Employee Handbook (Pakistan)

An Employee Handbook in Pakistan records the particulars of the engagement, fixing salary, working hours, leave entitlement and the grounds for termination.

The Industrial and Commercial Employment (Standing Orders) Ordinance 1968 requires every covered industrial and commercial establishment to prepare Standing Orders — written rules regulating the conditions of employment — and to have those Standing Orders certified by the provincial Labour Department. The Schedules to the Standing Orders Ordinance 1968 specify the mandatory subjects that certified Standing Orders must cover, including: classification of workers (permanent, probationers, temporary, apprentices, badli); attendance and hours of work; shift working; payment of wages (under the Payment of Wages Act 1936); holidays and leave; termination of employment (including notice periods and gratuity); and misconduct and disciplinary procedures under Standing Order 15. An Employee Handbook that incorporates and expands upon the certified Standing Orders provides employees with a single thorough reference document.

The Industrial Relations Act 2012 (Act II of 2012) governs collective bargaining and trade union rights for workers in establishments of ten or more employees, and is administered by the National Industrial Relations Commission (NIRC) and provincial Labour Courts. Employers must confirm that the Employee Handbook is consistent with any Collective Bargaining Agreement (CBA) negotiated with the recognised Collective Bargaining Agent (CBA) of the workforce — a CBA prevails over conflicting provisions of the Employee Handbook. The Industrial Relations Act 2012 also establishes the Works Council framework (for establishments of 50 or more workers), which serves as a forum for management-worker consultation on conditions of employment including handbook policies.

The Protection Against Harassment of Women at the Workplace Act 2010 (Act VI of 2010) mandates that every employer in Pakistan establish an inquiry committee for handling harassment complaints, display a harassment-free workplace statement, and include an anti-harassment policy in the workplace. The Employee Handbook is the primary vehicle for communicating the anti-harassment policy and the inquiry committee procedure to all employees. Failure to include a harassment policy and inquiry committee in the Employee Handbook exposes the employer to liability under the Protection Against Harassment of Women at the Workplace Act 2010.

The Factories Act 1934 (for manufacturing establishments), the West Pakistan Shops and Establishments Ordinance 1969 (for commercial establishments), the Mines Act 1923 (for mining operations), and the Dock Labourers Act 1934 each impose specific requirements on employers regarding working hours, rest periods, overtime, and safety that must be reflected in the Employee Handbook. The provincial Occupational Safety and Health legislation — Punjab Occupational Safety and Health Act 2019, Sindh Occupational Safety and Health Act 2017 — requires employers to communicate safety policies and procedures to all workers, and the Employee Handbook is the appropriate vehicle for this communication.

The EOBI Act 1976 (Employees Old-Age Benefits Institution), the Social Security Ordinance 1965, the Workmen's Compensation Act 1923, and the Employees Cost of Living Allowance (Relief) Act 1973 all create statutory entitlements that must be disclosed to employees. A thorough Employee Handbook summarises these statutory benefits and the employer's compliance with them, providing employees with transparency about their rights under Pakistani labour legislation.

An Employee Handbook in Pakistan is required whenever an employer — particularly one covered by the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 — wishes to communicate workplace policies, statutory entitlements, and conduct expectations to all employees in a structured, legally compliant document.

An Employee Handbook is needed when a company reaches twenty or more employees and becomes subject to the Standing Orders Ordinance 1968, which requires certified Standing Orders to be prepared and provided to workers. While the Standing Orders are a statutory minimum, an Employee Handbook provides a more thorough, user-friendly reference that goes beyond the statutory minimum to cover company culture, values, IT policies, data protection under PECA 2016, and sector-specific requirements.

An Employee Handbook is required when a company is growing rapidly — through new hires, acquisitions, or business expansion — and needs a standardised set of workplace rules that can be consistently applied across all employees, departments, and locations in different provinces (Punjab, Sindh, KPK, Balochistan). Inconsistent application of workplace rules — disciplining some employees for conduct that is overlooked in others — is a ground for unfair labour practice complaints before the NIRC and provincial Labour Courts under the Industrial Relations Act 2012.

An Employee Handbook is needed when a company wishes to comply with the Protection Against Harassment of Women at the Workplace Act 2010 by establishing and communicating a formal anti-harassment policy, inquiry committee composition, complaint procedure, and the penalties for harassment. The Punjab and Sindh Ombudsman offices for harassment complaints require evidence that the employer has published a workplace harassment policy.

An Employee Handbook is required when a multinational company, a foreign direct investment (FDI) company, or a company with international shareholders and governance standards establishes operations in Pakistan and needs to align local employment practices with global human resources policies — adapting global standards to Pakistani legal requirements under the Standing Orders Ordinance 1968, Industrial Relations Act 2012, and applicable provincial laws.

An Employee Handbook is needed when a company undergoes a merger, acquisition, or restructuring under the Companies Act 2017 (administered by SECP), and the acquiring company needs to harmonise the employment policies of the merged entities into a single consistent Employee Handbook applicable to all employees of the combined organisation.

