early 16 years after the 18th Constitutional Amendment devolved the subject of labour to the provinces, Sindh continues to administer three structurally separate statutory regimes governing worker social protection: the Sindh Employees’ Social Security Institution under the Sindh Employees’ Social Security Act, 2016; the Sindh Workers Welfare Board under the Sindh Workers Welfare Fund Act, 2014; and the profit-participation framework under the Sindh Companies Profits (Workers’ Participation) Act, 2015.

While Sindh also enacted its Employees Old-Age Benefits Act in 2014, the institution (EOBI) and its administration are still federal. These laws operate through distinct institutions, separate employer-registration windows, different contribution mechanisms and divergent benefit channels, thus creating a fragmented system that is difficult for workers to navigate, costly for employers to comply with and structurally incapable of extending meaningful coverage to the vast majority of Sindh’s workforce, especially those in the informal economy. Sindh has a labour force of 18 million, of whom fewer than 10 percent are covered by its employment-related social protection system.

We argue that the Government of Sindh should move towards the enactment of a Sindh Workers’ Social Protection and Welfare Code, a single, consolidated provincial legal framework integrating social security, workers’ welfare and profit participation into one statute, with separate chapters tailored to each pillar. On old-age benefits, a measured and phased approach is recommended: acknowledging the unresolved constitutional and administrative position of the EOBI while enabling Sindh to lay the groundwork for eventual integration or coordination of old-age benefit delivery at the provincial level.

Employment-related social protection in Sindh has the following three pillars.

Social Security

The SESSI is a tripartite body established under the Sindh Employees’ Social Security Act, 2016, tracing its origins to the West Pakistan Employees’ Social Security Ordinance of 1965, re-organised provincially in 1970. The SESSI provides cash benefits (sickness, maternity, employment injury, death grants, as well as Iddat benefit) and medical care to secured workers and their dependants, through its own medical facilities. It maintains separate employer registration, a distinct contribution stream (employer-side contributions based on minimum wages) and a separate governing body. The number of workers registered with the SESSI in August 2025 was 770,000.

The SESSI is also the collection agency under the Workers’ Children (Education) Ordinance, 1972. Under the 1972 law, every industrial/ commercial unit with 10 or more workers must pay a cess at the rate of Rs 100 per worker per annum. The amount collected is transferred to the Sindh Workers Welfare Board.

Worker Welfare and Profit-Participation

The Sindh Workers Welfare Fund Act, 2014, repealed the federal Workers Welfare Ordinance, 1971, in Sindh and established a provincial Workers Welfare Fund administered by the Sindh Workers Welfare Board. Industrial establishments (definition includes all kinds of establishments that are not necessarily industrial in nature) with annual income exceeding Rs 500,000 contribute 2 percent of their total income to the Fund. It is used for housing, welfare projects (education, scholarships, marriage grants, death grants) and related programmes.

The Sindh Companies Profits (Workers’ Participation) Act, 2015 requires eligible companies operating in Sindh to contribute 5 percent of annual net profits to a Workers’ Profit Participation Fund. Distribution is made to eligible workers (employed for at least six months) on a unit basis tied to wage categories. This creates yet another contribution obligation, a separate Board of Trustees per company and separate record-keeping and disbursement mechanisms. The remaining profit, after allocation to workers, is deposited with the Sindh Workers Welfare Board.

Old-Age Benefits

The EOBI, established under the Employees’ Old-Age Benefits Act, 1976, became a provincial subject after the 2010 Amendment; however, the federal cabinet subsequently issued a notification reclaiming administrative control. The EOBI provides old-age pensions, old-age grants, invalidity and survivors pensions.

Sindh enacted its own old-age benefits law in 2014 and amended it in 2016. However, in 2019, the Council of Common Interests deliberated on EOBI’s status and concluded that both the EOBI and the Workers Welfare Fund should remain under federal jurisdiction until a mutually agreed inter-provincial mechanism is established. While the federal EOB Act of 1976 remains operative by default, the federal government lost the authority to amend it after devolution, meaning it could not legally raise the base for employer contributions or pension amounts. Employers have been contributing to the EOBI at varying rates (Rs 2,400 vs Rs 170), resulting in the loss of hundreds of billions in due contributions. In 2025, the number of workers for whom contributions were paid was 3.25 million, out of a labour force of more than 80 million.

The combined effect of three separate statutes and EOBI’s contested status, is that a formally employed worker in Sindh may nominally fall under three or more legal regimes, each with its own registration, contribution formula, benefit entitlement, appeal mechanism and administering institution. An employer must register with the SESSI, comply separately with its WWF obligations, maintain a WPPF Board and navigate EOBI (differential contribution rates), without any integrated compliance platform. The most severe consequence of this fragmentation is exclusion. Over 85 percent of Pakistan’s workforce, including agriculture, home-based work, domestic work and the platform economy, is employed in the informal economy. The Economic Census 2023 found that 95 percent of Pakistan’s 7.14 million establishments are micro-enterprises employing fewer than 10 workers. Women constitute an estimated 80 percent of Pakistan’s 12 million home-based workers. None of these workers is meaningfully covered by any of the existing contributory schemes.

