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Pakistan - Minimum Wages - 2011


LAST UPDATE

13 September 2011

SOURCES


Name of Act

Minimum Wages Ordinance 1961, dated 28th September 1961, Ordinance XXXIX of 1961

Name of Act

Minimum Wages for Unskilled Workers Ordinance 1969, Gazette of West Pakistan 1969-09-01, as amended up to Finance Bill of 2008

Name of Act

West Pakistan Minimum Wages Rules 1962

Name of Act

Apprenticeship Rules 1966 of 23 June 1966, Labour Code of Pakistan. M. Shafi, P. Shafi. Bureau of Labour Publications. Karachi. Pakistan. 1997, pp. 15-24- 13th ed

Name of Act

Payment of Wages Act 1936, Act No. IV of 1936, dated 23rd April 1956, as amended. Published at http://www.paksearch.com/Government/LAWS/PWA36/PWA36.html and accessed 30 August 2011.

Name of Act

Employment (Record of Services) Act 1951, Act XIX of 1952. Published by Punjab Laws Online at http://punjablaws.gov.pk/laws/422a.html and accessed 30 August 2011.

Name of Act

Minimum Wages (West Pakistan Amendment) Ordinance 1970, W.P. Ord. XI of 1970, dated 20 April 1970. Published by Punjab Laws Online at http://punjablaws.gov.pk/laws//246.html and accessed 30 August 2011.

Name of Act

Ordinance No. LIII of 2001, An Ordinance further to amend certain laws relating to workmen’s compensation, payment of wages, mines maternity benefit, social security, workers share in companies profits, workers welfare and old-age benefits. Published by the Gazette of Pakistan, Islamabad, 6 October 2011, and accessed at http://paksearch.com/Government/TAX/SROs/Miscellaneous/2001/noti-misss.htm on 30 August 2011.

Other source used

Homepage of the Sindh Government, Wages Board

Other source used

Other source used

Labour Policy 2010, Government of Pakistan, available at http://www.eobi.gov.pk/announcement/labour+poilcy+2010.pdf and accessed 13 September 2011

LEGAL DEFINITIONS


Employee/worker

Worker means any person, including an apprentice, employed in any industry to do any unskilled or skilled, intellectual, technical, clerical or manual work, including domestic work, for hire or reward. However, it does not include:
(i) employees of the Federal or Provincial Government,
(ii) workers in coal mines in respect of whom minimum wages may be fixed under the Coal Mines (Fixation of Rates of Wages) Ordinance 1960, and
(iii) agricultural workers.
Minimum Wages Ordinance 1961 2(9)

Employer

Employer means any person who employs, either directly or through another person, whether on behalf of himself or any other person, any person for whom a minimum rate of wages may be declared under the Minimum Wages Ordinance, and includes:
(i) in a factory - a managing agent or other person with ultimate control over the affairs of the factory; and
(ii) in other cases - any person responsible to the owner for the supervision and control of workers or payment of their wages.
Minimum Wages Ordinance 1961 2(4)

Wage

Wages means all remuneration capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of their employment or of work done in such employment but does not include:
(i) any contribution paid by the employer in respect of such person under any scheme of social insurance or to a pension fund or provident fund;
(ii) any travelling allowance;
(iii) any sum paid to defray special expenses;
(iv) any sum paid as annual bonus; or
(v) any gratiuity payable on discharge.
Minimum Wages Ordinance 1961 2(8)

MINIMUM WAGE FIXING


Procedure


Procedure in general

There are two procedures for setting minimum wage rates. One, established under the Minimum Wages Ordinance 1961, provides for minimum wage setting at the provincial level and following recommendations from a Provincial Minimum Wage Board. The other, established under the West Pakistan Minimum Wages Ordinance 1969, is the basis for a centralised minimum wages setting procedure which does not require government consultation of social partners.
Minimum Wages Ordinance 1961
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969
Labour Policy 2010