A thorough Employee Handbook in Pakistan under the Industrial and Commercial Employment (Standing Orders) Ordinance 1968, the Industrial Relations Act 2012, and related Pakistani labour legislation must contain the following essential sections.

Welcome and Company Overview: An introduction from the CEO or HR Director, the company's mission, values, and history, and a statement that the handbook is not a contract of employment but a policy guide — this statement is important to prevent the Employee Handbook from being treated as a contractually binding document that limits the employer's managerial discretion, while still acknowledging that statutory rights override any handbook provision.

Employment Classification and Probation: Categories of employees under the Standing Orders Ordinance 1968 — permanent, probationary (maximum three months), temporary, casual, apprentice (under the Apprenticeship Ordinance 1962), and contract — with the specific rights and obligations applicable to each category. The probation policy must specify the maximum probation period (three months under the Ordinance), extension conditions, and confirmation procedure.

Working Hours, Attendance, and Overtime: Standard daily and weekly working hours (eight hours per day, 48 hours per week under the Factories Act 1934; nine hours per day for shops and commercial establishments under the Shops and Establishments Ordinance 1969), attendance recording procedures, flexible working arrangements where offered, and overtime policy — overtime must be paid at double the ordinary rate under the Factories Act 1934. Shift working rotation policies and night shift differential pay (where applicable) must be specified.

Leave Policy: All categories of statutory and company leave — annual leave (14 days after 12 months of service under the Factories Act 1934, or as per Standing Orders Ordinance 1968), casual leave (10 days), sick leave (8 days with medical certificate), maternity leave (12 weeks under the Maternity Benefit Ordinance 1958 and provincial equivalents — 16 weeks in Punjab under the Punjab Maternity Benefit (Amendment) Act 2021), paternity leave (where the company policy provides), religious/public holidays (as notified annually by the provincial government and the federal Ministry of Interior), and Hajj leave for Muslim employees. Leave application procedures, approval authority, and carry-forward or encashment rules.

Remuneration and Benefits: Pay scales or pay grades, salary payment date (first of the month or another specified date, consistent with the Payment of Wages Act 1936 which requires payment within 7 days of the wage period for establishments with fewer than 1,000 employees), salary slip requirement, EOBI registration and contribution disclosure, Social Security (PESSI/SESSI) registration and contribution, gratuity policy (30 days' last drawn wages per year of service under Standing Order 12 of the Ordinance), and any additional benefits (health insurance, annual bonus, transport, mobile phone allowance, HRA).

Code of Conduct and Ethics: Professional behaviour standards, conflict of interest policy, confidentiality obligations (particularly relevant for employees with access to trade secrets or customer data under the Contract Act 1872 and PECA 2016), gifts and entertainment policy, social media policy (consistent with PECA 2016 prohibitions on defamatory and offensive digital content), and compliance with the employer's anti-corruption and anti-bribery policy aligned with the National Accountability Bureau Ordinance 1999 and the Prevention of Corruption Act 1947.

Anti-Harassment Policy: A detailed anti-harassment policy as required by the Protection Against Harassment of Women at the Workplace Act 2010, including the definition of harassment under Section 2(h) of that Act, the constitution and terms of reference of the Inquiry Committee, the complaint filing procedure, investigation timelines, confidentiality obligations, and penalties for proven harassment (dismissal, demotion, fine) and for false complaints. Contact details of the Ombudsperson for the relevant province.

Health, Safety, and Environment (HSE): The employer's commitment to a safe workplace under the Punjab Occupational Safety and Health Act 2019, Sindh Occupational Safety and Health Act 2017, or the Factories Act 1934 as applicable; mandatory safety training obligations; personal protective equipment (PPE) requirements; accident and near-miss reporting procedure; emergency evacuation procedure; and prohibitions on working under the influence of drugs or alcohol.

IT and Data Security: Acceptable use policy for company IT systems, email, internet, and mobile devices; prohibition on use of company systems for personal or commercial purposes outside official duties; data protection obligations under PECA 2016 regarding storage and transmission of personal data; password management standards; and consequences of IT policy violations.

Disciplinary and Grievance Procedures: The full disciplinary procedure — verbal warning, written warning, final written warning, suspension pending enquiry, and dismissal — consistent with Standing Order 15 of the Standing Orders Ordinance 1968; the domestic enquiry process including charge sheet, show-cause notice, enquiry officer appointment, hearing, and decision; the appeal procedure; and the grievance procedure for employee complaints — internal escalation, Works Council referral, and ultimately complaint before the Labour Court under Section 33 of the Industrial Relations Act 2012.

Separation and Exit: Resignation notice periods (one month for permanent employees under Standing Orders Ordinance 1968), termination notice periods (one month for permanent employees), redundancy procedures under the Standing Orders Ordinance 1968, final settlement computation (salary, encashment of unused leave, gratuity, EOBI contributions), and exit clearance procedure including return of company property.

Forms-legal.com provides this Employee Handbook (Pakistan) template as a thorough starting framework. Employers should have the handbook reviewed by an Advocate specialising in Pakistani labour law and submit certified Standing Orders to the provincial Labour Department as required by the Standing Orders Ordinance 1968 before distributing the handbook to employees.