The most common employment complaint we receive is not about dismissal. It is about money owed after employment has already ended — a final settlement that never arrives, a gratuity calculated on a figure the employee does not recognise, or a provident fund balance nobody will release.
Employers hold these payments as leverage far more often than they are entitled to.
What may be owed
Entitlement depends on the contract, the applicable standing orders and service rules, and the law applicable to the establishment. Broadly, on leaving you may be owed:
Unpaid salary to the last working day.
Gratuity, where it applies — a terminal benefit based on length of service.
Provident fund, where a fund exists: your contributions and, subject to the fund's rules on vesting, the employer's.
Leave encashment, for accrued and untaken leave, where the terms provide for it.
Notice pay, where the employer terminated without giving the contractual notice.
Bonus or commission earned, including sums that had accrued before you left.
EOBI and social security entitlements, which are separate from anything the employer pays you directly — see the registrations employers keep missing.
Gratuity: the calculation is where the argument is
Gratuity is generally calculated by reference to a period of wages for each completed year of service.
The dispute is almost always about which wage figure is used. Salary structures in Pakistan are commonly split into a small "basic" and a large set of allowances, and terminal benefits are frequently calculated on basic alone.
Two employees on identical gross pay can therefore receive very different gratuity depending on how their pay was structured — which is why the structure in your appointment letter is worth reading when you join, not when you leave.
Check what your contract and the applicable rules actually specify. Where they are silent or ambiguous, the position is arguable.
Gratuity or provident fund — sometimes not both
Some establishments operate a gratuity scheme, some a provident fund, and some one in substitution for the other rather than in addition.
Establish which applies to you. Employees frequently expect both and are told at exit that the fund was in lieu of gratuity — a position that may be correct, depending on the scheme, or may not be.
Resignation, termination and dismissal
Your entitlements are not identical in each case.
Resignation with proper notice generally preserves accrued terminal benefits.
Termination by the employer engages notice pay and, depending on the circumstances, other consequences.
Dismissal for misconduct, following a proper inquiry, can affect certain benefits under the applicable rules — which is one reason the fairness of the process matters beyond reinstatement. See dismissed from your job in Pakistan.
Note also that an "absconding" entry made by an employer where you in fact resigned is worth correcting promptly, because it follows you.
The clearance trap
The common pattern: the employer will not pay the final settlement until the employee signs a clearance form, and the form includes a full and final release of all claims.
You are generally entitled to be paid what you are owed without releasing claims you have not been paid for. Signing a broad release to obtain your own money can extinguish a grievance worth considerably more.
Read the form. If it releases everything, take advice before signing. It is often possible to sign a clearance limited to the return of company property and the sums actually received.
Similarly: do not hand back the laptop, the ID card and the keys in exchange for a promise. Get the payment.
If payment is withheld
Write, promptly. Set out each head claimed, the amount, and the basis. Ask for the calculation in writing. Many settlements resolve at this stage once the employer sees the claim is itemised. See sending a legal notice in Pakistan.
Watch the deadlines. Employment grievance procedures carry short time limits, measured in days, and they are strictly applied. Do not spend three months negotiating and then discover the remedy has lapsed.
Know your forum. Depending on your category of employment and the establishment, the route may be the Labour Court, the NIRC, or — for government servants — the departmental appeal and service tribunal. See service matters for government employees. Filing in the wrong forum wastes the very time you do not have.
For employers
Withholding a final settlement is the most reliable way to convert a clean departure into a claim.
Pay what is due promptly, provide the calculation in writing, keep the clearance form limited to property and the sums actually paid, and be consistent — an employer who calculates gratuity one way for one employee and another way for the next will be shown both.
Practical advice
Read your appointment letter when you join, particularly the salary structure and the terminal benefits clause. Keep your payslips. On leaving, ask for the calculation in writing before signing anything. And move quickly if payment does not follow.
How the firm can help
We act for employees recovering unpaid salary, gratuity, provident fund, leave encashment and notice pay, before the Labour Courts, the NIRC and the service tribunals, and by negotiation where that is faster.
We also advise employers on structuring benefits, calculating terminal dues correctly, and drafting clearance documentation that is enforceable rather than overreaching.
Because the time limits are short, take advice as soon as payment is refused. Contact the firm with your appointment letter, payslips and the final settlement offer.