Q. What is the minimum notice period required to terminate a permanent employee in Pakistan?
Under Section 113 of the Industrial Relations Ordinance 2002, an employer is required to provide 30 days' notice or payment in lieu of notice before terminating a permanent employee. The same applies to the employee when resigning, unless stated differently in the employment contract.
Q. Can an employer terminate an employee without notice in Pakistan, and under what conditions?
An employer can terminate an employee without notice under Section 2(f) of the Industrial Relations Ordinance 2002 in cases of serious misconduct, including theft, violence, or gross negligence. Immediate dismissal is allowed if the employee’s actions breach contract terms, and this must be documented properly.
Q. Is severance pay or gratuity mandatory when an employee is terminated in Pakistan?
Yes, under Section 18 of the Industrial Relations Ordinance 2002, employees who have worked for over one year are entitled to severance pay (gratuity). The gratuity is typically calculated at one month’s salary per year of service or as per the terms of the employment contract.
Q. What is the legal resignation notice period for employees in Pakistan?
The Industrial Relations Ordinance, 2002 requires employees to provide 30 days' notice when resigning, unless their contract specifies otherwise. Failure to provide notice can result in the employer deducting the employee’s final payment by the equivalent of the notice period.
Q. What happens if an employee resigns without serving the full notice period in Pakistan?
If an employee resigns without completing the required notice period, under Section 13 of the Industrial Relations Ordinance 2002, the employer can deduct the salary equivalent to the notice period from the employee’s final settlement. In some cases, the employer may also seek compensation for the operational loss caused by premature resignation.
Q. Are there special rules for layoffs or downsizing due to redundancy in Pakistan?
Yes, under Section 25 of the Industrial Relations Ordinance 2002, when layoffs occur due to redundancy, employers must follow a “last-in-first-out” (LIFO) policy unless otherwise agreed. Severance payments and redundancy compensation are also mandatory. Employees are entitled to severance pay if they are laid off.
Q. What steps must an employer follow before terminating someone for poor performance or misconduct?
Before termination for poor performance or misconduct, the employer must follow due process as outlined in Section 22 of the Industrial Relations Ordinance 2002. This includes issuing written warnings, conducting a disciplinary inquiry, and providing the employee an opportunity to defend themselves. If the process is not followed, the termination may be deemed unfair.
Q. Can protected employees (e.g., pregnant women) be terminated under Pakistan labor law?
Under the Maternity Benefit Ordinance, 1958 and Section 47 of the Industrial Relations Ordinance 2002, pregnant women cannot be dismissed from their jobs during pregnancy or while on maternity leave. Dismissal based on pregnancy is considered discriminatory and is a violation of the law.
Q. Are probationary employees subject to the same termination rules as permanent staff in Pakistan?
Probationary employees are generally subject to a shorter notice period, usually 1 week to 1 month, depending on their contract terms. However, the same basic termination procedures apply to probationary employees, such as providing notice and paying final dues, as per the Industrial Relations Ordinance, 2002.
Q. What final dues and payments must be settled when an employee resigns or is terminated in Pakistan?
When an employee resigns or is terminated, they must receive unpaid salary, severance pay (if applicable), unused leave encashment, and payment in lieu of notice under Section 13 of the Industrial Relations Ordinance 2002. Employers must clear all dues within the legally specified timeframe, which is typically within 7–10 days of termination.
Q. Can an employee legally challenge an unfair or wrongful termination in Pakistan?
Yes, employees can challenge wrongful termination in labor courts or tribunals under the Industrial Relations Ordinance, 2002. If the termination is found to be unfair or unjust, the employee may be entitled to reinstatement or compensation as determined by the labor court.
Q. Do fixed-term contracts automatically end, or does the employer need to provide notice/pay if they end the contract early or do not renew it in Pakistan?
Fixed-term contracts in Pakistan generally end on the specified date without notice. However, if the employer ends the contract early or does not renew it, they must provide notice or pay in lieu of notice as per the contract terms. This is governed under Section 11 of the Contract Act, 1872 and the Industrial Relations Ordinance, 2002.
