Labour Rights in Pakistan 2026: Wrongful Termination, Minimum Wage, EOBI Pension and How to File a Complaint

By Justify.pk Editorial Team | Reviewed by Zeshan Haider Advocate

Every week, workers in factories, shops, schools, hospitals and private offices across Pakistan face the same problems: a manager says “don’t come from tomorrow”, the salary arrives late or short, the final settlement is never paid, or the employer never registered them with EOBI. Most of them do nothing, because they do not know which law protects them, which office to go to, or how quickly they must act.

This guide explains your core labour rights in Pakistan (مزدور کے حقوق) as they stand in October 2026, with a focus on Punjab: when an employer can lawfully terminate you, what the minimum wage is, how EOBI pension works, what the new Punjab Labour Code 2026 changes, and the step-by-step route to a complaint or a case in the Labour Court. For a shorter checklist on dues after resignation or dismissal, see our guide to unfair termination and full and final settlement.

Key Points at a Glance

• Labour is a provincial subject since the 18th Amendment. Punjab, Sindh, KP, Balochistan and Islamabad each have their own wage rates and labour laws.
• The notified Punjab minimum wage for an unskilled adult worker is Rs 40,000 per month (26 working days), about Rs 1,538 a day.
• A permanent worker covered by the Standing Orders cannot simply be fired: termination needs notice or pay in lieu, and dismissal for misconduct needs a charge sheet and inquiry.
• A dismissed worker must usually send a written grievance notice (شکایتی نوٹس) within 90 days before going to the Labour Court. Missing this deadline is the most common reason good cases fail.
• The minimum EOBI old-age pension is Rs 11,500 a month.
• The Punjab Labour Code 2026 (Act IX of 2026) is enacted law and brings major changes, but check its commencement status before relying on it (explained below).

Which Labour Law Applies to You?

Before you take any step, work out three things:

1. Where you work. A worker in Gujranwala or Faisalabad is governed by Punjab law; a worker in Karachi by Sindh law. If your employer operates in more than one province (a bank, telecom company or national chain), industrial disputes may fall under the federal Industrial Relations Act 2012 and the National Industrial Relations Commission (NIRC).
2. What kind of worker you are. The older laws protect a “workman”: someone doing manual, clerical or technical work. Managers and supervisors with real managerial powers were traditionally left to their employment contracts (the “master and servant” rule) and had to sue in a civil court.
3. Whether you are permanent, probationer, temporary or contract. Protection against termination is strongest for permanent workers. However, courts look at the substance of the job, not the label: a person doing permanent work for years on rolling “contracts” may still be treated as permanent.

The Punjab Labour Code 2026: What Has Changed?

The Punjab Assembly passed the Punjab Labour Code 2026 on 4 February 2026. It received the Governor’s assent and was published in the Punjab Gazette on 10 February 2026 as Act IX of 2026. It consolidates more than two dozen older Punjab labour laws into one code and covers groups that were previously outside the law, including domestic workers, agricultural and construction workers, home-based workers and app-based delivery and ride-hailing workers.

A caution on commencement: section 1(3) of the Code says it comes into force on a date the Punjab Government notifies in the official Gazette. News reports in late May 2026 said the Government had enforced it, but several legal and HR commentators writing as late as September and October 2026 say they could not confirm the commencement notification and advise checking the Gazette. Until the position is confirmed in your case, your lawyer will usually plead both the Code and the older laws.

Once in force, the most important changes for ordinary workers are:

• Termination is no longer at the employer’s whim. It requires a valid reason, a fair procedure and notice. The master-and-servant doctrine is abolished, so managers are also protected.
• Written employment agreements in a language the worker understands become compulsory, and any term below the legal minimum is void.
• Wages must be paid before the 7th of the following month, by bank transfer, with an itemised pay slip. Final dues are payable within two working days of leaving.
• Working time: 8 hours a day or 48 a week, with overtime at double the normal rate.
• Leave: annual leave rises to 18 days, maternity leave to 14 weeks, and a new 130-day iddat leave is introduced for widows.
• Gratuity becomes payable after one year of continuous service instead of five, including for management, fixed-term and contract staff (establishments with fewer than 20 employees remain exempt).

Wrongful Termination: Your Rights Under the Existing Law

For most workmen in industrial and commercial establishments, the rules on termination come from the Standing Orders law (originally the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, as applied in each province). Its key protections are:

1. Termination simpliciter (without misconduct)

An employer can end the services of a permanent worker for reasons other than misconduct only by giving one month’s written notice or one month’s wages in lieu, and the reason must be stated in writing. A termination letter that gives no reason, or a verbal “you are fired”, is open to challenge.

2. Dismissal for misconduct

If the employer alleges misconduct (theft, fraud, absence without leave, insubordination, habitual late attendance and the like), the worker must first receive a written charge sheet (چارج شیٹ), get a chance to reply, and have a fair inquiry in which they can explain and produce evidence. Dismissal without a charge sheet and inquiry is the single most common ground on which Labour Courts order reinstatement.

3. What you are owed on leaving

• Unpaid salary up to the last working day, and notice pay if notice was not given.
• Encashment of earned leave.
• Gratuity under the Standing Orders (or provident fund, if the employer runs one instead), calculated on last drawn wages for each completed year of service.
• Any bonus, overtime or allowance due under your contract or law.
• An experience or service certificate.

