New Amendments in Pakistan’s Employees Act: Age-Based Criteria Introduced September 2024

New Amendments in Pakistan’s Employees Act: Age-Based Criteria Introduced

The Government of Pakistan has recently proposed an important amendment to the Employees’ Act of 1986, introducing a new age-based criterion for employee retention. This change could have significant implications for both public and private sector employees, particularly in terms of institutional relocations and severance packages.

Overview of the Amendment

On 10th September 2024, the Cabinet Division issued a circular (No.10-02/2024-Min-II), detailing the proposed amendments to the Employees Act 1986. This notice was officially issued from the Cabinet Secretariat, Islamabad, under the signature of Cabinet Secretary Kamran Ali Afzal. The amendment introduces a significant change: only employees aged between 35 and 50 years will be retained during the relocation of institutions. Employees outside this age range (i.e., younger than 35 or older than 50) will be retired with a "golden handshake", receiving a severance package as compensation for their dismissal.

This circular builds on a prior notice, dated 6th September 2024, which first outlined the need for amendments in the Employees Act of 1986.

Objectives Behind the Change

The primary goal of this amendment is to ensure a balanced workforce, retaining employees in a specific age range who are experienced but still have many active working years ahead of them. The government hopes this will stabilize the workforce during periods of institutional relocation while offering fair compensation to those who are forced into early retirement or dismissal.

Concerns About Age Discrimination

While the proposed change seeks to streamline the workforce, it has raised concerns over age discrimination. Forcing employees younger than 35 or older than 50 into retirement, even with a severance package, could disrupt their career trajectories and affect their long-term financial stability. Critics have also pointed out that this policy may disproportionately impact certain segments of the workforce, particularly those nearing retirement age or in the early stages of their careers.

Conclusion

As this amendment awaits final approval from the Prime Minister, it represents a significant shift in the employment landscape in Pakistan. While the severance packages offer some financial support to dismissed employees, the broader implications of this policy on workforce age diversity and career progression will likely continue to spark debate.

For now, both public and private sector employees are preparing for the potential impact that this policy could have on their careers and the institutions they serve.