Commercial Contract

MODEL EMPLOYMENT CONTRACT

Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
[email protected]

REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE

PUNJAB SINDH KPK BALOCHISTAN

3rd Floor, Building No. 3, 5TH Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 9213046-47 Tel: (081) 831623, 831702
Fax: (042) 36304926-7 Fax: (021) 5610572 Fax: (091) 286908 Fax: (081) 831922
[email protected] [email protected] [email protected] [email protected]

January 2013
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

LEGAL SERVICES, SMEDA

The Legal Services (LS) department is a part of Business & Sector Development
Services Division of the Small Medium Enterprises Development Authority and plays
a key role in providing an overall facilitation and support to the small businesses. The
LS believes that information dissemination among the small businesses on the
existing legal & regulatory environment and business to business and business to
client contracting is of paramount importance and plays a pivotal role in their
sustainable development.

In order to facilitate small businesses, the LS, under the Pro-GOLE (Right to do
business) project, a joint SMEDA-UNDP initiative for supporting the small businesses,
has developed user-friendly contract templates.

Pro-GOLE, (Right to do Business)

The UNDP has partnered with the Small and Medium Enterprises Development
Authority to initiate and execute the Pillar 4 (Right to do business) component of the
UNDP PRO-GOLE project which seeks to enhance the legal awareness and mobility of
marginalized/ informal businesses. Under the project legal services outreach shall be
extended to small businesses including home based enterprises, small shopkeepers,
growers, women entrepreneurs, hawking vendors etc. In addition, small business
shall be mobilized to access legal services.

The Need for Commercial Contracts Templates

In an increasingly complex and competitive industry, it is vital that suppliers and
purchasers are fully protected against legal and commercial risks. To counter such
risks, a viable solution; available as- of the shelf commercial contract templates- will
provide the users with first class ready to use support. With obligations properly set
out and liabilities accurately defined, the users will be in a far better position to look
after their rights and interests and move forward from their marginalized positions to
being active players of the economy. The Legal Service Providers can equally take
benefit of these templates for their professional and business development.

Disclaimer
The information contained in this template is meant to facilitate the businesses in
documenting transactions with reference to employment matters. However, SMEDA,
UNDP or any of their employees or representatives accept no responsibility and
expressively disclaim any and all liabilities for any and all losses/shortfalls caused by
or motivated by recommendations from the information contained within this
document. Although SMEDA’s ambition is to provide accurate and reliable
information; yet, the document is not an alternative to expert legal advice and
should ideally be used in conjunction with the same. Any person using this document
and or benefiting from the information contained herein shall do so at his/her own
risk and costs and be deemed to have accepted this disclaimer.
Information contained in this document may be freely used provided that relevant
acknowledgement is accurately quoted with each usage.

2
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

2. MODEL EMPLOYMENT CONTRACT

THIS EMPLOYMENT AGREEMENT (hereinafter referred to as the "Agreement") is

made at [insert place] on this ___ (insert date) day of _________ (insert month), 20__
(insert year)

BY AND BETWEEN:

M/s [insert Name], a public/private company incorporated under the Companies

Ordinance, 1984, having its registered office at [insert Address] through its [insert
Designation], Mr/Mrs/Ms [insert Name];
OR
M/s [insert Name], a partnership concern of Mr/Mrs/Ms [insert Name] and Mr/Mrs/Ms
[insert Name], having its place of business at [insert Address] through its Partner,
Mr/Mrs/Ms [insert Name];
OR
M/s [insert Name], a sole proprietorship concern of Mr/Mrs/Ms [insert Name], having
its place of business at [insert Address] through Mr/Mrs/Ms [insert Name];

(hereinafter referred to as the “Employer”, which expression shall, wherever the

context so provides, include its successors, assigns, nominees and agents)
AND
Mr/Mrs/Ms [insert Name], son/wife/daughter of [insert Name], r/o [insert Address]
CNIC # [insert Number] (Hereinafter referred to as the “Employee”.)

(The Employer and the Employee are hereinafter collectively referred to as the
“Parties”, and individually as the “Party”).

The Employer and the Employee hereby agree to the terms and conditions as set out

in this Agreement:

POSITION

1. The Employee shall be appointed to the position of [insert Designation] and the
Employee agrees to undertake the tasks and responsibilities as indicated in the job
description for this position, as presented in Annexure A.

2. The Employer shall be able to transfer the Employee to any location related to
the fulfillment of the tasks and responsibilities indicated in Annexure A, provided
that the Employee is given a prior [insert number] month notice before such
transfer is affected.

3
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

DURATION

3. This Agreement shall come into force on the date of signing of the Agreement,
and shall terminate on the expiry of [insert number] years, unless specifically
renewed at the sole discretion of the Employer after consultation with the
Employee.

PROBATION

4. The Employee shall complete a period of probation of [insert number] months

beginning from the date of signing of this Agreement, after which period the
Employee shall attain the permanent status.

PAY AND BENEFITS

5. The Employee shall be paid an amount of Rs. _________/- (Rupees

__________) per month (insert amount) (hereinafter referred to as the “Monthly
Pay”), paid monthly in arrears on the last day of every calendar month, beginning
from the date of this Agreement. The pay of the Employee shall be reviewed at the
end of the Employee’s probation period, with any new amount being agreed in
writing between the Parties.

