Hospitality Industry in Pakistan

Following pieces of legislation are applicable to Hospitality industry operating in Pakistan:

(a) West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968;

(b) Industrial and Commercial Employment (Standing Orders) Ordinance VI of 1968;

(c) Industrial Relations Act 2008;

(d) Pakistan Hotels and Restaurants Act 1976;

(e) Industrial Relations Ordinance 2002;

(f) National Industrial Relations Commission (Procedure and Unions) Regulation 1973;

(g) Industrial Relations Ordinance 1969;

(h) West Pakistan Shops and Establishment Ordinance of 1969;

(i) Payment of Wages Act 1936

Query #1: Maximum number of overtime hours, a non-management (Waiter, attendant gardener etc.) associate can provide in a month’s time?

Ans. The general rule is provided under section 8 of the West Pakistan Shops and Establishment Ordinance of 1969. It provides as follows,

“…Save as otherwise expressly provided in this Ordinance, no adult employee shall be required or permitted to work in any establishment in excess of nine hours a day and forty-eight hours a week, and no young person in excess of seven hours a day and forty-two hours a week…”

Therefore the general rule is that no adult can work in any establishment for than 9 hours a day or forty-eight hours a week. A young person i.e. (Under 17years of age but over 14years) cannot work for more than seven hours a week or more than 42 hours a week.

With respect to overtime, the law provides that,

“… Provided that in any day or in any week, in which there occurs stock-taking, making up of accounts, settlement or such other business operation, and during such other period, as may be prescribed, an adult employee of an establishment may be required or permitted to work over-time in such establishment for more than nine hours in such day and for more than forty-eight hours in such week, and a young person for more than seven hours in such day and for more than forty-two hours in such week, but so that the total number of hours so worked by an adult does not exceed [six hundred and twenty four hours] and [four hundred and sixty eight hours] by a young person in any one year…”

Including overtime, adult cannot work more than 60 hours in a week and working hours cannot exceed 624 hours per year. Overtime needs to be spread out and cannot be more than 12 hours every day.

Query #2: Can an employer allow compensatory leave in lieu of overtime hours performed by the associate?

Ans. Your question is slightly ambiguous. If you mean that whether employer can provide leave or holiday in leu or as a result of employee having worked overtime, then the answer is that you must pay the overtime wages as per law. The law doesn’t provide that you can give a leave instead of overtime wages. Note, that the employer must provide one compensatory holiday after 10 consecutive days of work. An employer cannot make an employee work for more than 10 consecutively days without a holiday. With respect to over time wages, the law provides,

“…When any employee is required to work over-time in any establishment, as provided in the proviso to section 8, the wages payable to such employee in respect of such over- time work shall be calculated at double the ordinary rate of wages payable to him…”

Also note, no overtime shall be payable to the contract worker employed on piece rate basis.

Query #3: Is there any legal clause or case that bounds an employer to pay only overtime to the non-management associates?

Yes. You are under no obligation to pay overtime wage rate to staff working in clerical or executive capacity.

Query #4: In light of hospitality or commercial act, can you please share all the legal obligations from employer’s end?

Some of the important legal obligations imposed on employers are as follows:

(a) If the employer wants an employee to work overtime, he/she must be given a rest interval of 1 hour (after 8 normal working hours+1 hour for lunch and prayer). Employee cannot be compelled to work more than 2 hours overtime a day. Total yearly overtime work hours should also not exceed 624 hours;

(b) Where an employee is a woman, she can work only up to 10:00 pm and on condition that employer arranges transport for pick up and drop facility;

(c) During the month of Ramazan, working hours are reduced by two hours in all establishments. Notifications are also issued in this regard. Women workers are not allowed to work more than 9 hours in any day (this included lunch and rest);

(d) The employee is under obligation to work overtime when required unless there exists sufficient cause/reason regarding inability to perform overtime work;

(e) An employer can not compel a worker to work for than six hours without providing an hour of rest interval;

(f) Where employer wants employee to work for more than eight and a half hours, the employer must give two intervals each of half an hour;

(g) Workers are entitled to 1 day of rest per week (24 consecutive hours). The weekly rest day is usually Sunday. If a worker has to work on holiday; he can’t be made to work consecutively for 10 days without being given a compensatory holiday for full one day. (Section 35 of Factories Act)

There are numerous other obligations, which are imposed on the Employer, however, for purposes of this opinion, we have kept ourselves only limited these important ones. We would be happy to provide a general opinion detailing all the obligations if we are so instructed.