Government decides alone

The West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 provides that the minimum wage rates for unskilled workers will be unilaterally declared by provincial governments, without any requirement that social partners will be consulted. However, the Government of Pakistan Labour Policy 2010 suggests that minimum wages for unskilled workers are coordinated nationally after tripartite consultation at the Pakistan Tripartite Labour Conference (16th February, 2009) and at Provincial Tripartite Committees.
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 2(d), 3, Schedule
Labour Policy 2010 ppiii, 3, 4

Government decides after tripartite or bipartite body discussions/recommendations

Under the Minimum Wages Ordinance 1961, Provincial Minimum Wages Boards are to recommend to Provincial Governments the minimum wage rates for:
1) unskilled and juvenile workers in that region; and
2) skilled workers in any industry within the region for which no adequate machinery exists to effectively regulate wages.

Provincial Minimum Wages Boards shall consist of a Chairman, on independent member, one member to represent the employers of the Province and one member to represent the workers of the Province. However, when the Provincial Minimum Wages Board is setting minimum rates of wages for a particular sector, the Board’s members will be further supplemented by two additional members: one representing the employers connected with the industry concerned and the other representing the workers engaged in that industry.

Upon the recommendation of the Provincial Minimum Wages Board, the Provincial Government may either:
(i) declare the minimum wages rate in accordance with the recommendation received by notification in the official Gazette; or
(ii) if it considers that the recommendation is inequitable to employers or workers, refer it back to the Board within 30 days for reconsideration with such comments and information as the Government may think fit to provide.

Where the recommendation is referred back to the Board, the Board shall reconsider its recommendation taking into account the comments made and information provided by the Government and, if necessary, shall hold further enquiry. It will then submit to the Government either:
(i) a revised recommendation, or
(ii) a report stating that it considers no revision is called for, and the reasons therefor.

Upon receipt of the revised recommendation or report, the Provincial Government may declare, by notification in the official Gazette, the minimum rate of wages to be those recommended by the Provincial Minimum Wages Board, subject to such modifications and exceptions as may be specified in the notification.
Minimum Wages Ordinance 1961 3, 4, 5, 6
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Criteria


Cost of living

The cost of living is to be considered by provincial wages boards.
Minimum Wages Ordinance 1961 7

Economic development

The economic conditions are to be considered by provincial wages boards.
Minimum Wages Ordinance 1961 7

Other provisions

The provincial wages boards are to consider any other relevant factors.
Minimum Wages Ordinance 1961 7

Coverage


Scope

Minimum wage rates set under the Minimum Wages Ordinance, 1961 apply to industrial undertakings across a province by category of worker (namely juvenile or unskilled) or by industry.

Minimum wage rates set under the Minimum Wages for Unskilled Workers Ordinance of 1969 apply to unskilled workers (except apprentices) engaged to work in commercial and industrial establishments across Pakistan wherein fifty or more persons are employed or were employed on any day during the preceding 12 months.
Minimum Wages Ordinance 1961 2(9), 4, 5
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 1(4), 3, 4
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Excluded categories


» Workers

The following workers are excluded from minimum wage protections afforded by the Minimum Wages Ordinance 1961:
(a) persons employed by the Federal or Provincial government,
(b) agricultural workers, and
(c) workers in coal mines in respect of whom minimum wages may be fixed under the Coal Mines (Fixation of Rates of Wages) Ordinance 1960.

The following categories of workers are excluded from the scope of the Minimum Wages for Unskilled Workers Ordinance of 1969:
(a) persons in the service of Pakistan as defined by Article 260 of the Constitution;
(b) skilled workers;
(c) apprentices.
Minimum Wages Ordinance 1961 2(9)
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 1(4), 3, 4

» Sectors

Enterprises, undertakings and installations in the following sectors are excluded from the minimum wage protections of the West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969:
(a) relating to the defence service, civil armed forces, postal, telegraph and telephone services, ports, railways, fire-fighting services, electricity, gas, water-supply, public conservancy and hospitals; and
(c) declared by the Provincial Government to be engaged in a public utility service for the purposes of the 1969 Ordinance.
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 1(4), 2(d)