Minimum Wage in Pakistan (2026)

The Punjab Labour and Human Resource Department notified a minimum wage of Rs 40,000 per month for adult and adolescent unskilled workers in all industrial and commercial establishments, calculated on 26 working days. That works out to Rs 1,538.46 per day for an eight-hour shift and Rs 192.31 per hour. As of October 2026, no higher Punjab rate for 2026-27 has been notified, although the federal budget raised the rate for Islamabad to Rs 40,700 and Sindh has moved to a higher figure.

Points every worker should know:

• The minimum wage is a floor. A contract that pays less is void to that extent, and the worker can claim the difference.
• It applies equally to workers hired through a contractor; the principal employer cannot escape it by outsourcing.
• Skilled and semi-skilled categories have separate, higher rates notified by the Minimum Wage Board.
• Deductions from wages are allowed only on grounds the law permits (such as tax, EOBI share, authorised advances). Arbitrary “fines” are not.

EOBI Pension: Are You Registered?

The Employees’ Old-Age Benefits Institution (EOBI, ای او بی آئی) runs a contributory pension for private-sector workers in covered establishments. The employer pays the larger share (5% of the minimum wage) and the worker a smaller share (1%). After the required years of insured service, a worker becomes entitled to an old-age pension at the pensionable age (60 for men, 55 for women). EOBI also pays invalidity pension and survivors’ pension to the family of a deceased insured person.

The federal cabinet raised the minimum EOBI pension from Rs 10,000 to Rs 11,500 a month with effect from 1 January 2025, with arrears paid from September 2025. In August 2026 EOBI said any further increase depends on the Pension Fund’s finances and an actuarial assessment under section 21 of the EOBI Act, 1976.

What to do: check your registration through EOBI’s SMS service or nearest regional office using your CNIC. If your employer deducted contributions but never deposited them, or never registered you at all, complain to EOBI promptly and keep pay slips, appointment letters, attendance records and bank statements that prove your service. Years of unregistered work are very hard to prove decades later.

Step-by-Step: How to Challenge a Termination or Recover Dues

Step 1: Collect your documents immediately

Appointment letter, contract, salary slips, bank statements showing salary credits, attendance or gate-pass records, ID card issued by the employer, the termination letter or WhatsApp messages, EOBI and social security cards. Screenshot messages before access is cut off.

Step 2: Send a written grievance notice within 90 days

Under section 33 of the industrial relations law, a worker must bring the grievance to the employer’s notice in writing within 90 days of the day the cause arose (for example, the date of termination). Send it by registered post or courier and keep the receipt. The employer must reply in writing within 15 days. For workers under the NIRC, the federal labour ministry’s guidance warns that the grievance petition becomes time-barred if not filed within the prescribed period after the notice, so do not wait.

Step 3: File a grievance petition in the Labour Court

If the employer does not reply, or rejects the grievance, file a grievance petition before the Labour Court (لیبر کورٹ) with jurisdiction over your workplace (or before the NIRC for trans-provincial establishments) within the time allowed after the employer’s decision or failure to decide. Attach the grievance notice and proof of delivery.

Step 4: Trial and relief

The court will call the employer’s reply, frame issues and record evidence. If the termination was unlawful, it can order reinstatement with back benefits, or compensation instead of reinstatement. Appeals lie to the Labour Appellate Tribunal.

Other routes for money claims

• Unpaid or delayed wages: a claim before the authority under the Payment of Wages law (often the Labour Court or a designated officer), which can order payment plus compensation.
• Below-minimum-wage payment: complain to the Labour Department’s inspectorate in your district, or claim the difference before the wages authority.
• Workplace harassment: a complaint to the inquiry committee or the Provincial Ombudsperson under the harassment law. Our guide on labour laws and workplace harassment protections explains this route.
• Managers outside the “workman” definition: under the old law, a civil suit for damages for breach of contract; once the Labour Code commences, the new dispute resolution forums under the Code.

Common Mistakes Workers Make

• Waiting for the employer to “call back” and letting the 90-day grievance deadline pass.
• Signing a resignation letter or a “full and final” receipt under pressure without receiving the money. If this happens, write to the employer at once stating that the signature was obtained under pressure.
• Sending the grievance by hand without any proof of delivery.
• Not keeping salary evidence because pay was in cash. Ask for written slips, and save any digital record.
• Assuming contract or daily-wage workers have no rights.

Frequently Asked Questions About Labour Rights

Important Sources

• Punjab increases minimum wage to Rs 40,000, Business Recorder.
• EOBI says pension hike subject to assessment, Express Tribune, August 2026.
• The Punjab Labour Code, 2026, ABS & Co.

Conclusion

Pakistani labour law gives workers real protection, but only to those who act on time and keep proof. If you have been terminated, send a written grievance notice within 90 days, collect every document that shows your service and salary, and do not sign away your dues without payment. Check your EOBI registration today, not at retirement. Employers in Punjab, for their part, should review contracts, pay practices and gratuity liabilities against the Punjab Labour Code 2026 now, so that compliance is ready whenever its commencement is confirmed.

Every labour case turns on its documents and deadlines, so get advice early. Justify.pk connects you with verified advocates, and you can request a free legal consultation in confidence. If your case involves a bounced salary cheque, also read our guide on cheque bounce under Section 489-F PPC.

Legal Disclaimer: This article provides general legal information only and is not a substitute for advice from a qualified advocate.

Written for Justify.pk. For personalised guidance, get a free consultation at https://justify.pk/free-consultation or WhatsApp 0300-0779014.