Labour laws form the critical legal framework that governs the relationship between employers, employees, trade unions, and the government. They are designed to protect workers from exploitation, ensure safe working conditions, guarantee fair wages, and provide social security. In Pakistan, a nation with a vast and diverse workforce, the evolution and implementation of these laws present a complex picture of progressive legislation entangled with challenges in enforcement and accessibility. This article provides a comprehensive overview of the structure, key provisions, and implementation challenges pertaining to labour laws of Pakistan.
Labour Laws & Rights in Pakistan: Constitutional and Historical Foundation
The foundation of labour rights in Pakistan is embedded in its Constitution. Article 11 prohibits all forms of slavery, forced labour, and child labour. Article 17 provides the fundamental right to form associations and unions. Most significantly, Article 37 (a principle of policy) explicitly directs the state to “secure the right to work, ensure reasonable conditions of work” and “secure the provision of facilities for work and adequate leisure.”
The historical trajectory of these laws is deeply rooted in the colonial era. The first major codification was the Trade Unions Act, 1926, and the Industrial Disputes Act, 1947, which were inherited from British India. Post-independence, Pakistan continued to build on this framework, with a significant shift occurring in the 1970s with the nationalization policies of Zulfikar Ali Bhutto’s government, which introduced more pro-worker legislation.
A major legal reform occurred in 2010 with the 18th Constitutional Amendment, which devolved labour affairs from the federal to the provincial level. This meant that provinces (Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan) were now empowered to legislate on most labour matters. While this allowed for regionally tailored laws, it also led to a fragmentation of the legal framework, creating inconsistencies and compliance challenges for national businesses.
Key Legislations on Labour Laws in Pakistan
Despite provincial devolution, a core set of federal laws still applies, and provinces have largely modelled their new laws on the pre-existing federal statutes. The key areas are covered under the following acts:
- Industrial Relations: The Industrial Relations Act, 2012 (and its provincial equivalents) governs the formation and operation of trade unions, collective bargaining, and the resolution of industrial disputes through mechanisms like Labour Courts, Conciliation, and Arbitration.
- Conditions of Employment: Laws like the Factories Act, 1934, and the Punjab Shops and Establishments Ordinance, 1969 (and provincial variants) regulate working hours, leave entitlements (annual, sick, casual), and holidays. The standard work week is 48 hours (8 hours per day, 6 days a week), with overtime pay required for any additional work.
- Wages: The Punjab Minimum Wages Act, 2019 (and similar acts in other provinces) sets the minimum wage, which is periodically revised by provincial governments.The federal minimum wage was raised to Rs 37,000 per month in the 2024–25 fiscal year, marking a 15.6% increase over the previous year’s level. In the subsequent 2025–26 fiscal year, the government opted to keep the minimum wage unchanged at Rs 37,000.. The Payment of Wages Act, 1936 ensures timely and full payment without unauthorized deductions.
- Social Security & Old Age Benefits: The Employees’ Old-Age Benefits Act (EOBI), 1976 provides pensions and old-age benefits to employees in industrial and commercial establishments. The Punjab Employees’ Social Security Ordinance, 1965 provides medical care, cash benefits for injury, and maternity benefits to workers and their families.
- Workplace Safety & Health: The Occupational Safety and Health Act, 2022 (in Punjab) and similar laws in other provinces mandate employers to provide a safe working environment, free from hazards that could cause injury or illness.
- Employment of Women: The Maternity and Paternity Leave Act, 2023 is a significant federal law. The Maternity and Paternity Leave Act of 2023 in Pakistan mandates paid leave for federal employees, with women receiving 180 days for their first child, 120 for their second, and 90 for their third, and men receiving 30 days paternity leave for the first three births.
- Child Labour: The Employment of Children Act, 1991 prohibits the employment of children under 14 in any industry and regulates the employment of adolescents (14-18 years) in hazardous occupations.
Major Challenges and Gaps in Implementation of Labour Laws in Pakistan
Despite this extensive legal framework, the effective implementation of labour laws in Pakistan remains a formidable challenge. The gap between law and practice is wide, particularly for the vast informal sector, which employs nearly 75-80% of Pakistan’s non-agricultural workforce (International Labour Organization, 2023).
- The Informal Sector Dilemma: The cornerstone of Pakistan’s economy is its informal sector, comprising domestic workers, daily-wage labourers, agricultural workers, and employees in small, unregistered enterprises. These workers largely fall outside the protective umbrella of labour laws of Pakistan lacking job security, social security benefits, and any formal mechanism for grievance redressal.
