COMPANIES PROFITS (WORKERS PARTICIPATION) ACT, 1968

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THE COMPANIES PROFITS (WORKERS PARTICIPATION) 
ACT, 1968 
(XII of 1968) 
CONTENTS 
1. Short title, extent and commencement. 
2. Definitions. 
3. Establishment of Fund. 
4. Management of the Fund. 
4-A. The Committee. 
5. Penalty. 
6. Power to call for information. 
7. Settlement of disputes, etc. 
8. Delegation of power. 
8A. Inspectors. 
8B. Powers of Inspector. 
8C. Power to amend the Schedule. 
9. Power to make rules. 
10. Act to override other laws. 
THE SCHEDULE 
SCHEME 
1. Scope of the scheme. 
2. Investment of Fund. 
3. Eligibility to benefits of scheme. 
4. Distribution of benefits to workers. 
Categories 
5. Disbursement of benefits. 
6. Definition of the net asset value of the unit. 
7. Employee's own contribution. 
8. [Omitted] 
9. Tax treatment of the Income of the Fund. 
10. Tax treatment of the income to the workers. 
11. Working and location of the Board of Trustees. 
12. Audit of the Fund accounts. 
13. Scheme's benefits to be in addition to other benefits. 
14. Special provision for industries working seasonally. 
15. Companies engaged in more than one industrial undertakings. 
16. Entrustment of management of Fund to Investment Corporation of 
Pakistan, etc. 
 
 
TEXT 
1
THE COMPANIES PROFITS (WORKERS PARTICIPATION) ACT, 1968 
(XII of 1968) 
[5 July 1968] 
An 
Act 
to provide for participation of workers in the profits of companies 
 WHEREAS it is expedient to provide for participation of workers
2
 in the profits 
of companies and for matters ancillary thereto; 
3
[ * * * * * * * * *   ] 
 It is hereby enacted as follows:– 
1. Short title, extent and commencement .– (1) This Act may be called the 
Companies Profits (Workers Participation) Act, 1968. 
 (2) It extends to the whole of 
4
[the Punjab]. 
 (3) It shall come into force at once. 
2. Definitions.– In this Act, unless t here is anything repugnant in the subject or 
context,– 
(a) "Board" in relation to a Fund means a Board of Trustees constituted 
under section 4 for the management and administration of the Fund; 
(b) "company'' means a company within the meaning of 
5
[
6
[the Companies 
Act, 2017 (XIX of 2017)]], and includes– 
(i) a body corporate  established by or under any law for the time 
being in force; 
(ii) any institution, organization or association whether  incorporated 
or not, declared
7
 by the 
1
[
2
[Government]] in the official Gazette to 
                                                           
1This Act received the assent of the President on July 4, 1968 and published in the Gazette of Pakistan (Extraordinary), dated July 5, 1968, pp. 
739-745. 
2Printed in the Gazette as “works”. 
3Omitted by the Companies Profits (Workers’ Participation) (Amendment) Act 2 021 (XXVIII of 2021 ), published in the Punjab  Gazette 
(Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 2. 
4Substituted for the word “Pakistan” by the Act ibid. 
5Substituted for the words, comma , brackets and figures “Companies Act, 1913  (VII of 1913)” by the Finance Act, 2007 (IV of 2007) , published in 
the Gazette of Pakistan (Extraordinary), Part I, dated July 2, 2007, pp. 436-1000, s. 7(1)(a)(i) & (ii). 
6Substituted for the words , brackets and figures “Companies Ordinance of 1984 (XLVII of 1984)”  by the Companies Profits (Workers’ 
Participation) (Amendment) Act 2021 (XXVIII of 2021), publi shed in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp . 1295-1299, 
s. 5(a). 
7The Federal Government declared each of the following to be a company for the purposes of the Act, namely: –  
(i) Any Companies incorporated, registered or established outside Pakistan which is engaged in industrial undertaking in Pakistan.  
(ii) Any partnership, association of persons (including consortium, syndicate or joint venture) or proprietorship which is engaged  in an 
industrial undertaking in Pakistan.  
(iii) Any industrial undertaking which is set up as a department activity of , the Federal or Provincial Government of a body corporate 
established under any law for the time being in force. See Gazette of Pakistan (Extraordinary), dated July 31, 1968, p. 775. 
be a company for the purpose of this Act; 
3
[(bb) “Committee” m eans the Punjab  Companies Profits Workers 
Participation Committee constituted under the Act;] 
(c) "Fund" means a Workers Participation Fund established under section 
3; 
4
[(cc) “Government” means Government of the Punjab;] 
5[(ccc)  “Institution” means the Employees’ Social Security Institution 
established under the Provincial Employees’ Social Security 
Ordinance, 1965 (X of 1965);] 
6
[(d) "profits" in relation to a company means such ne t profits (excluding 
profits from sale of the whole or part of the undertaking, profits by way 
of premium on shares sold, dividend income, profit s from dealing in 
real estate, notional and unrealized accounting adjustments and 
bounties or subsidies ) as are  attributable to its business, trade, 
undertaking or other operations in Pakistan;] 
7
[(dd) "rules" means rules made under this Act;] 
(e) "scheme" means the scheme set out in the Schedule; 
8
[
9
[(f) “worker” in relation to a company means an employee of the c ompany 
including an employee hired by the company itself or through a 
contractor and who is a worker in terms of clause (xxxi) of section 2 of 
the Punjab Industrial Relations Act 2010 (XIX of 2010) and has been 
working for or in the company for a period of not less than six months.]] 
10
[3. Establishment of Fund .– (1) Every company to which the scheme applies 
shall– 
(a) establish a Workers Participation Fund in accordance with the scheme 
as soon as the accounts for the year in which the scheme becomes 
                                                                                                                                                                                     
1Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
2Substituted for the words “Federal Government”  by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 1, 2021, pp. 1295-1299, s. 3(a). 
3Inserted by the Act ibid., s. 5(b). 
4Ibid., s. 5(c). 
5Inserted by the Companies Profits (Workers Participation) (Amendment) Act 2025 (XXXIX of 2025), published in the Gazette of 
Pakistan (Extraordinary), dated: 30 May 2025, p 4773, s. 2. 
6Substituted by the Act ibid., s. 5(d). 
7Inserted by the  Companies Profits ( Workers Participation) (Amendment) Ordinanc e, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 2. 
8Substituted by the Finance Act, 2006 (III of 2006), published in the Gazette of Pakistan (Extraordinary), Part I, dated July 1, 
2006, pp. 83-87, s. 7(1). 
9Substituted by the Companies Profits (Workers’ Participation) (Amendment) Act 2021 (XXVIII of 2020), published in the Punjab 
Gazette (Extraordinary), dated October 1, 2021, pp. 1295-1299, s. 5(e). 
10Substituted by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 3.  
applicable to it are finalised, but not later than nine months after the 
close of that year; 
1
[*] 
2
[
3
[
4
[
5
[(b) subject to adjustments, if any, pay every year to the Fund not 
later than nine months after the close of that year five percent of its 
profits during suc h year and the Government may, for sufficient 
reasons, extend such time period for one month; and]]]] 
(c) furnish to the 
6
[
7
[Government]] and the Board, not later than nine 
months after the close of every year of account, its audited accounts 
for that year, duly signed by its auditors.]] 
 (2) The amount paid to the Fund under clause (b) of sub -section (1) in 
relation to a year shall be deemed to have been allocated to the Fund on the first day 
of the year next succeeding that year.] 
8
[4. Management of the F und.– (1) As soon as may be 
9
[but not later than two 
months] after the establishment by a company of a Fund under section 3, there shall 
be constituted a Board of Trustees consisting of the following trustees, namely:–  
(a) two persons elected by the worke rs of the company from amongst 
themselves; and  
(b) two persons nominated by the management of the company of whom 
at least one shall be a person from the accounts branch of the 
company. 
 (2) The persons holding office as trustees shall elect for one year a person 
to be the Chairman of the Board alternately from amongst the trustees elected under 
clause (a) of sub -section (1) and those nominated under clause (b) of that sub -
section, the first Chairman being from amongst the latter.  
 (3) A trustee shall, un less he sooner ceases to represent the interest he 
was elected or nominated to represent, hold office for such term and on such 
conditions as may be prescribed by rules.  
 (4) All decisions of the Board shall be expressed in terms of the opinion of 
                                                           
