BalochistanBalochistan Industrial and Commercial Employment (Standing Orders) Act, 2021

September 6, 20210

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39 Abdullah Haroon Rd.
Karachi, 74700
Phone: (021)32727266

Date: 06-09-2021

Circular Number: C-192

Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021

After the 18th amendment of the Constitution of Pakistan abolishing the Concurrent List, all subjects of the Concurrent List, including the Labour have gone exclusively in the jurisdiction of the provinces and, thereafter, the Provincial Governments make Labour Laws for the establishments functioning in their respective Provinces.

Provincial Assembly of Balochistan recently passed FOUR LABOUR LAWS
as under:

  1. Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021
  2. Balochistan Factories Act, 2021
  3. Balochistan Minimum Wages Act, 2021
  4. Balochistan Shops and Establishment Act ,2021

The bill of The Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021 passed on 31-5-2021 by the Balochistan Assembly and Governor of Balochistan assented on 11-6-2021. Our comments on the major changes are as under:-

  1. Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021 is the copy of the Industrial & Commercial Employment (Standing Orders) Ordinance 1968 like other provincial Standing orders with certain major amendments.

  2. The Act at various places used the name of the old Factories Act 1934 and Payment of Wages Act, 1936 instead of new Acts of Balochistan Factories Act, 2021 and Balochistan Payment of Wages Act, 2021, which will create confusion and legal complications.

  3. By its section 1(4) (a), it’s made applicable to the Industrial and Commercial establishment employing 10 or more workers, (excluding the Managers and Directors having full control on the affairs establishment and whose employment conditions are governed by the laws relating to civil servants) which is confusing as in the private establishments employment conditions are not governed by the laws relating to civil servants. This limit was 20 or more workers in the Standing Orders Ordinance, 1968.

  4. A proviso after section 1(4) Standing Orders Ordinance, 1968 is not made available in the Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021 which exclude bonus, gratuity, stoppage of work and punishments to Industrial establishments employing not more than 49 persons. It means that now the provisions of bonus, gratuity stoppage of work and punishments are applicable to the Industrial and Commercial establishment employing 10 or more workers, which will be a great monetary burden to the small establishments.

  5. In definitions of Commercial Establishments, section 2 (c), in explanation, office establishment of a non-government organization, a charitable institution, foreign investor, a local investor and a service provider included as a commercial establishment.

  6. In definition of worker, section 2 (k), added, work that involves any expertise or specialized or technical knowledge or work of the same or similar nature.

  7. In the definitions two new clauses, section 2 (l) and (m) introduced regarding the discrimination and victimization.

  8. In inspection, section 6 of the Act, introduced that inspector may enter in the establishment alone or along with any other persons in the service of the Government including a police officer, if need so arises for the sake of assistance if he apprehends any obstruction.

  9. In Penalties and procedure, section 7 of the Act, huge fine is introduced from Rs. 100,000/= to Rs. 500,000/= for various violations under the Act.

  10. Two new sections introduced, Protection against discrimination, section 10 and Prohibition of Victimization, section 11 have been introduced.


  11. In the Schedule of Standing Order, section 2(h) wrongly mentioned instead of section 2 (i).

  12. In Standing Order 1 (b), Permanent Worker, a new proviso has been added which prohibits employers controlling or owning different establishments to transfer the permanent workers without their consent.

  13. In Standing Order 1 (g), modified contract workers who work from three to less than 12 months with certain conditions against exploitation of contract workers.

  14. In Standing Order15, retrenchment of 50% or more workers and closure of establishment, prior permission is to be required by the Provincial Govt. instead of Labour Court with no details to whom in the Govt. approach. In case permission is given by the Govt. Workers or CBA can file an appeal in the Labour Court within 30 days.

  15. In Standing Order 16(1), for termination of a worker for any reason other than misconduct, three month’s notice is to be given by the employer or worker or in lieu of notice three month’s last drawn wages are to be paid.

  16. In Standing Order 16(3), three proviso are added for termination of service without assigning any reason due to down-sizing of the establishment and pay to the worker a redundancy pay for a period ranging from one year to five years at the rate of the last pay or wages drawn by him depending upon the length of service.

  17. In Standing Order 17, Gratuity has been raised from one month to two months on every completed year of service on last drawn wages which is at highest and nowhere available in any province in Pakistan and difficult to implement in small establishments.

  18. In Standing Order 17 (gratuity), a proviso has been added which provides that amount of gratuity in respect of every permanent employee shall be invested in fixed term account that shall be opened as soon as the employee joins employment so that the amount in it grows with time and the same shall become payable at the time of their discharge from service. The rate of the monthly/yearly investment by the employer and employee are not mentioned in it.

  19. In Standing Order 17 (gratuity), a second proviso has been added which is confusing and conflicting and seems to be a drafting error. The erroneous meaning of the 2nd proviso, would be that where provident fund exist, gratuity, provident fund (employer and employee share) and the profit earned, which combined is the entire amount the worker is entitled to receive, shall not be payable to workers in case of termination of his service.

  20. In Standing Order 17 (gratuity), third proviso added which says that 1/3rd amount of gratuity and provident fund will be forfeited if a worker is dismissed for an act of misconduct and their punishment is upheld by a court of competent jurisdiction.

  21. In Standing Order 21 (3), list of misconduct are the same with Standing Orders, 1968 except the (l) “habitual go-slow and poor quality of production otherwise than under the influence of trade union or part of trade union activity”. In Standing Order 21 (4) & (5), procedure of misconduct to be informed to the worker in writing (charge sheet/show cause notice), enquiry, suspension and dismissal are the same like Standing Orders, 1968 except the limitation of the misconduct to be informed in writing (charge sheet/show cause notice) has been reduced to one month to one week which is not practical and logical. Word gross misconduct has been used in standing order 21 (2) (d) instead of misconduct but no act or omission of gross misconduct explained.

  22. In Standing Order 22, eviction from residential accommodation if a worker resigns or retires, or has been retrenched, discharged or dismissed, or whose services have been terminated, shall vacate such accommodation within a period of four months instead of two months as provided in Standing Orders, 1968.

  23. In Standing Order 24, in liability of employer, a new proviso added in addition of Standing Orders, 1968, which says that, “no contractor or sub-contractor or service provider shall be absolved of his responsibility in case he has entered into an agreement with the employer for supply of manpower or any number of employees for the purpose of the establishment or undertaking of the employer”.

You are requested to carefully pursue the provisions of the Balochistan Industrial and Commercial Employment (Standing Orders) Act, 2021 and may consult your Labour Laws Consultant on the matter.

For M/s S. M. Yaqoob


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