Skip to content. | Skip to navigation

You are here: Home / Labour Laws / Social Security / Workers Welfare Fund
 

Workers Welfare Fund

Workers Welfare Fund” is a federally managed fund, under the administrative control of Ministry of Human Resource Development. It is an autonomous organization, run by a governing body with representation from all tripartite partners.

What are the laws relating to worker welfare in Pakistan?

The laws relating to workers welfare include:

  1. Employees’ Old Age Benefit Act, 1976
  2. Provincial Employees Social Security Ordinance, 1965
  3. Workers Welfare Fund Ordinance, 1971
  4. West Pakistan Maternity Benefits Ordinance, 1958
  5. Workers Children (Education) Ordinance, 1972
  6. Companies Profit (Worker’s Participation) Act, 1968
  7. Workers Compensation Act, 1923

However, this article focuses primarily on Workers Welfare Fund Ordinance promulgated in 1971.

What is the Workers Welfare Fund?

“Workers Welfare Fund” is a federally-managed fund, under the administrative control of Ministry of Human Resource Development. It is an autonomous organization, run by a governing body with representation from all tripartite partners i.e., government, employers and workers.

Workers Welfare Fund was established under the Workers Welfare Fund Ordinance, 1971 to start various initiatives for workers’ welfare like provision of low cost residential accommodation and other amenities including education and health facilities.

Besides, it is responsible for managing the “fund” placed at its disposal under the Ordinance (collected through contributions from various establishments); investment of this fund and using of income, accrued through fund resources for various workers’ welfare initiatives.

What are the Workers Welfare Boards?

Workers Welfare Boards operate in the provinces and these are established under the above-mentioned Ordinance for expanding the ambit of worker welfare activities under the Fund. The main functions of the Provincial Workers Welfare Boards are:

  1. Construction of residential colonies for the industrial labor
  2. Construction of schools for the children of industrial labor
  3. Construction of Dispensaries for industrial labor
  4. Construction of Drinking water supply schemes
  5. Provision of educational scholarships to workers’ children
  6. Provision of Marriage Grant (Jahez Fund) for the workers' daughters (and female workers themselves)
  7. Provision of Death/Funeral Grant to the family of a deceased industrial labor

What is the applicability of this law?

In the wake of amendments made through Finance Acts of 2006 and 2008, this law is applicable to every industrial establishment and all other establishments to which Shops and Establishments Ordinance 1968 is applicable, whose total annual income exceeds Rs. 500,000 in a year.

Many firms in the private sector had challenged these amendments in the Court and last year both the Punjab and Sindh High Courts have struck down these as unconstitutional.

What is the rate of contribution under this Ordinance?

Every establishment whose total income in a year is not less than Rs. 500,000 (earlier Rs. 100,000) must pay to the Workers Welfare Fund a sum of two percent (2%) of its total income as is assessable under the Ordinance. The assessment of income is made in accordance with income tax returns deposited under the Income Tax Ordinance.

Can this contribution be enhanced or reduced?

The federal government can enhance this contribution if it receives such recommendations from the provincial governments.

Similarly, it can also cancel or reduce the contribution due from an establishment after considering its case.

Who is eligible for benefits under the Ordinance?

Every industrial labor is eligible for benefits under the Ordinance. This holds true even when your organizations is not paying contribution to the Fund (in the event that it is making losses). However, eligibility conditions vary for different types of benefits.

What is a marriage/wedding grant (Jahez Fund)?

Marriage Grant under the Workers Welfare Fund provides a handsome amount of money to a worker for marriage of his/her daughter. After an announcement made by the Prime Minister on May Day 2012, the marriage grant has been increased from Rs.70,000 to Rs.100,000. A female worker may also avail this benefit on her own marriage (once in life time). There is no limit on the number of daughters of an industrial worker that can avail the wedding grant. There is no pay limit for the workers to receive this benefit, however, the worker must have 3 years of continuous service. Moreover, the industrial worker must be registered with EOBI and Social Security Institutions.

What is Death Grant?

Under the Workers Welfare Ordinance 1971, a death grant is provided to the family of deceased worker in order to provide them with some financial support in hour of bereavement and grief. After the announcement made by the Prime Minister on May Day 2012, the death grant has been increased from Rs. 150,000 to Rs. 500,000. As above, the worker must be registered with EOBI and Social Security; however this condition is not mandatory for mine workers. There is also no pay or service limit for provision of this grant.

Are you getting minimum wage and overtime rates as notified by the Government?  You can now inform us about the minimum wage violations at your workplace by submitting a complaint form. With your information, Workers Employers Bilateral Council of Pakistan (WEBCOP) and Wage Indicator Pakistan will sort out the matter between you (trade union, workers) and the Employer. Complaint forms are available in PDF and online version.

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