Is severance pay provided under the labor laws in Pakistan?
In accordance with the provisions of Standing Orders Ordinance, a worker whose employment has been terminated for any reason other than misconduct is entitled to a “severance pay or gratuity” which is equivalent to 30 days’ wages for every completed year of service or any part thereof in excess of 6 months (e.g., five years and 8 months is counted as 6 years). An employer may substitute a provident fund (type of pension) for gratuity.