1Omitted the word “and” by the Labour Laws (Ame ndment) Act, 1977 (XVII of 1977); assented to by the President on May 5, 
1977, published in the Gazette of Pakistan (Extraordinary), dated May 9, 1977, pp. 238-244, s. 2 read with the First Schedule. 
2Substituted by the Labour Laws  (Amendment) Ordinance, 1 972 ( IX of 1972), published in the Gazette of Pakistan 
(Extraordinary), dated April 13, 1972, s. 2 read with First Schedule, Serial No. 6. 
3Substituted by the Companies Profits (Workers Participation) (Amendment) Act, 1973 (XX of 1973), published in the Gazette of 
Pakistan (Extraordinary), dated February 7, 1973, pp. 49-50, s. 2(a).  
4Substituted by the Labour Laws (Amendment) Act, 1977 (XVII of 1977); assented to by the President on May 5, 1977, 
published in the Gazette of Pakistan (Extraordinary), Part I, dated May 9, 1977, pp. 238-244, s. 2 read with the First Schedule, 
Serial No. 5. 
5Substituted by the Companies Profits (Workers’ Participation) (Amendment) Act 2021 (XXVIII of 2020), published in the 
Punjab Gazette (Extraordinary), dated October 1, 2021, pp. 1295-1299, s. 6. 
6Ibid., s. 3. 
7Substituted for the words “Federal Government” by the Act ibid., s. 3(a). 
8Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 3. 
9Inserted by the Labour Laws (Amendment) Act, 1977 (XVII of 1977); assented to by the President on May 5, 1977, published 
in the Gazette of Pakistan (Extraordinary), Part I, dated May 9, 1977, pp. 238-244, s. 2 read with the First Schedule, Serial No. 
5. 
the majority of the trustees and, in the event of the trustees being equally divided in 
their opinions, the Chairman shall have and exercise a second or casting vote.  
 (5) The Board shall manage and administer the Fund in accordance with 
the provisions of this Act, the scheme and any rules made in this behalf.  
 (6) The Board shall, in the exercise of its powers and performance of its 
functions under this Act, be subject to such direction s as the 
1
[
2
[Government]] may, 
from time to time, give.  
 (7) The 
3
[
4
[Government]], if it is of opinion that a trustee or a Board has 
been persistently failing in the performance of his or its functions or has generally 
been acting in a manner inconsistent with the objects and interests of the Fund, may, 
after giving such trustee or, as the case may be, the Board, an opportunity of 
showing cause against it by order,–  
(a) remove such trustee from his office or direct that the Board shall stand 
superseded for such period as may be specified in the order; and 
(b) direct that, pending the election or nomination of a person in place of 
the trustee removed from office or, as the case may be, the 
reconstitution of the Board, the powers and functions of the trustee so 
removed or the Board shall be exercised and performed by a person 
specified in the order.  
 (8) A casual vacancy in the office of a trustee shall be filled as soon as 
may be by the election or, as the case may be, nomination of another person and the 
person elected or nominated to fill such vacancy shall hold office for the un expired 
term of his predecessor.  
 (9) Upon the supersession of a Board under sub -section (7), the trustees 
in that Board shall cease to hold office and references to the Board in this Act, the 
scheme and the rules shall be construed as references to the o fficer specified in the 
order under that sub-section.  
 (10) Before the expiry of the period of supersession, the Board shall be re -
constituted in accordance with the provisions of this Act so as to enable it to take 
over its functions upon the expiry of such period.  
 (11) No act or proceeding of the Board shall be invalid or questioned merely 
on the ground of the existence of a vacancy in, or defect in the constitution of, the 
Board.] 
5
[4-A. The Committee .– (1) The Government shall, by notification, const itute a 
                                                           
1Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) r ead with Table of General 
Adaptations. 
2Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
3Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of Gene ral 
Adaptations. 
4Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
5Inserted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXV III of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 7. 
Committee to be called the Punjab Companies ’ Profits Workers’  Participation 
Committee to monitor the implementation of the Act and the scheme thereunder and 
to advise the Government on appropriate administrative, legislative a nd other 
measures essential to achieve the objectives of the Act.  
 (2) The Committee shall consist of the Chairperson and not more than 
eight members, representing the Government, the companies and the workers.  
 (3) The Committee may call for such record or information as may  be 
required for purposes of the implementation of the provisions of the Act or as may be 
prescribed.  
 (4) The company or, as the case may be, the Board shall furnish such 
record or information, within such time, as the Committee may specify.] 
5. Penalty.– 
1
[
2
[(1) Where the company to which the scheme applies fails to 
comply with the provisions of the Act or the scheme, every director, manager or 
other officer responsible for the management of the affairs of the company, shall be 
liable to the administrati ve penalty, not exceeding fifty thousand rupees, in the 
manner prescribed; but, in case of continuing failure, shall be liable to additional 
administrative penalty, not exceeding ten thousand rupees, for every day after the 
first day during which the failure continues.]] 
 
