The Industrial and Commercial Employement Ordinance 1968

About the Ordinance

The ordinance provides guidelines to employers relating to the terms and conditions of employment in respect of the workers employed to do any skilled or unskilled or clerical work for hire or reward in an establishment. It also covers the disciplinary process to be invoked by an employer in case; a worker was accused of committing misconduct as prescribed in the ordinance.

Collective Agreement: The collective agreement is a written document between employers and trade union or representatives of workers to specify the conditions of employment

Application of Ordinance: This ordinance applied to commercial or industrial establishment having twenty or more workers employed. Types of workers and their definition in a commercial or industrial establishment are:

  • Permanent: A workman who has been engaged on work of permanent nature likely to last more than nine months.
  • Probationer: A workman employed to fill a permanent vacancy in a post and has not completed three months service.
  • Badli Worker: A workman who is appointed in the post of a permanent workman or probationer, who is temporarily absent.
  • Temporary Worker: A workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a period not exceeding nine months.
  • Contract Worker: A workman who works on contract basis for a specific period of numeration to be calculated on piece rate basis.

Standing Orders of the Ordinance: The important features of standing orders through “The Industrial and Commercial Employment (Standing Orders) Ordinance, 1968” are:


1. Tickets: For the purpose of identification of employees, the following steps may be taken by the employer, such as:

  • A permanent identity card be given to the employee mentioning specific department unless he/she is a not a permanent employee
  • A temporary ticket be given to temporary workers while apprentice card be given to every apprentice unless shifted to permanent employee

2. Terms and Conditions of Service: Appointment, transfer or promotion of an employee shall be given in writing showing terms and conditions

3. Publication of Details: The publication of the following details is mandatory on notice boards, such as:

  • The working hours of employees
  • Public holidays 
  • Wage rates 
  • Date of the payment of salary

4. Attendance and Late Coming:  Fixed timings must be observed by the employees as mentioned in the standing orders and any late comers will be liable for deductions in their wages

5. Leaves: Annual leave, casual leave, sick leave, festival holidays be allowed to the employees.

6. Wages Payment: Wages must be paid on a working day within 7 day stipulated expiry of wage period.

7. Group Insurance: Permanent employees must be insured against death and sickness or disability.

8. Bonus: Every employer who makes a profit in the closing year is liable to provide bonus to its employees in addition to wages in the same year.

9. Stoppage of Work: In the event of fire, catastrophe, stoppage of power supply, epidemics or civil commotion, the employer can stop the commercial or industrial establishment while the employees may be informed through a notice boards when practically possible regarding the resumption of working hours or stay inside the establishment.

10. Closure: No employer can close down the commercial or industrial establishment or terminate fifty percent of employees without prior permission of the labor court.

11. Termination of Employment: In case of terminating an employee, the following rules of ordinance must be followed, such as:

  • A permanent worker must be given one month notice while wages of one month be paid on the second day of the termination of the service. Explicit reason for the termination must be conveyed in writing to the employee. The employee can take the employer to labor court in case of non-satisfaction with the reasons in notice.
  • Any temporary (daily, weekly or monthly wager) or Badli worker’s services can be terminated without any prior notice by the employer.
  • In case of downsizing or retrenchment, the last man employed is to be retrenched but preference must be given to him, if the re-employment of the labor force takes place.
  • Permanent employee is liable to be paid the provident fund in his name for the duration of service along with pension benefits (if it applies).

12. Punishments: An employee (permanent and non-permanent) is liable for punishments in case of the following misconducts, such as:

  • Willful disobedience, whether alone or in combination with others, to any lawful and reasonable order of a superior
  • Theft, fraud, or dishonesty in connection with the employer's business or property
  • Willful damage to or loss of employer's goods or property
  • Taking or giving bribes or any illegal gratification
  • Habitual absence without leave or absence without leave for more than ten days
  • Habitual late attendance
  • Habitual breach of any law applicable to the establishment
  • Riotous or disorderly behavior during working hours at the establishment or any
  • Act subversive of discipline
  • Habitual negligence or neglect of work
  • Striking work or inciting others to strike in contravention of the provisions of any law, or rule having the force of law

The Following actions could be taken by employers against employees involved in misconduct, such as:

  • Withholding of increment or promotion for a specified period not exceeding one year
  • Reduction to a lower post
  • Dismissal without payment of any compensation in lieu of notice

In case of the punishment, the employee must be informed through a notice within one month of the misconduct and a

Information about this legislation is also available in the following forms.
Original Document Infographic Animation Presentation اردو

Feedback / Discussion related to this legislation

Responses so far: 0