Aims to protect the rights and welfare of employees
Prescribes requirements for employment contracts, working hours, leave, social security, and termination benefits
Employment Contract Requirements
Contract Types:
Fixed-term contracts
Indefinite-term contracts
Contract Terms:
Must include the names of the employer and employee, commencement date of employment, duration of employment (if fixed-term), job description, probation period (if applicable), assigned location, salary and payment details, working hours, holidays, sick leave, deductions from salary (fines, absences, damages, taxes), and any other applicable terms and conditions.
Language and Currency:
Contracts must be written in Urdu or English.
Currency is Pakistani Rupee (PKR).
Working Hours Regulations
Standard Working Hours:
9 hours per day, 48 hours per week, Monday to Saturday
Rest Breaks and Intervals:
1 hour rest break per day
No continuous work for more than 6 hours
Employees working more than 8.5 hours per day are entitled to at least two rest breaks
Female employees cannot be employed after 7 pm
Leave Policy
Annual Leave:
14 days of paid annual leave per year after 1 year of continuous service
Public Holidays:
11 statutory public holidays
Special Leave:
Sick leave: Up to 90 days per year
Maternity leave:
First confinement: 180 days
Second confinement: 120 days
Third confinement: 90 days
Paternity leave: Up to 30 days per year
Employee Termination and Contract Termination
Notice Period:
1 month's notice required by both employer and employee
No notice required for temporary workers
Severance Pay:
Employees terminated without misconduct receive severance pay equivalent to 1 month's salary for each completed year of service or any part thereof exceeding 6 months
Protection Against Unfair Dismissal:
Employers cannot terminate contracts arbitrarily outside of the probation period and must have valid reasons for termination
Tax Laws
Personal Income Tax:
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