Workers Compensation and Sick Leave Benefits in Pakistan
What are the laws in Pakistan that deal with matters related to workers’ sickness i.e., sick leave, sickness benefits etc?
Following are the laws in Pakistan which pertain to the issues of sickness leaves, benefits and compensation of workers in cases of accidents or injuries:
- The Workmen's Compensation Act, 1923 (applicable in ICT, Sindh & Balochistan)
- The Workmen's Compensation Act, 1923 (adapted by the province of Punjab through Amendment Act of 2013)
- The Khyber Pakhtunkhwa Workers’ Compensation Act, 2013
- Provincial Employees Social Security Ordinance, 1965 (applicable in ICT, Sindh, KPK, and Balochistan)
- Provincial Employees Social Security Ordinance, 1965 (adapted by the province of Punjab through Amendment Act of 2013)
- Industrial and Commercial Employment (Standing Orders) Ordinance, 1968
- Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (adapted by the province of Punjab through Amendment Act of 2012)
- The Khyber Pakhtunkhwa Industrial And Commercial Employment (Standing Orders) Act, 2013
The Sindh Terms of Employment (Standing Orders) Act, 2015
The Sindh Workers’ Compensation Act, 2015
The Workmen's Compensation Act, 1923 (including its Provincial variants) is applicable to all types of establishments (industrial or commercial), railways, mines, employing 10 or more workers, and many others like road transport services. (For details on application of this act, please see Schedule II of this Act). The Provincial Employees Social Security Ordinance, 1965 (including its Provincial variants) is applicable to the permanent, daily wages, contract and even contractor employees of industrial, commercial and other establishments employing 5 or more workers whose wages are up to PKR 15,000 (limit raised to PKR 18,000 in Punjab); however an employee will still remain an employee under the definition of this act even when his monthly wages exceed PKR 15,000 (PKR 18,000 in Punjab). This Act is not applicable on the persons in the service of the State, including members of the Armed Forces, Police Force and Railway servants, persons employed in any undertaking under the control of any Defense Organization or Railway Administration, persons in the service of a local council, a municipal committee, a cantonment board or any other local authority; any person in the service of his father, mother, wife, son or daughter, or of her husband; and those employees with wages exceeding PKR 15,000 per month. The Standing Orders Ordinance 1968 (including its Provincial variants) is applicable to all the industrial or commercial establishments (especially its section 10-B; section 13 under KPK law) where fifty or more workers have been employed on any day during the preceding twelve months.
What are the benefits provided under workers compensation and sick leave laws?
Under the Workers Compensation Act, 1923 an employer has to compensate his employees for injuries by accident. If death or permanent and total disablement of a worker results from the injury, the employer has to pay the dependents of that employee a sum of PKR 200.000 (limit raised to PKR 300,000 in KPK, PKR 400,000 in Punjab and PKR 500,000 in Sindh). Before the 2007 amendment in the law, the payment of compensation was wage dependent i.e., employees earning below PKR 6000 were entitled to receive benefits due to injury or disability caused by an accident arising out of and in the course of employment. However, it is no longer wage dependent and all the employees, irrespective of their monthly wage, will get this benefit. The social security law replaces earnings by 75% in all the provinces (except Punjab where replacement rate is 100%) for a loss of earning capacity of 67% or more. If the injury results in loss of earning capacity of up to 66%, the benefits are paid in accordance with the provisions of law (please see Employee Social Security (Benefit) Regulations, 1967). This is also called disablement pension in the law and it terminates only with the death of the recipient, or when disablement ceases or ceases to be total or partial disablement. (Section 40)
In the case of temporary disablement, whether partial or total, the workers compensation act provides for a half monthly payment for a period of one year (at most) or for 1/3 of the monthly wages for 5 years at most in case of chronic lung diseases. On the other hand, the social security law provides for temporary disability benefit (also called injury benefit in section 39 of Provincial Employees Social Security Ordinance), which is equal to 60% of the earnings in Khyber Pakhtunkhwa and Balochistan while with 100% earning replacement in Punjab and Sindh. The benefits are paid after a 3-day waiting period (which is waived in Punjab) for up to 180 days.
