strategy for enhancement of manpower

    • Approve training plan, functional language courses.
    • Arrange financial resources for training in Pakistan.
    • Approve Road Shows/Job fairs in different countries.
    • Extend invitation to important employers and key government
    functionaries of labour receiving countries to assess the training
    facilities in Pakistan - invest for up-gradation.
    • Enhance the strength and capacity of skill training system of
    Pakistan - at par with standards of Labour importing counties.
    • Establishment of a Manpower Export, Research and Information
    Center (MERIC) – in Bureau of Emigration.
    • Coordinate with Ministries and Provincial Governments.
    Coordination and Liaison Committee in Pakistani Missions
    • Coordinate with Manpower Export Committee.
    • Liaison with Pakistani community as well as the private and public
    sector foreign employers.
    • Develop Market strategy and action plan for employment abroad.
    • Provide information on the skills requirement, occupation wise
    emerging opportunities to the Manpower Export Committee.
    • Recommend leading foreign employers & key Government
    functionaries, to be invited to Pakistan for showcasing the prevalent
    training/skill standards, investment in training institutions and hiring
    of manpower.
  5. Performance evaluation of Pakistani Missions inter-alia needs to be made in terms of their initiatives for raising the number of Pakistani workforce, to provide feedback on the key labour market developments, major economic programs and projects.

Contact Info

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  • +92 21 363 10 400
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