The goals of the labour laws of India and Pakistan are to uphold worker
rights and guarantee a safe workplace. The Factories Act of 1948, the Minimum
Wages Act of 1948, the Industrial Disputes Act of 1947, and the Employees'
Provident Funds and Miscellaneous Provisions Act of 1952 are the most
significant legislation that safeguard employees' rights. These rules control
pay, working conditions, and how conflicts between employees and employers are
The Factories Act, 1934, the West Pakistan Industrial and Commercial Employment
(Standing Orders) Ordinance, 1968, and the Minimum Wages for Unskilled Workers
Ordinance, 1969 are the main labour regulations of Pakistan. These regulations
deal with things like pay, working hours, and workplace security.
There are several differences between the labour laws of India and Pakistan but
this blog majorly focuses on the employment security and dispute resolution
mechanism adopted by both the countries.
An employee's right not to be terminated unfairly or without cause is a present
day characteristic of the law governing termination of employment. This right is
not universal, despite being prevalent in the legal systems of many nations.
A lot of organisations and employer communities feel that having rigorous
procedures for firing an employee makes it more difficult to bring on new staff.
They contend that it makes it more difficult for an organisation to swiftly
adjust to change and make changes, which lowers output and efficiency
Employment Security in India
The key legislation that governs the termination of an employee are The
Industrial Employment (Standing Orders) Act (IESA), enacted in 1946, and the
Industrial Disputes Act (IDA), enacted in 1947.
According to Indian legislation the workers are categorised under 5 categories.
Those are permanent, probationary, badli, temporary, casual, and apprentice.
Termination of employment can be conducted in following way:
- The employment contract may terminate without the employer's involvement
in two circumstances: employee retirement and the conclusion of a fixed-term
- According to Indian law, there are three basic ways to terminate an
employee's employment by employer: termination for misbehaviour, discharge,
An employer must give one month's notice or pay the permanent employee in lieu
of the notice if they want to lawfully terminate the employee's employment.
There is no need for notice when an employee is liable to summary dismissal due
to serious misbehaviour. There is no need to provide notice to badli,
probationary employees, or temporary workers. The amount is calculated at 15
days of average pay for each year of service that has been completed.
Employment security in Pakistan
The principal laws governing the dismissal of employee in Pakistan are The West
Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968
(ICEO), and the Industrial Relations Ordinance, 1969 (IRO).
The employees protected under the West Pakistan Industrial and Commercial
Employment (Standing Orders) Ordinance may not be terminated of employment
without a valid and supported justification. Both terminations for cause and
terminations simplicitor are subject to this provision. Permanent employees
covered under the West Pakistan Shops and Establishments Ordinance or the West
Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance are
required to give notice of termination.
According to the West Pakistan Industrial and Commercial Employment (Standing
Orders) Ordinance, employees who have had their employment terminated for any
reason other than misconduct are entitled to severance pay or a gratuity equal
to 30 days' worth of wages for each year of service that has been completed, or
any portion thereof, that is longer than six months.
Dispute Resolution Mechanism
The connection between employers and employees in modern industrial society is
one of the most delicate and difficult topics. Conflict between management and
employees is inherent in industries. The other encourages a greater quality of
living, whereas the first encourages more investment and profits. These two
opposing goals may be momentarily adjusted according to the idea of give and
Collective bargaining is one method for addressing issues between the employer
and the workforce. This method of resolving disputes was developed with respect
to power and stability of the trade union administration. Before the advent of
collective bargaining, it was extremely difficult for workers to negotiate
reasonable terms with employers for service contracts.
The growth of trade unions in the country and the adoption of collective
bargaining led to the realisation by employers that dealing with the
representatives of the workers is more convenient and necessary than dealing
with individual workers, for the creation or modification of contracts and in
the matter of taking disciplinary action against the workers
Dispute Resolution Mechanism in India
The purpose of the Industrial Disputes Act,1947 was to create the processes and
tools required for the investigation and settlement of industrial disputes in
order to resolve them and maintain industrial peace and harmony.
The Industrial Dispute Act,1947 gives it the power to refer disputes to
non-adjudicatory or adjudicatory methods of dispute resolution.
Apart from "Voluntary Arbitration," the non-adjudicatory authorities are "Works
Committees," "Conciliation Officer," "Board of Conciliation," and "Court of
Inquiry." The mandatory adjudication authorities are "Labour Courts,"
"Industrial Tribunals," and "National Tribunals." The High Court or Supreme
Court can hear the matter when the appropriate processes with adjudicatory or
non-adjudicatory agencies have been completed.
The Industrial Disputes Act lists collective bargaining, mediation,
conciliation, investigation, arbitration, and adjudication as the primary
methods of conflict resolution.
The employer shall establish, in accordance with the rules under this Act, a
Grievance Settlement Authority for the resolution of labour disputes involving a
specific workman employed in the establishment, with respect to every industrial
establishment in which fifty or more workers are employed or have been employed
on any day in the previous twelve months
Dispute Resolution Mechanism in Pakistan
Within 90 days after the day on which the cause of the grievance emerges, a
worker may notify his employer of his grievance in writing, either directly or
through his shop steward or collective bargaining representative. When a worker
notifies an employer of a grievance through a shop steward or collective
bargaining representative, the employer must notify the shop steward or agent in
writing of his decision within seven days. A Tripartite Council with a minimum
of three representatives from the government, employers, and employees would
assess worker issues in the Islamabad Capital Territory. A collective bargaining
agent has the right to share his opinions with the Works Council if the employer
or agent believes that a labour conflict has already occurred or is about to do
so. If there is still no agreement, the matter may be taken to labour court.
The comparative analysis of labour laws in India and Pakistan reveals both
similarities and differences between the two countries. While both India and
Pakistan have established comprehensive legal frameworks to protect the rights
and welfare of their respective workforce, there are notable distinctions in
their approach and implementation.
Both countries have made significant progress in enacting laws that cover
various aspects of employment, such as Employment Security and Dispute
Resolution Mechanism. However, challenges persist in ensuring effective
enforcement of these laws, particularly in the informal sector where workers
often face exploitation and lack access to legal protections.
One key difference between India and Pakistan is the level of flexibility in
their labour laws. India has seen recent reforms aimed at liberalizing its
labour laws and promoting ease of doing business, while Pakistan has opted for a
more regulated approach with stringent labour laws to protect workers' rights.
This has led to differences in areas such as hiring and firing practices,
collective bargaining, and unionization. Labour laws of Pakistan do not include
white collar workers in the definition of employee or worker rendering those
class of people remedy less in case of exploitation.
Despite the differences, both India and Pakistan face similar challenges in
effectively implementing and enforcing their labour laws, such as inadequate
enforcement mechanisms, lack of awareness among workers, and weak compliance by
employers. Both countries need to address these challenges and take steps to
ensure that their labour laws are effectively enforced, and the rights and
welfare of workers are protected.