August 6, 20160

Room # 3, Falaknuma Bldg.
39 Abdullah Haroon Rd.
Karachi, 74700
Phone: (021)32727266

Date: 06-08-2016

Circular Number: C-166


 We have already given our brief comments on Six Labour Laws of Sindh vide our Circular No. 163 dated 07-05-2016. By making labour only provincial subject, by abolishing the Concurrent List from the Constitution the provinces are making their own labour laws but there is no uniformity leading to confusion and conflicts. Our comments on the latest three labour laws of Sindh are given as under:-

  2. It is on the same pattern as the Federal Factories Act, 1934 with some modifications.
  3. As mentioned earlier the Factories Act is the mother of the labour laws and very exhaustive requiring exhaustive comments. It may be carefully perused and we may be contacted on its specific points and provisions.


  5. It is replaces application of the Shops and Commercial Establishment Ordinance, 1969 with some minor changes including the old mistakes of Central Government and has come into force at once on assent by the Governor.
  6. In definition of the Factory, Section 2(l) refers the repealed Factories Act 1934 although new Sindh Factories Act, 2015 came in force.
  7. In Section 6(5) the employers have option of weekly off either Friday or Sunday.
  8. Registration fee of the establishment by Section 24(2) has been increased from Rs. 50,000/= to 2 Lakhs depending upon numbers of employees without considering the economic conditions of the employer.

  10. It has come into force at once on having been assented by the Governor on 25-04-2016 and notified.
  11. It replaces application of the Federal Industrial and Commercial Employment (Standing Orders) Ordinance, 1968.
  12. At many places, names of have been old laws used such as Factories Act, 1934, Provincial Employees Social Security Ordinance, 1965 and Workmen’s Compensation Act, 1923 instead of Sindh Factories Act 2015, Sindh Employees Social Security Act, 2016 and Sindh Workmen’s Compensation Act, 2015.
  13. The Sindh Terms of Employment (Standing Orders) Act, 2015 has been passed by the Sindh Assembly on 21-3-2016 and assented by the Governor on 25-4-2016 but the year in the Act remained as 2015. In several other Acts proper years have been given.
  14. It has many changes and modified provisions and a few important are given below:-
  15. By Section 1(4) its application to the Industrial & Commercial establishments has reduced from 20 to 10 or more workers or employees employed.
  16. By second proviso to Section 1(4) (b), the Bonus (Standing Order 13) closure of the establishment (Standing Order 15) and provisions for construction workers in Industrial establishment made applicable for establishments not more than 20 persons are employed. However it also refers Standing Orders 17(6) & (8) but there is no such sub-Section (6) & (8) in Standing Orders 17. It should have referred to Standing Orders 16 as S.O, 16(b) (Gratuity) and 16(d) regarding the payment of Gratuity to the heirs of the deceased worker. This mistake will make controversies.
  17. By Section 2(4)(b) in the definition of commercial establishments, new additions of schools, colleges, private educational institutions, hospitals, private health centers, clinical lab and private security agencies have been done.
  18. By Section 2(c) definition of the factory has been added.
  19. Section 2(h) (vii) the establishment of the contractor has been slightly modified.
  20. By new Section 8(2) a new provision for obstruction of the inspector has been added and provides seven days to one month’s simple imprisonment or with fine of Rs. 50, 000/= open the black mail by the labour Department.
  21. A new Section 11 has been added against the discrimination on the basis of gender, religion, political affiliation, sect, colour, cast, creed and ethnic back ground.
  22. In Schedule (Standing Orders) by S.O. 1(vi) a new classification of worker “contract worker” has been added and as explained above, in view of the definition of the worker in section 2(n) and S.O. 1(vi) every worker of the contractor may have the same rights and benefits compared to the workers of the employer.
  23. By S.O. 9(3), (4) & (5) leave application, and approval and refusal have been modified.
  24. By S.O. 10(3), over time payment introduced for the workers working in the commercial establishments, which is a good change.
  25. Compulsory group insurance, S.O. 12 refers old laws Workmen Compensation Act, 1923. Its schedule IV provides 2 lakhs as death compensation but on the contrary in new Sindh Workers Compensation Act, 2015 Schedule IV is 5 lakhs. This shows that the Act made by lay man or bureaucracy which opens door for controversies and litigation.
  26. For closure of the establishment S.O 15 made very difficult to the employers to close down the establishment in genuine situation. Now no employer can terminate more than 50% of the workers or close down the establishment without prior permission of the Govt. except in the event of fire, catastrophe, and stoppage of power supply, epidemics or civil commotion would open door of corruption and black mailing. However if the Provincial Govt. shall not decide such application within 15 days, it shall be deemed to have been granted. An appeal can be filed before the Labour Court within 30 days of any order passed by the Provincial Govt. In explanation clause close down the establishment includes the lay off the workers beyond 14 days.
  27. The Gratuity in S.O 16(6) is almost the same but two new provisos have been added one allows that the seasonal workers shall be entitled to gratuity equal to one month wages for each season and other says that the provident fund amount shall not be less than the gratuity which is very difficult to ascertain because in the provident fund employer and the workers both make contribution every month to the Fund and the Trustees P.F. made investments in securities for the profits. No one can presume/ascertain that what the final amount may get a worker when he leaves the establishment.
  28. In termination of employment S.O 16(10) newly added that if a worker not allowed to work or mark attendance by his employer in any manner, the worker may bring the same into the notice of the Area Inspector in writing within 10 days.
  29. Fine to the worker provided in S.O 21(1) has been increased from 3 paisa to 5% of the wages.
  30. Acts and omissions for the misconduct S.O 21(3) are almost the same but S.O 21(3)(v) (absence) is very confusing and contradictory to the S.O 16(10) because S.O 21(3)(v) gives 7 days time to the worker to inform the gate bandi to the concern Labour Office and on the contrary S.O 16(10) provides 10 days time to the worker to bring the same to the notice of the Area Inspector.

You are requested to carefully peruse the provisions of these Sindh Acts and may consult your Labour Consultant on the matter.

For M/s S. M. Yaqoob


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