Employment Agreement Template for Pakistan

An Employment Agreement is a legally binding contract between an employer and employee in Pakistan that spells out the key terms of their working relationship. It covers essential details like salary, work hours, job responsibilities, and benefits while following local labor laws including the Industrial and Commercial Employment Ordinance.

This agreement protects both parties by clearly defining expectations, confidentiality requirements, and grounds for termination. In Pakistani business practice, it helps prevent future disputes by documenting important terms upfront, including notice periods, non-compete clauses, and intellectual property rights. Most companies use these agreements for permanent employees, though fixed-term contracts are common for project-based roles.

Use an Employment Agreement when hiring any permanent or fixed-term employee in Pakistan, ideally before their first day of work. This is especially crucial for roles involving sensitive information, specialized skills, or management responsibilities where clear documentation of terms protects both parties.

Having this agreement in place becomes vital during leadership transitions, when expanding teams rapidly, or launching new business units. It helps prevent costly disputes by documenting expectations upfront and ensures compliance with Pakistan's labor laws. Many companies implement these agreements during annual contract reviews, company restructuring, or when updating compensation packages to reflect market changes.

• Startup Employment Agreement: Tailored for early-stage companies, focusing on equity compensation, flexible roles, and growth-oriented terms.
• Offer Letter And Employment Agreement: Combines initial job offer with detailed employment terms, commonly used for professional and managerial positions.
• Dual Employment Agreement: Designed for employees working across multiple entities or roles within the same organization, clarifying responsibilities and compensation from each source.

• Employers/Companies: Draft and issue Employment Agreements through their HR departments or legal teams, ensuring compliance with Pakistani labor laws and protecting company interests.
• Employees: Review, negotiate, and sign these agreements before starting work, gaining clear documentation of their rights, benefits, and obligations.
• Legal Counsel: Review and customize agreement terms, ensure compliance with local regulations, and advise on enforceability under Pakistani law.
• HR Managers: Maintain agreement records, handle updates or amendments, and ensure consistent implementation across the organization.
• Labor Courts: Reference these agreements when resolving employment disputes and enforcing contractual obligations.

• Employee Details: Gather complete personal information, job title, reporting structure, and start date.
• Compensation Package: Document salary, bonuses, benefits, and any performance-based incentives clearly.
• Job Specifics: Define role responsibilities, work hours, location, and any travel requirements.
• Company Policies: Include references to relevant internal policies, code of conduct, and confidentiality requirements.
• Legal Requirements: Ensure compliance with Pakistan's labor laws regarding leave, termination, and notice periods.
• Review Process: Our platform generates custom Employment Agreements that include all mandatory elements while minimizing drafting errors.

• Party Details: Full legal names and addresses of both employer and employee, with clear designation of roles.
• Employment Terms: Job title, duties, work hours, probation period, and reporting structure.
• Compensation Structure: Detailed breakdown of salary, bonuses, benefits, and payment schedule.
• Leave Entitlements: Annual, sick, and maternity leave as per Pakistan's labor laws.
• Confidentiality Provisions: Protection of company information and trade secrets.
• Termination Clauses: Notice periods, grounds for termination, and severance terms.
• Dispute Resolution: Process for handling disagreements under Pakistani jurisdiction.
• Signatures Section: Space for dated signatures from both parties with witness provisions.

An Employment Agreement differs significantly from an Agency Agreement in several key aspects under Pakistani law. While both govern working relationships, their fundamental purposes and legal implications are distinct.

• Legal Status: Employment Agreements create an employer-employee relationship with direct oversight and control, while Agency Agreements establish independent contractor status with more autonomy.
• Benefits and Protections: Employment Agreements must include statutory benefits like social security and leave entitlements; Agency Agreements typically exclude these.
• Payment Structure: Employment Agreements specify regular salaries and benefits, whereas Agency Agreements usually involve commission or project-based compensation.
• Control and Supervision: Employment Agreements grant employers direct control over work methods and schedules; Agency Agreements focus on deliverables while leaving methods to the agent's discretion.
• Tax Implications: Employees have taxes withheld by employers, while agents handle their own tax obligations under Pakistani tax laws.