3
[(2) Where a company to which the scheme applies fails to comply with the 
orders of the committee under subsection (3) of section 4A, every director, manager 
or other officer responsible for the management of the affairs of the company, s hall 
be liable to the administrative penalty, not exceeding one hundred thousand rupees, 
in the manner prescribed; but, in case of continuing failure, shall be liable to 
additional administrative penalty, not exceeding twenty thousand rupees, for every 
day after the first day during which the failure continues.] 
 (3) A penalty imposed by an order under sub section 
4
[(1)] shall, if it is not 
paid within the time specified in the order, be recoverable as an arrear of land 
revenue. 
 (4) The 
5
[
6
[7[Institution]]] may, upon an application made in this behalf by 
                                                           
1Substituted by the Labour Laws (Amendment) Act, 1977 (XVII of 1977); assented to by the President on May 5, 1977, 
published in the Gazette of Pakistan (Extraordinary), Part I, dated May 9, 1977, pp. 238-244, s. 2 read with the First Schedule, 
Serial No. 5. 
2Substituted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXVIII of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 8(a). 
3Inserted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXV III of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 8(b). 
4Substituted for the brackets and figure “(2)” by the Labour Laws (Amendment) Act, 1977 (XVII of 1977); assented to by the 
President on May 5, 1977, published in the Gazette of Pakistan ( Extraordinary), Part I, dated May 9, 1977, pp. 238 -244, s. 2 
read with the First Schedule, Serial No. 5. 
5Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
6Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
7Substituted by the Companies Profits (Workers Participation) (Amendment) Act 2025 (XXXIX of 2025), published in the 
Gazette of Pakistan (Extraordinary), dated: 30 May 2025, p 4773, s.3(a).   
any person aggrieved by an order made under sub-section (1) 
1
[***] within a period of 
six months from the date of the order, review the order and may upon such review, 
pass such orders as it may think fit. 
 
2
[
3
[(5) The outstanding amounts of five percent of the profits and penalty 
imposed by an order under subsection (1) shall, if it is not paid accordingly within the 
time specified in the order, be recoverable 4[by the Institution] as arrears of land 
revenue under the Land Revenue Act, 1967 (XVII of 1967 ) and be deposited in the 
Fund.]] 
 
5
[(6) Notwithstanding anything contained in this Act or the scheme, if a 
defaulting company complies with the provisions of section 3 and distributes the 
benefits in accordance with paragraph 4 of the scheme for the period of default on or 
before the date fixed by the Government, no such penalty shall be levied and the 
company shall not be liable to pay interest as provided in paragraph 2 of the 
scheme.] 
(7) The Institution shall be entitled to such recovery charges under the Act 
as may be determined by the Committee. 
6
[6. Power to call for information .– The 
7
[
8
[
9
[Institution]]] may, at any time, call 
upon a company or a Board to furnish it with such information and documents, 
including the records of the proceedings of the company or the Board, as may be 
relevant or useful for the purposes of, or necessary for ensuring proper compliance 
with, the provisions of this Act, the rules and the scheme.]  
10
[7. Settlement of disputes, e tc.– (1) Any difference arising between the Board 
and the company relating to the administration of the scheme shall be reported to the 
11
[
1
[
2
[Institution]]] whose decision thereon shall be final.  
                                                           