The Sindh Labour Policy 2018

itself makes a strong case for consolidating social protection laws. The policy expressly calls for the consolidation and simplification of relevant laws into an Employees Welfare and Social Protection Law, while also requiring a uniform definition of workers across labour laws and a “one window framework” for the administration and payment of labour and welfare obligations. The 2018 policy further seeks to expand the coverage of social security, welfare, compensation and old-age related benefits to formal, informal, contract, piece-rate, home-based, domestic, seasonal, agricultural, mining and other currently under-covered workers and to build a sustainable social protection floor with wider coverage for vulnerable groups. Given this background, consolidation is not merely a drafting exercise; it is the legal mechanism needed to translate the policy’s commitments into practice.

Based on our drafting experience with the Punjab and Sindh Labour Codes, we can identify the following benefits of consolidating social protection laws at the provincial level.

Legal Clarity and

Simple Definitions

Various provincial statutes use different definitions of core terms, including worker, employer and establishment, creating legal uncertainty for courts, inspectors, employers and workers alike. A consolidated code with uniform definitions across all chapters would eliminate this inconsistency. One set of definitions for core terms like worker, employee and employer, replacing the inconsistent array of definitions in current laws, is essential if labour law is to be enforced effectively.

Better Worker Access

Fragmentation is a structural barrier to rights. A worker who does not know which institution handles which benefit; who faces separate appeal forums for different entitlements; and who cannot access information in one place, is unprotected in practice. A single-code; one-window provincial framework with a unified worker record; a single registration process; and a common grievance and appeals mechanism will transform access to effective services.

Easier Employer

Compliance

Multiple compliance obligations across the SESSI, the WWF, the WPPF and the EOBI impose disproportionate burdens on small and medium enterprises, which constitute the overwhelming majority of Sindh’s formal-sector establishments. A consolidated code with a single employer-facing registration window, harmonised contribution computation and consolidated reporting would reduce administrative costs and encourage voluntary compliance and formalisation.

Reduced Duplication and Fragmentation

Separate governing bodies, audit requirements, legal services, insurance networks and disconnected data systems consume resources that would be better directed toward worker benefits. Institutional rationalisation, even in a phased manner, would improve the efficiency of social protection expenditure.

Portability and Data

Integration

Sindh lacks an integrated worker social protection database. A consolidated code mandating a single provincial worker record, linked to NADRA’s national identification system, would enable portable entitlements and evidence-based policy monitoring. The National Socio-Economic Registry, maintained by NADRA, covered approximately 80 percent of Pakistan’s population (40 million families) as of 2025. Still, employment-related provincial social protection programmes remain largely disconnected from this infrastructure.

Extending Coverage to Informal Workers

Over 80 percent of workers in Pakistan are in the informal sector, with limited or no social insurance access. The Sindh Employees Social Security (Amendment) Act2021 created a legal pathway for their inclusion by allowing the self-employed to self-register and contribute Rs 1,500 per month. However, a SESSI governing body meeting at the end of 2024 indicated that only 2,500 home-based workers were registered. A consolidated provincial framework with inclusive definitions and flexible contribution arrangements can address this structural exclusion.

The Government of Sindh is already working to “consolidate, simplify and rationalise” 21 existing laws covering occupational safety and health, industrial relations and working conditions into a coherent Sindh Labour Code. The draft Code’s broad, inclusive definitions, including that of worker, which cover informal, contract, gig, home-based, construction, domestic, self-employed and agricultural workers, provide a model for parallel reform in the social protection domain.

The government of Sindh should enact a Sindh Workers’ Social Protection and Welfare Code as a single, comprehensive statute that consolidates, rationalises and modernises the existing provincial frameworks. The code should explicitly repeal and replace the Sindh Employees’ Social Security Act 2016, the Sindh Workers Welfare Fund Act 2014, the Sindh Companies Profits (Workers’ Participation) Act 2015, the Sindh Employees’ Old-Age Benefits Act 2014, and the Workers’ Children (Education) Ordinance 1972, while preserving all accrued entitlements of workers under the repealed laws.

The consolidation exercise must preserve or enhance all existing worker entitlements under the SESS Act, the WWF Act, the WPPF Act and the EOBI Act. A non-regression clause and a mandatory tripartite consultation requirement on draft texts are essential safeguards.

Acknowledging EOBI’s unresolved position in light of CCI’s 2019 decision, the code should establish a Sindh Worker Old-Age Benefits Register that requires employers to furnish contribution data to the Labour Department. The code must also include an enabling provision for a provincial old-age scheme, activated only upon a CCI resolution or bilateral federal-provincial agreement.

Rather than the immediate merger of different institutions under various laws, there should be a phased administrative integration through a tripartite-plus Provincial Social Protection Coordination Council, with the mandate to develop a shared digital platform and a unified worker record within 24 months of the code’s commencement and to establish district-level one-window access points within 36 months.

In the years since devolution, Sindh has demonstrated both the willingness and the legal authority to legislate on work-related social protection. It is the only province that has re-enacted all social protection legislation after devolution. A consolidated code will give these scattered provincial enactments coherence, enforcement power and a unified institutional framework. Such legislation will also align with the Decent Work Country Programme (2023-27), which calls for extending social protection as one of its four core priorities. Sindh has the opportunity now to take the lead in creating a coherent social protection code that delivers dignity, security and justice to 18.5 million workers in the province.

Iftikhar Ahmad ([email protected]) and Raja Faizul Hassan Faiz work at the Centre for Labour Research, Pakistan. They were members of the drafting team for the Labour Codes in the Punjab and Sindh.