COUNTRY

Employment contracts in Pakistan may be written or verbal. It is common for employers to execute a written contract or appointment letter that establishes the terms and conditions of the employment relationship. Written contracts should have:

• names of employer and employee,

• start date of employment,

• duration of employment (if for a fixed term),

• job description,

• probation period (if applicable),

• position assigned,

• salary and payment details,

• work hours,

• vacation days,

• sick leave,

• deductions from wages (fines, absence, damage, taxes), and

• any other applicable terms and conditions.

Contracts must not include a clause that discriminates against a person for having a membership with a trade union.

The standard work period in Pakistan is nine hours a day and 48 hours a week over six days. Employees receive a one-hour break each day and must not work more than six hours continuously without a break. Employees who work more than 8.5 hours a day are entitled to at least two breaks. Female employees are not allowed to work past 7 p.m. Seasonal employees can work as many as 50-56 hours a week, provided there are reasons for the additional hours. Overtime cannot exceed 12 hours per day and is paid at twice the ordinary rate. It is illegal to have an employee work 10 consecutive days without receiving a holiday. No employee can work on Sunday unless they are given a substitute holiday within the following or the previous three days.

An employee in Pakistan receives up to 90 days of sick leave per calendar year, if contributions were made on the employee’s behalf during the last six months immediately preceding the sickness.

Female employees in Pakistan are entitled to paid maternity leave for three births. They receive:

• 180 days of paid maternity leave for the first birth,

• 120 days for the second birth, and

• 90 days for the third birth.

After the third birth, the female employee is disqualified from receiving payments for maternity leave.

Maternity leave begins six weeks before the employee’s delivery due date. Female employees must provide written notice to their employers informing them of the pregnancy as soon as they know they are pregnant. Pakistan’s social security system offers additional 12-week maternity leave coverage to employees who contributed to their social security benefits at least 180 days in the last 12 months before maternity leave. Male employees in Pakistan receive paternity leave up to a maximum of 30 days per year with full pay.

Pakistan's minimum wage for unskilled workers as of 2023 is 32,000 Pakistani rupees (PKR) per year. Businesses with a workforce of 20 or more are required to distribute a profit bonus to qualifying staff.

Employees in Pakistan receive 14 consecutive days of paid annual leave after one year of service. Any days that are not used during a calendar year can be carried over to the following year, provided the days carried over do not exceed 14 days. Before an employee’s holiday starts, the employer must pay half the total payment due for the holiday period. Any accrued but unused vacation days are paid to the employee upon separation of service.

In Pakistan, the public holidays are:

• Kashmir Day

• Pakistan Day

• Labor Day

• Eid ul-Fitr

• Eid ul-Azha

• Independence Day

• Ashura

• Birthday of Prophet Muhammad (Eid Milad un-Nabi)

• Birthday of Muhammad Iqbal

• Christmas Day

There is no public health insurance in Pakistan, so private insurance is recommended.

Either party can terminate an employment contract in Pakistan by giving one month’s notice to the other party. However, the notice rule does not apply to temporary workers, “badlis” (alternate employee working in place of an absent permanent worker or probationer), and probationers. They are not entitled to a one-month notice. In cases of terminating full-time employees for misconduct, no notice is required. Grounds for termination are serious illness, insufficiently performing the job, or financial and economic needs of the organization. An employer may cancel the employment contract if the employee is accused of any misconduct such as breach of the law, unexcused absence, willful disobedience, damage to employer’s property, theft, fraud, illegal strike or work slowdown, or a crime whether civil or criminal. All terminations must be documented in writing, stating the reasons for such dismissal.

An employee who has been terminated for any reason other than misconduct receives a severance payment of one month's wages for every completed year of service or any part thereof in excess of six months. The employer must pay one month’s wages calculated on the average of the last three months of service before the termination by the day after the termination.