Termination, Resignation or Retirement
Employment dynamics involve various phases, and three significant events that mark the conclusion of an employment relationship are termination, resignation or retirement and Employer for the Record makes sure that these events are met within legal framework. Each holds distinct legal implications, rights, and procedures in the context of Pakistani labor laws.
Termination of Employment
Relevant Legislation: Termination of employment in Pakistan is governed by key statutes, with the Industrial and Commercial Employment (Standing Orders), 1968, at its core. Additional regulations include the Industrial Relations Act, 2012, and Provincial Industrial Relations Acts.
Applicability of Standing Orders Ordinance, 1968: The Standing Orders Ordinance applies to industrial and commercial establishments employing 20 or more workers, with potential extensions by provincial governments. Smaller industrial establishments have exemptions based on specific provisions.
Termination Process: Termination can occur due to various reasons such as resignation, dismissal, or redundancy. The process involves adherence to the statutory notice periods, especially for permanent employees. Written termination letters explicitly stating the reasons, as required by the law, are essential.
Grounds for Termination: Employers can terminate employment based on valid grounds, including serious illness, inefficiency, or the financial needs of the establishment. Misconduct, with proper procedure and an opportunity for the employee to respond, is also considered a valid reason for dismissal.
Severance Pay: Workers terminated for reasons other than misconduct are entitled to severance pay or gratuity under the Standing Orders Ordinance. This gratuity is equivalent to 30 days’ wages for each completed year of service or any part thereof exceeding six months.
Resignation
Termination by Employee: Resignation is a voluntary act initiated by the employee, indicating their intent to terminate the employment relationship. It can occur for various reasons, such as pursuing better opportunities, personal circumstances, or dissatisfaction with the current work environment.
Notice Requirements: In accordance with Standing Order 12 of the Industrial and Commercial Employment (Standing Orders), 1968, permanent employees are required to provide and be served with one-month notice before resigning. Temporary workers, badlis, and probationers are exempt from notice requirements.
Retirement from Employment
Termination Due to Retirement: Retirement marks the conclusion of a worker’s active employment, often at a specified age. Employers may have retirement policies in place, and the retirement process involves a planned exit with benefits.
Relevant Laws: While retirement is not explicitly covered by the Standing Orders Ordinance, other laws, such as pension and provident fund regulations, may govern the retirement process.
Retirement Benefits: Employees retiring from service may be entitled to retirement benefits, including pensions or provident funds, as stipulated by the employer’s policies or relevant laws.
