ISLAMABAD: Pakistan’s government has signed a record Rs25.255 billion severance and compensatory package for employees of the Utility Stores Corporation affected by layoffs following the chain’s closure, marking one of the largest post-layoff settlements in the country’s public sector.
The package provides immediate relief through six months’ house rent and 40 per cent of Rs19.5 billion in compensatory funds, with additional payments of Rs5.75 billion earmarked for widows and other terminal dues, as per the agreement available with The News.
The agreement, signed on Wednesday by the All Pakistan Utility Stores Corporation National Workers Union on behalf of employees with the government, lays out a staggered disbursement schedule to ensure timely payments.
After 80 per cent of the first installment is utilised, the government, referred to as the “first party”, will release a second tranche covering 30 per cent of the funds, followed by a final 30 per cent payout.
Officials said the package is designed to support thousands of workers impacted by layoffs through August 2025, including those terminated earlier in February, May, and November 2025. The state-run retail chain was serving the nation since its establishment in 1971.
Payments are calculated according to employees’ service records and termination status, with special provisions for contractual staff, daily wage earners and vulnerable groups.Widows’ compensation totals Rs684 million, while farewell grants for departing employees reach Rs5.067 billion.
In addition, leave encashments, house ceilings and other terminal benefits have been included, reflecting a comprehensive approach to mitigating financial hardships caused by the closure of USC operations.In return, the union accepted the package as a “full and final settlement,” relinquishing all future legal claims or disputes regarding employment, layoffs or the corporation’s closure.