As for the Standing Orders Ordinance, it requires all the industrial and commercial establishments with 50 or more employees to have all its permanent workers insured against natural death and disability and death and injury arising out of the contingencies not covered by the Workers Compensation Act, 1923 and Provincial Employees Social Security Ordinance, 1965 (provision of group insurance…. please see section 10-B of this Ordinance; section 13 under KPK law). Each permanent worker has to be insured against at least the amount that has been provided in schedule four of the Act i.e. PKR 200,000 (limit raised to PKR 300,000 in KPK, PKR 400,000 in Punjab and PKR 500,000 in Sindh). Moreover, it is the responsibility of employer to pay premiums and no contributions are to be made by employees. If an employer fails to have a permanent workman employed by him insured and such workman suffers death or injury arising out of contingencies mentioned in the law, , the employer is liable to pay the above referred sums of money in the case of injury (to the worker) or death (to heirs).
What are the qualifying conditions under these laws?
The Workers' (Workmen's) Compensation Act, 1923 (including its Provincial variants) makes an employer liable for compensation if the injury is caused to a worker by an accident “arising out of and in the course of his employment” (Section3). The term “arising out of and in the course of employment” is quite important in this context and a worker claiming compensation under the Act must prove that the accident arose out of his employment i.e. his employment was the main cause of his injury and that this accident occurred in the course of his employment. For example, if an employee meets an accident while coming to the office by pick and drop service provided by the employer, this accident would be taken as have occurred in the course of employment while on the other hand, if he is coming on his own conveyance and meets an accident, it is not the obligation of employer to pay him compensation.
The law also provides for certain exceptions. The employer has no liability for an injury that results in total or partial disablement lasting for less than four days. Employer also has no liability for injuries if the worker was drunk at the time of total or partial disablement, if the worker willfully disobeyed the orders or safety rules and if he willfully disregarded the safety guard or other device provided for safety of workers.
How can a worker get remedy under the Workers' Compensation Act?
In accordance with section 3(5) of the Act, a worker has three alternate remedies:
- either he may sue his employer for damages in ordinary civil court,
- he may proceed under the Act and institute a claim to compensation before a (workmen compensation) commissioner
- make an agreement with the employer for providing the compensation for injury in respect of the provisions of this Act.
However, if he accepts to adopt the any of the later two measures, any suit for damages will not be maintainable in any court of law. While if he adopts the first option (i.e. suing in an ordinary civil court), he will surrender his right to sue under the Workers Compensation act.
What are the occupational diseases mentioned in Workers Compensation Act?
Schedule 3 of the Act provides a list of occupational diseases which includes Anthrax, compressed air illness or its sequelae, poisoning by lead tetra-ethyl, poisoning by nitrous fumes, lead poisoning and its sequelae, phosphorous poisoning, mercury poisoning, poisoning by benzene and its homologues, chrome ulceration, arsenical poisoning, pathological manifestation due to radium and other radioactive substances, and X-rays, Primary cancer of the skin and Silicosis. Other than accidents, workers can be totally or partially disabled due to certain occupational disease like anthrax. It is also important to remember that if a worker, who has been employed in any employment specified in section B of the Schedule III for at least 6 months, and contracts any disease considered as occupational diseases, this will be considered an injury by accident arising out of and in the course of employment. Provincial governments, through notification, can also declare other employments with its occupational diseases.
What are the provisions of Provincial Employees Social Security Ordinance?
Chapter 5 of the Ordinance provides for various types of benefits which include sickness benefit, maternity benefit, death grant, medical care (for self and dependents), injury benefit, disablement pension, disablement gratuity, survivor’s pension.
A secured person (for whom at least 90 days of contribution have been paid in the last 6 months) is entitled to receive the sickness benefit throughout the period of sickness. In cases of tuberculosis and cancer, a secured person has to be provided with 100% of the wages (50% of the wages in Khyber Pakhtunkhwa and Balochistan) for 365 days in a period of one year. While if a person is suffering from any other disease, he has to be paid 75% of his wages (50% of the wages in Khyber Pakhtunkhwa and Balochistan) for 121 days only in a period of one year.
