akistan’s provinces have a number of fragmented labour laws. Many of those are out-of-date and contradictory. For example, there are about 10 legislations in each province covering sectors ranging from agriculture to factories, shops and establishments to road transport that use inconsistent definitions for terms like worker, employer, establishment, child and adolescent.

Internationally, and across the region, most governments including those of Bangladesh, Indonesia and Vietnam have developed updated and consolidated labour laws. Recently major reforms have also occurred in India, China, Malaysia, Singapore and South Korea.

To undertake this process in Pakistan, the Labour and Human Resource Departments in the Punjab and Sindh startedwork on developing a unified labour law in 2022-23. Building on earlier work, the aim was to consolidate, simplify and rationalise the law. The governments sought assistance from the International Labour Organisation.

The ILO agreed to assist on the basis that the unified labour laws comply with fundamental labour rights and that the process involves representatives of workers and employers. Unlike the current labour laws, fundamental labour rights apply to all working people. The fundamental rights concern the effective abolition of forced and child labour, equality (anti-discrimination), health and safety at work and freedom of association and collective bargaining.

In line with the provisions of Convention 144 and Recommendation 152 of the ILO, consultations were arranged with all major trade union federations and employers’ organisations during 2023. Detailed presentations were given to discuss and agree on the principles of this work, the structure of the labour codes, the scope of coverage and other important issues. In the first half of 2024, four iterations of the codes were produced, each responding to comments from government officers, employers and unions.

In its latest iteration, each labour code is divided into seven parts. The first part deals with key definitions. These explain which working people are covered by which parts of the code. Part II is about fundamental principles and rights at work. It is applicable to everyone who works, rather than only those who are under an employment contract. It, therefore, uses the term ‘worker.’ This word has sometimes had a narrow meaning in Pakistan, but internationally it includes all persons who work, whether blue collar or white collar, informal or formal, employed or self-employed.

Part III applies to “employees,” which means anyone in an employment relationship. Sometimes the term “employee” is used to refer only to white collar workers in Pakistan (as used to be the case in other English-speaking countries), but this is inconsistent with international usage. Part III deals with employment agreements, remuneration, working time, leaves and so on.

Part IV has detailed provisions on specific categories of workers, most of whom are out of the ambit of labour legislation at the moment, ranging from interns and agriculture workers to construction workers to the platform or gig workers. Part V of the code deals with the various labour welfare provisions, such as bonus, compulsory group insurance, workers’ profit participation and employee compensation, etc.

Part VI consolidates all the provisions pertaining to disputes, sanctions and institutions that are currently scattered across different laws. Part VII has general provisions. This part includes reform provisions on employee data protection; due diligence that must be exercised by the employers in their supply chains; and fair employment standards that must be respected in public procurement contracts.

The legal protections of Part II are applicable to about 58 million people in the Punjab and Sindh, instead of the current coverage of about 9.46 million workers with employment relations in the formal sector. Given that the labour legislation affects everyone in the country from children to those who are retired (passed superannuation age of 60 years), the reform impacts 184 million people in these two provinces. There are nonetheless certain exclusions of coverage relating to workers covered by other legislation, such as civil servant legislation.

The labour codes provide clear definitions of key terms. Instead of the inconsistent array of definitions in the currently applicable laws, the codes propose clear concepts that are consistent throughout.

The reforms in more detail

The code provides clear definitions of key terms. Instead of the array of definitions in the currently applicable laws, the code proposes clear concepts that are consistent throughout. The key definitions concern the concepts of “worker;” “employee;” “employer;” “principal;” and “occupier.”

A second set of important definitions concerns the “employer,” “principal” and “occupier.” An employer in these codes is the person who employs an employee under an employment agreement. This is consistent with how the concept is used internationally and in the common law. “Principal” is a longstanding common law concept that appears in some existing Pakistani legislation. It refers to a person who engages an individual or business to perform work under a service contract. For instance, if a retail business contracts with an IT services provider to provide services to it, the retail business is the principal and the IT services provider is a contractor.

“Occupier” refers to a person who has overall control of a workplace. In a complex workplace such as a construction site or a shopping centre, there may be many employers and principals but one person, who is ultimately in charge of the workplace, is termed as the occupier.

Legislation applicable to all sectors

The current legislation is sector specific. It also has numerical thresholds. At times, it has contradictory provisions. In contrast, the draft labour codes will be applicable to all workers at all workplaces in all sectors. The codes do not stipulate any differential treatment between workers in terms of fundamental rights, on the basis of the sector or the enterprise the worker is engaged in.

Bonded or forced and compulsory labour

The currently applicable legislation focuses only on debt bondage and the resulting bonded labour. However, there are many instances where workers are engaged in exploitative working conditions due to the existence of forced and compulsory labour. The draft labour codes define forced or compulsory labour and include instances of forced overtime in that definition.

Equality of opportunity and treatment

There is no comprehensive legislation prohibiting discrimination in employment matters in the country. The current gender pay gap in the country is 37 percent, meaning for every 100 rupees earned by a male worker, a female worker earns only 63 rupees.

There are no comprehensive provisions in most laws regarding equality of opportunity and treatment at the workplace. The legislation or rules do not define direct and indirect discrimination. The draft labour codes, for the first time, include detailed provisions on discrimination and stipulate prohibited grounds of discrimination such as sex, pregnancy, family responsibilities, social origin, caste and physical appearance, etc. The draft codes also propose establishing the Equal Employment Opportunity Office to receive complaints regarding discrimination and violence and harassment in the workplace.

Worker classifications

While the current legislation classifies workers into six categories, the draft labour codes propose two main categories of permanent employment and fixed term employment. The draft legislation protects the part-time workers for the first time in Pakistan.

Of the 67.25 million employed labour force in Pakistan, around 4 million are in part-time employment. Currently, these workers are not covered under the labour legislation. With the enactment of these codes, they will have access to all workplace rights. Further analysis of the Labour Force Survey 2021 data shows that 82.5 percent of these 28 million wage and salaried employees in the country are in temporary employment, engaged through fixed term contracts or other task-based or project-based arrangements. With the reforms, these workers will have access to all workplace rights.

Payment of remuneration through banking channels

Part III (Employment) enables payment of remuneration to be made through banking channels to ensure that workers are paid full wages without undue deductions. It also requires itemised remuneration statements (pay slip) giving details about gross and net remuneration as well as available leaves (annual, casual, sick leave, etc).

Working time and leaves

The draft labour codes limit overtime to 2 hours per day. The annual leave is proposed to be raised from 14 to 21 calendar days. The codes introduce the concepts of paid quarantine leave (14 days) and Iddat leave (130 days), which are not available under the current legislation. The legislation also provides for accumulation of annual and sick leave.

Maternity protection and family responsibilities

The legislation has detailed provisions on protection from hazardous work for pregnant and nursing workers. The draft codes prohibit dismissal on account of pregnancy (currently, protection from dismissal is available only during maternity leave). The draft codes provide for two nursing breaks of 30 minute each to a nursing mother until the child attains the age of 12 months. For small employers, the code proposes to jointly establish daycare centres. The legislation ensures a minimum of 14 weeks of maternity leave (Sindh already has 16 weeks). The draft codes propose a paternity leave for fathers as well. There are also provisions on flexible working arrangements for workers with family responsibilities.

The proposed reforms are not only compliant with the constitutional guarantees but are also coherent and consistent with international labour standards.

The writers work at the Centre for Labour Research, Pakistan.