In Pakistan, the payment of gratuity to contract employees is governed by the Employment of Contractual Employees Ordinance, 1971. According to this law, contract employees are entitled to receive gratuity upon the completion of their contract, provided they have completed at least one year of service with their employer. The amount of gratuity is calculated based on the employee’s last basic salary and the number of years they have worked for the employer.
The formula for calculating gratuity is as follows:
Gratuity = (Last Basic Salary x 15) / 26 x Number of Completed Years of Service
It is important to note that gratuity is only payable to contract employees and not to permanent employees, who are entitled to receive gratuity under the Payment of Gratuity Act, 1972. In addition, contract employees may also be entitled to receive other benefits, such as paid leave and health insurance, depending on the terms of their contract and applicable laws.
Overall, the payment of gratuity to contract employees in Pakistan is a legal obligation for employers and is an important benefit for employees who have completed a significant period of service. If you have any questions or concerns about gratuity for contract employees in Pakistan, it is advisable to consult a legal professional.