THE legal landscape governing employee rights in Pakistan is sharply divided between statutory and non-statutory service rules, a distinction that significantly impacts the protection and remedies available to employees. Statutory rules, enacted by legislative bodies, provide a comprehensive legal framework covering employment terms, conditions and grievance redressal mechanisms.
In contrast, non-statutory rules, formulated internally by employers, serve as part of an employment contract but lack the force of law. Despite outlining key employment aspects such as salaries, allowances, working hours, disciplinary procedures and grievance mechanisms on-statutory rules are often limited in scope and enforceability. Employees governed by these rules, typically referred to as being under the “master-servant” relationship, face considerable challenges when seeking legal recourse, as their rights remain largely subject to employer discretion.
The challenges faced by employees under non-statutory rules are significant. Their employment relationships lack the robust protections granted under statutory frameworks. Disputes arising from these rules often cannot be addressed through legal channels. Instead, affected employees are limited to internal grievance procedures or, in cases of wrongful termination, civil suits for damages rather than reinstatement. This legal predicament dates back to 1956 when the Supreme Court of Pakistan first ruled that employees governed by non-statutory rules are not entitled to constitutional remedies under Article 199 of the Constitution. This ruling has since become a consistent judicial stance, leaving a large portion of the workforce without adequate protection or recourse. Unlike civil servants and workmen, who benefit from specialized legal protections and tribunals, non-statutory employees remain trapped in a cycle of costly and often fruitless litigation.
A recent case involving the Punjab Provincial Cooperative Bank (PPCBL) has reignited the debate on the rights of non-statutory employees. On April 15, 2024, the Supreme Court upheld a Lahore High Court decision that dismissed petitions from PPCBL employees challenging disciplinary actions. The petitions were deemed inadmissible as the bank’s Staff Service Rules (2010) were non-statutory. The court reaffirmed that the relationship between PPCBL and its employees fell under the master-servant doctrine, limiting the employees’ legal options to internal appeals or civil suits. However, the Supreme Court acknowledged the inadequacy of this colonial-era doctrine in addressing the complexities of modern employment relationships. The court stressed the urgent need for legislative reform to protect employees governed by non-statutory rules and proposed the establishment of a specialized tribunal to handle their disputes.
This judicial call for reform is not new and several attempts have been made in the past as now, with the 2024 judgment, the court has renewed its call for federal and provincial legislatures to address this legal vacuum. The court’s recommendations are clear to establish a dedicated tribunal or court for non-statutory employees to ensure faster and more equitable dispute resolution. Additionally, new laws should balance employer flexibility with employee protection, minimizing the discretionary power employers currently hold over non-statutory rules. By enacting these reforms, Pakistan can modernize its labour laws, replacing outdated master-servant principles with fairer, more balanced protections. Legislative action is urgently needed to safeguard the rights of this vulnerable workforce segment, offering them accessible and effective avenues for justice.
—The writer is a Legal Scholar, Academic Manager and Instructor at a Public Sector University.
