Workers' Compensation Act
A federal law requiring employers to compensate workers, or their dependents, for injury, disability, or death from workplace accidents.
Overview
One of Pakistan's oldest labour laws, inherited from British India, the Workmen's Compensation Act 1923 requires employers to pay compensation for injuries, permanent disability, or death sustained in the course of employment. Compensation is generally payable regardless of employer fault, and the amount is calculated from the worker's wages and the severity of the injury. It predates, and still works alongside, more modern social security and OSH legislation.
Key points
- Covers death, permanent disability, and temporary disability arising from workplace accidents
- Compensation amounts are based on the worker's wages and the assessed degree of disability
- Payable in most cases without needing to prove employer negligence
- Operates alongside, not instead of, newer social security and OSH laws
Who this applies to
Employers across industries covered by the Act; HR and HSE teams need clear processes for reporting incidents within the timelines the Act requires.
Frequently asked questions
Does the worker have to prove the employer was negligent?
No, compensation is generally payable for accidents arising out of and in the course of employment, regardless of fault.
Is this the same as Employees' Old-Age Benefits or Social Security?
No, those are separate schemes. The Workmen's Compensation Act specifically addresses accident-related injury and death compensation.
How is the compensation amount worked out?
It's based on a formula involving the worker's monthly wages and the assessed degree of disability, or a fixed multiple of wages in fatal cases.
What should an employer do right after a workplace injury?
Report it promptly under the Act's notice requirements, since delayed reporting can affect how the claim is handled.
Need help interpreting how this applies to your organization?
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