6. The Employer shall deduct from the Employee’s Monthly Pay the government
taxes and other payments required by law, or as agreed between the Parties. The
total deductions, however, shall not exceed 50% of the Employee’s Monthly Pay.

7. The Employer shall pay travel expenses to the Employee for travel costs
incurred in the performance of the Employee’s tasks and responsibilities, such
payment to be made in advance, and to be settled at the end of the travel/tour in
accordance with the Employer’s procedures.

8. The Employer shall pay to the Employee a daily allowance of Rs. _________/-
(Rupees _______________________) (insert amount) when the Employee is
required to travel in the performance of the Employee’s tasks and responsibilities.

9. The Employer shall pay to the Employee the sum of Rs. _________/- (Rupees
_______________________) (insert amount) towards the travel costs of the
Employee at the commencement of the employment as indicated in Paragraph 3.

10.The Employer shall pay to the Employee the sum of Rs. _________/- (Rupees
______________________) (insert amount) plus travel allowances for the
Employee and his family in the event of the Employer transferring the Employee to
another location during the course of the employment.

4
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

11.Pay and allowances and other monetary entitlements under this Agreement shall
be payable only in Pak Rupees.

HOURS OF WORK

12.The Employee shall be required to work a maximum of 8 hours per day, 6 days
per week, exclusive of the one hour lunch break every day.

13.The Employee shall be entitled to overtime payments against any work which is
carried out by the Employee after the normal working hours as enumerated in this
Agreement.

14.The Employee shall be entitled to [insert number] days of paid annual leave,
[insert number] days of paid sick leave, [insert number] days paid casual leave,
[insert number] months paid maternity leave or [insert number], as well as all the
usual public and festival holidays as notified by the Federal and Provincial
Governments. However, the annual leave entitlement must be taken during the year
for which it is granted, and the timing of the annual leave must be agreed with the
Employer as far in advance as is possible. The Employer reserves the right to refuse
requests for holiday if the proposed timings are not convenient.

SAFETY AND HEALTH

17.The Employer shall provide a working environment that is safe and not harmful
to the health of the Employee and assumes prime responsibility for all safety and
health matters in the place of work. The Employee agrees to cooperate with the
Employer to ensure the working environment is as safe and healthy as is reasonably
possible.

18.The Employer agrees to provide the Employee with all necessary protective
clothing and equipment associated with the Employee’s duties and responsibilities,
without any cost to the Employee.

19.The Employer agrees to compensate the Employee for any injury or disease
attributable to the performance of his or her duties and responsibilities under this
Agreement, or in the event of death of the Employee due to work or work related
circumstances, to compensate the Employee’s dependants and beneficiaries.

PROVIDENT FUND, PENSIONS AND GRATUITIES

20.On termination of this Agreement, the Employer shall pay to the Employee all
payments and entitlements due for provident fund, insurance, pension rights and
gratuity payments, if any, as per the applicable laws of Pakistan.

5
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

AGREEMENT RENEWAL

21.The Employer shall notify the Employee at least [insert number] months before
the expiration of this Agreement regarding whether the Agreement would be
renewed for another term. In the event of the intended re-engagement of the
Employee, the terms and conditions of employment, including the duration of the
contract, shall be as agreed between the Parties.

TERMINATION OF AGREEMENT

22.The Parties agree that this Agreement can be terminated by either Party giving a
minimum of [insert number] months notice to the other Party.

LOYALTY AND CONFIDENTIALITY

23.The Employee agrees to the best of his or her abilities to protect and
promote the property, information and business interests of the Employer and not to
disclose information to others that could be harmful to those interests.

24.The Employer agrees to respect the rights of the Employee as set out in the
Constitution and other relevant laws of Pakistan, in this Agreement and the rules and
regulations of the Employer, and to treat the Employee fairly and with respect and
dignity.

DOCUMENTATION PROVIDED BY THE EMPLOYEE

25.The Employee declares that all information, documentary evidence, including

educational qualifications and medical reports, references, employment history and
other documents relied upon by the Employer in entering into this Agreement are to
the best of the knowledge of the Employee correct, complete and verified, as
appropriate. The Employee further agrees that non-disclosure or withholding of
material information that would otherwise have resulted in the Employer not
entering to this Agreement shall result in this Agreement being null and void and
may, at the discretion of the Employer, lead to prosecution under the relevant civil
and criminal laws of Pakistan.

NOTICES

26.All notices required or contemplated under this Agreement shall be given in

writing by registered mail, acknowledgement due, or by fax or telex or telegram to
the following:

6
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

If to the Employer: [insert address]

If to the Employee: [insert address]

IN WITNESS WHEREOF, the Parties have signed this Agreement, having fully
understood the conditions set therein, of their own free will, in the presence of
witnesses.

_____________________ _____________________
For and on behalf of For and on behalf of
Employer Employee

Witnesses:

1. 2.
________________________________ ________________________________

Name: __________________________ Name: __________________________

Address:_________________________ Address:__________________________

________________________________ _________________________________

ANNEXURE A

JOB DESCRIPTION

The Employee will be responsible to and undertake the following tasks and responsibilities:

1.
2.
3.

7
Model Employment Contract
Pro-Gole (Right to do Business)
Legal Services, B&SDS

JOB REQUIREMENTS

The person in this position is required to have the following capacities:

1.
2.
3.

The Employee agrees to perform the above tasks and responsibilities to the best of
his or her abilities.

_____________________ _____________________
For and on behalf of For and on behalf of
Employer Employee