Specific minimum wage rates


» Specific minimum wage by sector

Under the 1961 Ordinance, the Provincial Minimum Wages Boards may be directed to recommend minimum wage rates for industries for which no adequate machinery exists for effective regulation of wages and the Provincial Government thinks it expedient to fix minimum wage rates for workers in the industry.
Minimum Wages Ordinance 1961 5

» Specific minimum wage by region

Minimum wage rates set under the 1961 Ordinance are set by province.
Minimum Wages Ordinance 1961 3

» Minimum wage levels for specific categories of workers


» Trainees

The Apprenticeship Rules 1966 provide that apprentices receive a guaranteed minimum wage rate. This rate begins at 50% of a regular workers’ wages for the first year of the apprenticeship and increases each year. After 3 years of apprenticeship, the apprentice is entitled to the same minimum wage rate as a regular worker.
Apprenticeship Rules 1966 24
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» Youth

Under the 1961 Ordinance, Provincial Minimum Wages Boards may recommend specific minimum wage rates for juvenile workers.
Minimum Wages Ordinance 1961 4
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» Piece-rate workers

When making recommendations to the Provincial Government, Provincial Minimum Wages Boards may specify minimum wage rates for piece work and minimum time rates for piece-rate workers.
Minimum Wages Ordinance 1961 5(2)(a)(ii), 5(2)(b)

Level


Minimum wage level(s) in national currency

The national rate for unskilled workers in Pakistan is Rs. 7,000 per month.
Labour Policy 2010 p4 (para 13)

Last minimum wage update

2010
Labour Policy 2010

In-kind allowances

The 1961 and 1969 Ordinances and the Payment of Wages Act 1936 all impose restrictions on the amount that can be deducted from the minimum wage rate.
Minimum Wages Ordinance 1961 9
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 3
Payment of Wages Act 1936 7

Rate of payment


» Monthly

Every person responsible for the payment of wages under s3 of the Payment of Wages Act 1936 shall fix wage-periods in respect of which such wages shall be payable. No wage-period shall exceed one month.
Payment of Wages Act 1936 4

Scheduled frequency of adjustment

Under the 1961 Ordinance, the Minimum Wages Boards are not to review minimum wage recommendations earlier than one year after it was made or later than three years from that date. There is no equivalent specification in relation to minimum wage reviews for unskilled workers under the 1969 Ordinance.
Minimum Wages Ordinance 1961 7
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969

Enforcement mechanisms


Labour inspection

Government may appoint such persons as it thinks fit to be Inspectors of the purposes of the Minimum Wages Rules. The inspector has the power to enter at any time any premises which an employer or workers to whom minimum rates of wages fixed unter the ordinance apply, carries on his business and to examine any person whom he has reasonable cause to believe to have been a worker to whom minumum rate of wage applies.
West Pakistan Minimum Wages Rules 1962 21, 22

Fines in national currency for non-respect of legislation

An employer who fails to pay employees at the minimum wage rate stipulated by the provincial government under the 1961 Ordinance shall be fined up to Rps 500. An employer who fails to pay employees at the minimum wage rate stipulated by the provincial government under the 1969 Ordinance shall be fined up to Rps 2,000.

Employers who breach the payment requirements of the Payment of Wages Act 1936 will be liable for a fine of up to Rps 500 or 200, depending on the nature of the contravention.
Minimum Wages Ordinance 1961 9(3)
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 7
Payment of Wages Act 1936 20

Other penalties

Persons who fail to pay minimum wage rates in accordance with either the 1961 or 1969 Ordinance may be punishable by imprisonment of up to 6 months.
Minimum Wages Ordinance 1961 9(3)
West Pakistan Minimum Wages for Unskilled Workers Ordinance 1969 7
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Results generated on: 20th September 2018 at 05:47:19.

 
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