A secured woman (for whom at least 180 days of contribution have been paid in the last 12 months immediately preceding the expected date of her confinement) is entitled to her full remuneration (100% wage replacement) for 12 weeks of maternity leave. At most six of these 12 weeks precede the expected date of confinement. For more information, kindly refer to the section on maternity leave.
If a secured person dies while in receipt of sickness benefit, injury benefit or medical care, his survivors are entitled to a death grant equal to the daily rate of sickness benefit multiplied by 30, but it should not be less than PKR 1500. This can also be termed as funeral expenses.
The law also provides for iddat benefit for a secured woman whose husband dies. The employer has to provide iddat benefit equal to the rate of her wages during iddat period. Moreover, the employer can’t refuse leave for the period of iddat and can’t discriminate against a woman on this basis.
Note: Iddat/waiting period is an Islamic law concept where a woman has to stay in one house for a specified period of time and it is not permissible for her to go elsewhere before expiration of this period. Iddat is required upon the death of husband, termination of marriage contract through divorce or Khul’a or annulment of the marriage contract through some other manner. Iddat period is different for different circumstances. In case of husband’s death, it is four months and ten days (Surah Baqarah/The Cow: Verse 234).
Medical Care for Self and Dependents:
The law also provides for medical care during sickness (for self and dependents) and maternity (for self only). Benefits include general medical care, specialist care, medicines, hospitalization and maternity care. The law also provides for medical care to the dependents for a period of one year after the death of a secured person (but that person must have been in continuous employment for a period of at least one year before his death). If the secured person was a seasonal employee, his dependents can receive the medical care for a period of 6 months after his death.
We have already discussed injury benefits (also called temporary disability benefits) which are payable up to the maximum of 180 days.
The survivors’ pensions, after death of a worker due to an employment injury, are payable to each of the dependents in accordance with the provisions of section 42 of the ordinance, subjecting it to the maximum of the rate of total/permanent disablement pension which would have been payable to the secured/deceased person. (we have already described the benefit rates for permanent disability)
The law requires payment of 60% of the deceased’s total disablement pension to the widow/widows or a needy widower.
Each orphan younger than age 21 receives 20% of the total disability pension (no age limit for unmarried daughters) while a full orphan receives 40% of the disability pension.
If a secured person has not left a widow, a widower, dependent children, each parent will receive 20% of the deceased total/permanent disability pension (for life).
It is important to remember that maximum survivor pension can’t exceed the total disablement pension due to the secured person.
Survivor pensions are payable on the death of a secured person and terminate on the death of a survivor (in case of widow, widower, parents, unmarried daughter), upon a widow’s remarriage and attaining the age of 21 years (this age limit is only for male child and not for unmarried daughters).
Are there any provisions in the law regarding job security and non-discrimination?
Section 72 of the Provincial Employees Social Security Ordinance, 1965 (including its Provincial variants) requires that no employer shall dismiss, discharge, reduce or otherwise punish an employee during the period in which an employee is in receipt of sickness/maternity or injury benefit or medical care. The law also requires the employer not to discriminate a woman on iddat/waiting period.
Section 42 of the Khyber Pakhtunkhwa Workers’ Compensation Act, 2013 provides that there shall not be any discrimination on the basis of sex, religion, sect, colour, caste, creed, or ethnic back ground in considering and disposing of issues relating to compensation, in the event of injury or, death, to the workers or, their legal heirs.
Similarly, section 10 of the Khyber Pakhtunkhwa Industrial And Commercial Employment (Standing Orders) Act, 2013 guarantees that no discrimination shall be made on the basis of sex, religion, political affiliation, sect, colour, caste, creed, or ethnic background in considering and disposing of issues (compulsory group insurance or benefits in the current case).
You can also send us your compliant form on the following address:
Workers Employers Bilateral Council of Pakistan,
A-198, Block-13, Behind Jofa Towers,
Gulshan-e-Iqbal, Off Main University Road, Karachi