1Omitted the words, brackets and figure “ or sub-section (2)” by the Labour Laws (Amendment) Act, 1977 (XVII of 1977); 
assented to by the President on May 5, 1977, published in the Gazette of Pakistan (Extraordinary), Part I, dated May 9, 1977, 
pp. 238-244, s. 2 read with the First Schedule, Serial No 5. 
2Added by the Finance Act, 2006 (III of 2006), published in the Gazette of Pakistan (Extraordinary), Part I, dated July 1, 2006, 
pp. 83-87, s. 7(2). 
3Substituted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXVIII of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 8(c). 
4Inserted by the Companies Profits (Workers Participation) (Amendment) Act 2025 (XXXIX of 2025), published in the Gazette of 
Pakistan (Extraordinary), dated: 30 May 2025, p 4773, s. 3(b).    
5Added by the Act ibid. 
6Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 4. 
7Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Artic le 2(3) read with Table of General 
Adaptations. 
8Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
9Substituted for the word  “Government” by the Companies Profits (Workers Participation) (Amendment) Act 202 5 (XXXIX of 
2025), published in the Punjab Gazette (Extraordinary), dated: 30 May 2025, p. 4773, s. 4. 
10Substituted by the C ompanies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 4. 
11Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 197 5 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
 (2) All claims of a worker relating to the benefits of the  scheme, whether 
against the Board or the company, shall be settled in the same manner as is 
provided for in the Payment of Wages Act, 1936 (IV of 1936), for the settlement of  
claims arising out of deductions from wages.]  
3
[8. Delegation of power.– The 
4
[
5
[Government]] may, by notification in the official 
Gazette, direct that all or any of its powers or functions under  this Act
6
 may, subject 
to such limitations, restrictions or conditions, if any, as may be specified in the 
notification, be exercised or pe rformed also by any officer subordinate to it or by any 
authority so specified.]  
7
[8A. Inspectors.– (1) The 8[Institution] may, by notification in the official Gazette, 
appoint such persons, in such manner, as may be prescribed, to be the Inspectors 
for t he purposes of this Act within such local limits as it may assign to them 
respectively.  
 (2) No person shall be appointed to be an Inspector under subsection (1) 
or have been so appointed, continue to hold office, who is or becomes directly or 
indirectly interested in a company or in an industrial undertaking, process or 
business carried on by it.  
 (3) Every Inspector shall be deemed to be a public servant within the 
meaning of section 21 of the Pakistan Penal Code 1860 (XLV of 1860) and shall be 
responsible to the Committee.  
8B. Powers of Inspector .– (1) Subject to any rules made by the Government in 
this behalf, an Inspector, within the local limits of his jurisdiction shall have the 
powers to:  
(a) enter into any place which is or which he has reason t o believe to be, 
used as an industrial undertaking or capable of being declared to be an 
industrial undertaking or company under the provisions of this Act;  
(b) make such examination of the premises and plant and of any 
prescribed registers, record, and t ake on the spot or otherwise such 
evidence of persons or call for an information as he may deem 
                                                                                                                                                                                     
1Substituted for the words “Federal Government” by the Companies Profits (Workers Participa tion) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
2Substituted for the word  “Government” by the Companies Profits (Workers Participation) (Amendment) Act 202 5 (XXXIX of 
2025), published in the Punjab Gazette (Extraordinary), dated: 30 May 2025, p. 4773, s.4. 
 
3Substituted by the Companies  Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 4. 
4Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Tabl e of General 
Adaptations. 
5Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
6Printed in the Gazette as “Ordinance”.  
7Inserted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXV III of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 9. 
8Substituted for the word “Government” by the Companies Profits (Workers Participation) (Amendment) Act 2025 (XXXIX of 
2025), published in the Punjab Gazette (Extraordinary), dated: 30 May 2025, p. 4773, s.6.  
necessary for carrying out the purposes of this Act; and  
(c) exercise such other powers as may be necessary for carrying out the 
purposes of this Act:  
 provided that no one shall be required under this section to answer any 
question or give an evidence tending to criminate himself.  
 (2) An Inspector shall report the matter to the Committee, if he found any 
company or industrial undertaking to which the scheme applies, within the local 
limits for which he is appointed has failed to comply with any of the provisions of 
this Act or the scheme for taking further necessary action under this Act.  
8C. Power to amend the Schedule.– The Government may, by notification in the 
official Gazette, amend the Schedule.] 
1
[9. Power to make rules.– The 
2
[
3
[Government]] may make rules
4
 to carry out the 
purposes of this Act.]  
5
[10. Act to override other laws .– The provisions of this Act shall have  effect 
notwithstanding anything contained in any other law for the time being in force, or in 
any contract or the memorandum or articles of association of a company.] 
                                                           
1Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 4. 
2Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pa kistan (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
3Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
4Federal Government made rules titled “the Companies Profits (Workers Participation) Rules, 1971”, published in the Gazette of 
Pakistan (Extraordinary), dated August 20, 1971, pp. 1038-1042. 
5Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 4. 
THE SCHEDULE 
SCHEME 
[(See section 2(e)] 
1. Scope of the scheme.– The scheme applies to all companies 
1
[*] engaged in 
industrial undertakings which satisfy any one of the following conditions, and to such 
other companies as the 
2
[
3
[Government]] may, by notification in the official Gazette, 
specify in this behalf, namely:– 
(i) The number of workers employed by the company 
4
[***] at any time  
during a year is 
5
[50] or more. 
(ii) The paid-up capital of the company as on the last day of its accounting 
year is Rs. 20 lakhs or more. 
(iii) The value of the fixed assets of the company (at cost) as on the last 
day of the accounting year is Rs. 40 lakhs or more 
6
[:] 
7
[Provided that for the companies established on or after 1 st day of July 
2006,– 
(a) clause (ii) shall have effect as if for the figure and word “20 lacs” 
the figure and word “5 million” were substituted; and 
(b) clause (iii) shall have effect as if for the figure and word “40 lacs” 
the figure and word “20 million” were substituted.] 
8
[Explanation.– In this scheme,–  
(a) "industrial undertaking" means an institution, organization, enterprise or 
establishment which involves the use of electrical, mechanical, thermal, 
nuclear or any other form of energy transmitted mechanically and not 
generated by human or animal agency and which is engaged in any 
one or more of the following operations, namely:–  
(i) the subjection of goods or materials to any ma nufacturing, 
assembly, finishing or other artificial or natural process, which 
changes their original condition or adds to their value; 
(ii) 
1
[ * * * * * * * *   ] 
                                                           
1Omitted the word “primarily” by the Co mpanies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), 
published in the Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 5(1). 
2Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1 975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
3Substituted for the words “Federal Government” by the Companies Profits (Workers Partici pation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
4Omitted the words “in any shift” by the Companies Profits (Workers Participation) (Amendment) Act, 1973 (XX of 1973), 
published in the Gazette of Pakistan (Extraordinary), dated February 7, 1973, pp. 49-50, s. 3(i).  
5Substituted for the figure “100” by the Act ibid., s. 3(ii). 
6Substituted for the full stop by the Finance Act, 2006 (III of 2006), published in the Gazette of Pakistan (Extraordinary), Part I, 
dated July 1, 2006, pp. 83-87, s. 7(3)(a). 
7Added by the Act ibid. 
8Added by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the Gazette 
of Pakistan (Extraordinary), dated July 1, 1970, s. 5(2). 
(iii) the transformation, generation, conversion, transmission or 
distribution of electrical energy, including hydraulic power; 
2
[*] 
(iv) the working of a mine, oil -well or any other source of mineral 
deposit, including blending, refining and purification of oils and 
gases; 
3
[(v) a factory as defined under the Factories Act, 1934 (XXV of 
1934);  
(vi) a commercial establishment as defined under the Industrial and 
Commercial Employment (Standing Orders) Ordinance, 1968 
(VI of 1968); and 
(vii) a construction industry as defined under the Industrial and 
Commercial Employment (Standing Orders) Ordinanc e, 1968 
(VI of 1968).] 
and includes companies engaged in the marketing and 
distribution of gas or oil or in the carriage of men or goods by 
sea or air, and any other institution, organisation, enterprise or 
establishment which th e 
4
[
5
[Government]] may, by notification in 
the official Gazette, declare to be an industrial undertaking for 
the purposes of this scheme; and  
(b) references to the paid -up capital and the value of the fixed assets of 
the company shall, in the case of a company incorporated outside 
Pakistan but having a branch in Pakistan, be construed as references 
respectively to the capital invested in such branch and the value of the 
fixed assets of the branch.] 
6
[2. Investment of Fund.– (1) The amount allocated or accruing to the Fund shall 
be a vailable to the company for its business operations. The company may, 
however, request the Board to utilize the amount in the Fund for investment under 
sub-paragraph (7) and the Board may decide to so invest the amount. 
 (2) The company shall pay to the Fu nd in respect of the amount in the 
Fund available to it for its business operations as aforesaid interest at the rate of 2 
1/2 percent above the bank rate or 75 per cent of the rate at which dividend is 
declared on its ordinary shares, whichever is higher. In case there is more than one 
class of ordinary shares on which different rates of dividend have been declared, 
then the weighted average of the different rates of dividend shall be taken for the 
purpose of determining the rate of interest. The interest to the Fund shall accrue on 
                                                                                                                                                                                     
