The [Provincial] Employees Social Security Ordinance 1965 – Overview and Legal Insight (Pakistan)

Introduction to the Social Security Ordinance 1965

The [Provincial] Employees Social Security Ordinance 1965 is a landmark piece of legislation in Pakistan that aims to provide social protection to employees in the formal sector. Initially enacted as a federal law, it has now been devolved to the provinces after the 18th Amendment to the Constitution of Pakistan, making it a provincial subject. This Ordinance ensures that employees are compensated and supported during events like sickness, injury, maternity, and even death, thereby safeguarding the welfare of the working class.

Each province now administers this law through its own social security institution — for example, PESSI in Punjab, SESSI in Sindh, and similar bodies in other provinces. Employees Social Security Ordinance 1965 

Purpose and Objectives of the Ordinance

The primary purpose of the Social Security Ordinance, 1965 is to protect employees against socio-economic risks arising from their employment. It provides for various benefits funded through contributions from employers. The Ordinance covers:

• Medical care

• Sickness benefits

• Injury benefits

• Maternity benefits

• Disability pensions

• Survivors’ pensions

By offering these benefits, the law plays a critical role in reducing the financial burden on employees and their families in times of hardship.

Coverage and Applicability

The Ordinance generally applies to industrial and commercial establishments where five or more workers are employed. However, in some provinces, this threshold may vary based on local amendments. The law typically covers:

• Permanent, contractual, and daily wage employees

• Workers earning up to the prescribed wage limit (which may change periodically)

• Employees engaged in both private and certain public sector organizations

It is the responsibility of the employer to register their employees with the relevant provincial social security institution and ensure timely payment of contributions.

Employee and Employer Contributions

Under the Ordinance, employers are required to make monthly contributions on behalf of their employees. These contributions are calculated as a percentage of the employee’s wages (usually around 6%). Employees themselves do not contribute directly under this scheme.

Failure to comply with the contribution requirements can result in penalties, fines, and legal action by the provincial social security institution.

Benefits Offered Under the Ordinance

The following benefits are provided to insured employees and their dependents:

• Medical Care: Free medical treatment through designated social security hospitals, clinics, and dispensaries.

• Sickness Benefit: Financial compensation during certified medical leave due to illness.

• Maternity Benefit: Paid leave and medical support for insured women during pregnancy and postnatal period.

• Employment Injury Benefits: Coverage for injuries or disabilities caused during employment.

• Invalidity Pension: Monthly pension if the worker is permanently disabled.

• Survivors’ Pension: Monthly support for the family in case of the worker’s death.

These benefits significantly contribute to improving the health, safety, and financial stability of employees and their families.

Administration and Enforcement

The Ordinance is administered by Provincial Employees Social Security Institutions (PESSI, SESSI, BESSI, etc.), depending on the province. These institutions are responsible for:

• Registration of employers and employees

• Collection of contributions

• Provision of healthcare and benefits

• Inspection and enforcement of compliance

They operate under the supervision of provincial governments and maintain dedicated hospitals and dispensaries for insured persons.

Conclusion

The [Provincial] Employees Social Security Ordinance 1965 remains a cornerstone of labor welfare legislation in Pakistan. By offering medical, financial, and pension benefits, it enhances the quality of life for millions of workers. In the post-18th Amendment era, provinces have more autonomy in tailoring social security systems to local needs. However, the core purpose of the Ordinance—protecting the workforce—remains unchanged. Employers must ensure compliance, while employees should be aware of their rights under this important law.