Social security ordinance 1965

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Q-1:     Describe the objectives applicability important definitions of social security ordinance 1965.


Before the implementation of this- ordinance the only financial help apart from the wages of the worker was provided in tile from of compensation. This compensation was only available in the case of death or different disablements caused to a worker by accidents, which took place out of and in the course of the employment of the employer. There was no financial help in case where the worker fell ill and could not attend to his work to earn for himself or for his family. In the same way when the women workers who due to their circumstances were forced to work in industries and establishments to make both ends meet were involved in delivery of the children and were not in a position to do their job for some days before the deliver and for some days after it which covers a sufficiently long period were not receiving any help for this period of their absence and there was no other source for the maintenance of themselves and their family. In a way it can be said that the Workmen Compensation Act 1923 was not in a position to provide financial help to the workers in such a time and the worker was put to a great hardship. This lacuna was visualized the Government of the time and thus this Social Security Ordinance was promulgated in 1965 which renders a great help to the worker, in such difficult times. This Ordinance made it possible for the worker to maintain himself in times when there is no sort of an income due to his disability to do any Job which may procure wages in the form of money to him and the disability caused by some diseased or a female worker .during those days of her nearing delivery of a child which can be said to be prenatal and the days which can be said to be postnatal Now they are top get allowances for the says which were very hard for them before the promulgation of this Ordinance. They also receive medical treatment, which is free. To pay the allowances and purchase medicines and services of the medical staff, funds were in all cases necessary and so for this purpose a fund is created under this Ordinance, which is known as Social Security Fund. Dir this Fund the Ordinance has created a source, which is the contribution to be paid by the employers alone. The worker is not to pay a single paisa towards it. There were so many other cases of difficulty for the family of the workers as there was so no provision for the widow and children of a worker after “the death of a worker has become possible due to, the creation of this welfare fund from which such persons will get allowances according to the rules and regulations of this Ordinance. This Ordinance has made rules and regulations for the financing and spending of the Fund.



There are three main aims and objectives of promulgating the Social Security Ordinance, 1965. These are briefly listed below;

1.         To introduce a scheme of social security in the country.

2.         To provide benefits to certain employees or to their dependants.

3.         To provide such benefits in the event of sickness, maternity, employment injury, death and matters ancillary thereto.



This Ordinance does not apply to concerns owned by a particular person or legal entity but applies to Industry or establishment specifically stated in the notification. To make it clear one illustration will serve the purpose and it is, where two shops are owned by one person and out of them one is meant or the manufacture or production of goods and the other for the sale of the same goods the Ordinance will only apply in the case of the shop which is meant for the production of the goods. This Ordinance is applicable throughoutPakistan.

To understand he applicability of the Ordinance and its terms it becomes necessary that the terms used in it are clearly understood. This can only be possible by clearly understanding the definitions of the terms given in the Ordinance under Section 2. The main features of Social Security Ordinance are:

The Ordinance does not apply to all concerns owned by a particular person or legal entity but only to such industry or establishment as is specifically notified.

The Government can apply the provisions of the Ordinance to any industry or establishment irrespective of the number of employees.

The Ordinance once applied to an organization continues to apply even after the change of ownership.

Once an establishment is notified the benefit accrues to all employees working in the establishment or in connection with the work of the same wherever located.



ü                  Appointed Day [Sec 2(1)]

It is the day of which this Ordinance has been made applicable to any area, class of persons, industries and establishments and benefits which have been provided by the Ordinance

ü                  Confinement [Sec. 2(4)]

Labour or difficulty which affects the strength of a woman and which is created in the delivery of a living child or labour after twenty-six weeks of pregnancy resulting in the issue of a child, dead or alive.

ü                  Contribution [Sec. 2(5)]

It means the amount of money, which an employer has to pay towards the Social Security Fund for the employees in accordance with the provisions of this Ordinance,

ü                  Dependants [Sec. 2(6)]

“Dependent” means the wife or wives or a needy invalid husband and unmarried children under the age of sixteen years dependent upon the secured person. For the purpose of eligibility to the benefits of Social Security Scheme the dependants of a secured person now means;

(a) Wife or wives         (b) Needy invalid husband

(c)        Dependent parents

(d)        Unmarried male children under the age of 21 years

(e)        Unmarried dependent daughter irrespective of her age

ü                  Disablement [Sec. 2(7)]

“Disablement” means the reduction in earning capacity of an employee due to an employment injury which is certified by an authorized medical practitioner that the capacity of the secured employee has been either permanently reduced or is likely’ to be temporary reduced. The disablement will be considered as minor where the loss of earning capacity is less than twenty percent. It will be regarded partial if the loss of earning capacity is between twenty-one to sixty percent. It will be counted as total if the loss of earning capacity is more than sixty percent Disablement may be minor, partial or total as follows:

(a)        Disablement is minor when the loss of earning capacity is less than 20%.

(b)        Disablement is partial when the loss of earning capacity is between 21% and 60%.

(c)        Disablement is total when loss of earning capacity is in excess of 60%.

ü                  Domestic or Despite Servant [Sec. 2(7a)]

“Domestic or Despite Servant” means any person who is required to work whole time in connection with the work of any household for any consideration in cash or kind.

ü                  Employee (Sec. 8]

For the application of this Ordinance a person who normally works for at least 24 hours a week for wages in connection with the work of any industry, business, undertaking or establishment under any contract of service or apprenticeship, which may be oral or written, will be called an employee. This term will not include a person in the service o the state who may be a member of the Armed Forces. Police and Railway administration or any person who is in the service of his father, mother, wife, son or daughter will also be excluded and also a person who is getting more than 1,500 rupees per month will not be considered an employee for the purposes of this Ordinance.


Employee does not Include:

(a)        Person in the service of state armed forces, police and railways.

(b)        Persons employed in defence organization or railway administration.

(c)        Person in service of local council, municipal committee, cantonment board or local authority.

(d)        Person in service of his father, mother, husband, wife, son or daughter.

(e)        Person whose monthly wage exceed Rs.5,000/=.


Remember that once an employee is covered by the Social Security Scheme, due to the fact that his wages were less than Rs. 5,000/= p.m. shall not subsequently cease to be a secured person for the reason that his wages exceed Rs. 5,000/= p.m.

ü                  Employers [Sec. 2(9)]

Employer means:’

(a)        Contractor of licensee working for the state on works executed on behalf of the state.

(b)        Owner of industry, business, undertaking or establishment.

(c)        Agent.  (d) Manager;    (e) Representative of owner.

ü                  Industry [Sec. 2(15)]

(a)        Industry means any business, trade, undertaking, manufacturing or calling of employers.

(b)        Industry includes any calling, service, employment, handicraft, industrial occupation or association of workmen.

ü                  Employment Injury [Sec. 2(10)]

This means a personal injury to a person, who can be called a secured person, caused by an accident or by such occupational disease as may be specified in the regulations arising out of and in the course of his employment.

This term covers all industrial commercial and also agricultural establishment.

ü                  Secured Person [Sec. 2(25)]

‘Secured person” is that person for whom contributions are or were payable under this Ordinance.

ü                   Wages [Sec 2(30]

It means the remuneration which is paid to a secured person in cash or kind and it will include dearness allowance or any other remuneration in respect of cost of living allowance but it will not include the overtime earned by the worker or the expenses meant for the application of this Ordinance.


Wages include

Dearness allowance, cost of living allowance, payment for authorized leave; illegal lockout, and legal strike, but does not include overtime allowance, payment for special expenses, bonus or gratuity.


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