- Weak Enforcement and Inspection: Labour departments are often under-resourced, understaffed, and susceptible to corruption. The system of labour inspections is weak and inconsistent, allowing many establishments to violate laws with impunity. The process is often more reactive (responding to complaints) than proactive.
- Restrictions on Trade Unionism: While the right to form unions is constitutional, it is often curtailed in practice. Workers in key sectors like agriculture, forestry, and railways were historically barred from forming unions. Furthermore, employers frequently use tactics like intimidation, termination, or forming “pocket unions” (employer-led unions) to suppress genuine collective bargaining (Human Rights Watch, 2018).
- Gender Disparity: Female workforce participation remains low (around 22%), and women who do work often face significant discrimination, harassment, and a gender pay gap. Cultural barriers and a lack of safe transportation and workplace facilities further hinder their participation.
- Child and Bonded Labour: Despite being illegal, child labour is pervasive, especially in agriculture, brick kilns, and the automotive repair industry. In brick kilns, the phenomenon of bonded labour—where workers are trapped in a cycle of debt—persists, a modern form of slavery that laws have failed to eradicate completely.
- Judicial Delays: Labour courts, responsible for adjudicating disputes, are often overburdened with cases, leading to significant delays in justice. A case can take years to resolve, rendering the process ineffective for a worker who needs immediate relief.
Recent Developments and the Way Forward
Recognizing these challenges, there have been concerted efforts at reform. The devolution to provinces has spurred some innovation. Punjab, for instance, passed the comprehensive Punjab Industrial Relations Act, 2019 and the Punjab Occupational Safety and Health Act, 2019. The federal Maternity and Paternity Leave Act, 2020 was a landmark step towards gender equality in the workplace.
The rise of the gig economy (e.g., ride-hailing, food delivery) has created a new class of workers who are not clearly classified as employees or independent contractors, thus falling into a legal grey area with no access to traditional labour protections. This necessitates new legislative thinking.
The way forward requires a multi-pronged approach:
- Formalization of the Economy: Policies that incentivize the registration of informal businesses and their workers are crucial to extending legal protection.
- Strengthening Institutions: Labour departments need more resources, trained inspectors, and digital monitoring systems to ensure effective enforcement.
- Awareness and Empowerment: Workers, especially in the informal sector, must be made aware of their rights. Civil society organizations and trade unions play a vital role here.
- Speedy Justice: Establishing more labour courts and promoting alternative dispute resolution (ADR) mechanisms can reduce case backlogs.
- Gig Economy Legislation: Pakistan must urgently develop a legal framework that grants social security and basic rights to gig workers.
Conclusion
Pakistan possesses a surprisingly robust and detailed body of labour laws that, on paper, protect a wide array of worker rights. However, the existence of law is only the first step. The profound chasm between legislation and implementation, exacerbated by a massive informal sector, weak enforcement, and cultural and economic pressures, leaves millions of workers vulnerable. Bridging this gap is not merely a legal imperative but a socio-economic one. Ensuring dignified work, fair wages, and safe conditions for all citizens is fundamental to achieving sustainable and equitable growth in Pakistan.
References and Sources
- The Constitution of the Islamic Republic of Pakistan, 1973. Articles 11, 17, and 37.
- International Labour Organization (ILO). (2023). Informal Economy in Pakistan. ILO Country Office for Pakistan. https://www.ilo.org/islamabad/areasofwork/informal-economy/lang–en/index.htm
- Human Rights Watch. (2018). “No Room to Bargain”: Unfair and Abusive Labor Practices in Pakistan. https://www.hrw.org/report/2018/11/14/no-room-bargain/unfair-and-abusive-labor-practices-pakistan
- Punjab Government. (2019). The Punjab Minimum Wages Act, 2019.
- Government of Pakistan. (2020). Maternity and Paternity Leave Act, 2020.
- Zaidi, S. A. (2021). Issues in Pakistan’s Economy. 4th Edition. Oxford University Press. (Chapter on Labour Market).
- Khan, S. (2020). “Labour Law Reforms in Pakistan Post-18th Amendment: A Provincial Comparison.” Pakistan Journal of Social Sciences, 40(2), 987-998.
- International Labour Organization (ILO) Database of Labour Laws. https://www.ilo.org/dyn/natlex/natlex4.countrySubjects?p_lang=en&p_country=PAK
- International Trade Union Confederation (ITUC). (2022). ITUC Global Rights Index: Pakistan. https://www.ituc-csi.org/global-rights-index-2022
