Contract Employee vs Permanent: Legal Differences in Pakistan

The legal distinction between contract and permanent employees and how it affects your rights.

Contract employees are hired for a fixed term and their employment ends automatically upon expiry. Permanent employees have an indefinite engagement and stronger protections against termination. Key differences: permanent employees cannot be dismissed without an inquiry (Standing Orders Ordinance), have stronger EOBI and social security rights, and are entitled to gratuity. However, repeated renewal of fixed-term contracts can create a presumption of permanent employment. Courts have held that if a contract employee performs the same work as permanent staff for an extended period, they may be entitled to regularisation.

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