Business & Labour Law

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 Syed Salman Ahmed
sirsalmanahmed@[Link]
0300-3610026
Ph-D in progress
MBA (Marketing & Finance) (Silver Medal) IBA Karachi
MEM (Quality Management) (Silver Medal) NED UET Karachi
MBA (MIS) (Silver Medal) IBA Karachi
MAS (HRM) UoK Karachi
MA (Economics) UoK Karachi
PGD (CIS) (Gold Medal) UoK Karachi
B E (Aerospace) NED UET Karachi
LLB UoK Karachi
Teaching Experience : 32 Years
THE INDUSTRIAL AND COMMERCIAL EMPLOYMENT
(STANDING ORDERS)
ORDINANCE, 1968
(1) This Ordinance is called Industrial and Commercial
Employment (Standing Orders) Ordinance, 1968.
(2) It extends to the whole of the Pakistan
(3) It shall come into force at once.
(4) It applies to every industrial establishment or
Commercial establishment wherein twenty or more workmen
are employed, directly or through any other person whether
on behalf of himself or any other person, or were so
employed on any day during the preceding twelve months
 Classification of Workman

Workmen shall be classified as:-

1. permanent
2. probationers
3. badlis
4. temporary
5. apprentices
6. Contract worker
 Classification of Workman

A "permanent workman" is a workman who has been

engaged on work of permanent nature likely to last more than
nine months and has satisfactorily completed a probationary
period of three months in the same or an other occupation in
the industrial or commercial establishment including breaks
due to sickness, accident, leave, lock-out, strike (not being an
illegal lockout or strike) or involuntary closure of the
establishment; and includes a badli who has been employed
for a continues period of three months or for one hundred and
eighty three days during any period of twelve consecutive
months.
 Classification of Workman

“probationer” is a workman who is provisionally employed to

fill a permanent vacancy in a post and has not completed three
months service therein. If a permanent employee is employed
as a probationer in a higher post he may, at any time during
the probationary period of three months, be reverted to his old
permanent post.
 Classification of Workman

A “badli” is a workman who is appointed in the post of a

permanent workman or probationer, who is temporarily absent.

A “temporary workman” is a workman who has been engaged

for work which is of an essentially temporary nature likely to be
finished within a period not exceeding nine months.

An “apprentice” is a person who is an apprentice within the

meaning of the Apprenticeship Ordinance,1962.

“Contract Worker” means a workman who works on contract

basis for a specific period of numeration to be calculated on
piece rate basis.
 Groups incentive scheme.

(1) In every industrial establishment which is a factory and in

which fifty or more workmen are employed there shall be
introduced from such date as may be specified by the Provincial
Government, a group incentive scheme to provide incentive for
greater production to groups of workman employed in the factory.
The scheme shall provide the manner in which the performance
of different groups of workmen, whether in the same section,
shop, Department or shift or in different sections, shops,
Departments or shifts, shall be evaluated.

(2) The incentive shall be in the form of additional wages or

additional leave with wages or in both such forms to the
members of the group of workmen whose production exceeds
that of the other groups or the average of all the groups.
 Compulsory group insurance.

(1) The employer shall have all the permanent workmen

employed by him insured against natural death and disability
and] death and injury arising out of contingencies not covered
by the workman’s Compensation Act, 1923 or the Provincial
Employees Social Security Ordinance 1965.

(2) The employer shall in all cases be responsible for the

payment of the amount of premium and for all administrative
arrangements whether carried out by himself or through an
insurance company.

(3) The amount for which each workman shall be insured shall
not be less than the amount of compensation specified in
Workmen's Compensation Act, 1923.
 Compulsory group insurance

(4) Where the employer fails to have a permanent workman

employed by him insured in the manner laid down in
abovementioned clauses and such workman suffers death or
injury arising out of contingencies mentioned in clause (1) the
employer shall pay in the case of death, to the heirs of such
workman or in the case of injury, to the workman, such sum of
money as would have been payable by the insurance company
had such workman been insured.

(5) All claims of a workman or his heirs for recovery of money

under above clause shall be settled in the same manner as is
provided for the determination and recovery of compensation
under the workmen's Compensation Act, 1923.
 Payment of Bonus

(1) Every employer making profit in any year shall pay for that
year within three months of the closing of that year to the
workman who have been in his employment in that year for a
continuous period of not less than ninety days a bonus in
addition to the wages payable to such workman.

(2) The amount of the bonus payable shall.

(a) if the amount of the profit is not less than the aggregate
of one month's wages of the workmen employed, be not less
than the amount of such aggregate subject to the maximum
of thirty percent of such profit;

(b) if the amount of the profit is less than the aggregate

referred to in paragraph (a), be not less than fifteen per cent
of such profit.
 Payment of Bonus

Illustration
(I) If the profit is Rs. 12,000,000 and the
aggregate of one month's wages of the workman is
Rs.3,000,000 the amount of the bonus payable shall be not
less than the aggregate of one month's wages that is to say,
Rs. 3,000,000.

(II) If the profit is Rs, 3,000,000 and the aggregate

of one month's wages of the workmen is also Rs.3,000,000,
the amount of the bonus payable shall be not less than thirty
percent of the profit, that is to say, Rs.1,000,000.

(III) If the profit is Rs, 1,000,000 and the aggregate of one

month's wages of the workmen is also Rs.3,000,000, the
amount of the bonus payable shall be not less than fifteen
percent of the profit, that is to say, Rs.150,000.
 Termination of employment

(1) For terminating employment of a permanent workman,

for any reason other than misconduct one month's notice shall
be given either by the employer or the workman. One month's
wages calculated on the basis of average wages earned by the
workman during the last three months shall be paid in lieu of
notice.

(2) No temporary workman, whether monthly-rated, weekly-

rated, daily-rated or piece-rated, and no probationer or BADLI,
shall be entitled to any notice if his services are terminated by
the employer, nor shall any such workman be required to give
any notice or pay wages in lieu thereof to the employer if he
leaves employments of his own accord.
 Termination of employment

(3) The services of a workman shall not be terminated, nor

shall a workman be removed, retrenched, discharged or
dismissed from service, except by an order in writing which
shall explicitly state the reason for the action taken. In case a
workman is aggrieved by the termination of his services or
removal, retrenchment, discharge or dismissal, he may take
action in accordance with the provisions of Industrial Relations
Ordinance, and thereupon the provisions of said section shall
apply as they apply to the redress of an individual grievance.
(4) Where the services of any workman are terminated, the
wages earned by him and other dues, including payment for
unavailed leave, shall be paid before the expiry of the second
working day from the day on which his services are terminated.

(5) The services of permanent or temporary workman shall

not be terminated on the ground of misconduct otherwise than
in the manner prescribed in Standing Order 15.

(6) Where a workman resigns from service or his services

are terminated by the employer, for any reason other than
misconduct, he shall, in addition to any other benefit to which
he may be entitled under this Ordinance or in accordance with
the terms of his employment or any custom, usage or any
settlement or an award of a Labour Court be paid gratuity
equivalent to thirty days.
(7) A workman shall be entitled to receive the amount
standing to his credit in the Provident Fund, including the
contributions of the employer to such Fund, even if he resigns
or is dismissed from service.

(8) Where a workman dies while in service of the employer,

his dependant shall be paid gratuity in accordance with the
provisions of clause (6) above

(9) If the employer fails to pay the amount of the gratuity

under clause (8) above, the dependant of the deceased may
make an application to the Commissioner for the recovery of the
amount thereof.