1Omitted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXV III of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 10(a). 
2Ibid., s. 10(a)(ii). 
3Added by the Act ibid. 
4Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
5Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(b). 
6Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 5(3).  
and from the first day  of the year next succeeding the year in which the scheme 
becomes applicable to the company. Even when the company does not wish to 
utilize the amount available to it under sub -paragraph (1), interest at th e rate 
aforesaid shall be payable by the company for the period between the date of 
allocation of any amount to the Fund and the date of its investment under sub -
paragraph (7). 
 (3) If at any time after the establishment of the Fund, the company raises 
any additional capital, otherwise than through the issue of bonus or bonus shares, 
the Fund shall have the first option to convert any amount available to the company 
under sub-paragraph (1) or any of the assets of the Fund into ordinary equity capital 
up to a ceiling of 20 per cent of the paid up capital of the company prior to such 
conversion or 50 per cent of the additional capital, whichever is less. 
Explanation.– In this sub-paragraph, "additional capital" does not include any capital 
offered or to be offered to foreign participants of the company. 
 (4) For the exercise of the right of conversion under sub -paragraph (3), the 
Board shall be given sufficient time to sell assets of the Fund to realise the amount 
needed for subscription to the additional issue of capital by the company. 
 (5) The shares acquired in the manner set out in sub -paragraph (3) shall 
participate in future bonus and right issues in the same manner as other shares. 
 (6) The shares acquired in the manner set out in sub -paragraph (3) shall 
carry voting rights in the same manner as other shares and such voting rights shall 
be exercised by the Board on behalf of the Fund. 
 (7) The amount in the Fund which, under sub -paragraph (1), the company 
has requested to be utilized for investment under this paragraph may be invested by 
the Board for the purchase of any of the following, namely:– 
(a) I.C. P. Mutual Fund Certificates; 
(b) National Investment Trust (Unit) Certificates; 
(c) Government securities including Defence and Postal Savings 
Certificates; and 
(d) any other securities approved for the purpose by the 
1
[
2
[Government]]. 
3
[3. Eligibility to benefits of scheme .– All workers shall be eligible to the 
benefits of the scheme and to participate in the Fund. However, a worker not 
completing six mo nths of employment with the company during a year of account 
shall not participate in the Fund in respect of that year.] 
4
[4. Distribution of benefits to workers .– The share of a worker in the annual 
allocation to the Fund shall be expressed in units or fractions of units (worked out to 
                                                           
1Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the Gazette of 
Pakistan (Extraordinary), Part I, dated August 1, 1975, pp. 435-467, Article 2(3) read with Table of General Adaptations. 
2Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXVI II of 
2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(b). 
3Substituted by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the Gazette of 
Pakistan (Extraordinary), dated July 1, 1970, s. 5(4).  
4Ibid. 
two places of decimal) of the face value of Rs. 10 determined in the following 
manner, namely:– 
1
[(a) The number of available units shall be so divided into three parts for 
the three categories of workers mentioned below that a worker in the 
first of those categories gets four units for each two units that a worker 
in the second of those categories gets or for each one unit that a 
worker in the last of these categories gets. 
Categories 
2
[
3
[
4
[1. Workers drawing average monthly  wages not less than the 
minimum wages for unskilled workers fixed, from time to time, by 
the Government. 
2. Workers drawing average monthly wages exceeding the 
minimum wages for unskilled workers fixed, from time to time, by 
the Government but not exceedi ng five thousand rupees in 
excess thereof. 
3. Workers drawing average monthly wages exceeding upper level 
of wages fixed for category 2.]]]] 
(c) The number of units available to each category of workers shall be 
divided equally among all the workers in tha t category to determine the 
share of each worker of that category. 
5
[
6
[(d) Notwithstanding anything contained in this scheme, no worker shall, in 
any one year, be entitled out of the annual allocation of units exceeding 
the amount of four times the minimum  wages for unskilled workers as 
given under the Punjab Minimum Wages Act 2019 in value in so far as 
such allocation is relatable to clause (b) of subsection (1) of section (3). 
Any amount left out of the annual allocation after the units have been 
so alloc ated shall be transferred to the Fund established under the 
Punjab Workers Welfare Fund Act 2019. No part of such amount shall 
be deemed to be included in the net asset value of Fund established 
under this Act and no individual worker shall have any lien o n this 
amount by virtue of holding any units.] 
Explanation.– In this paragraph, “average monthly wages” means total 
wages drawn during the year of account divided by 12, or by the number of 
months a worker actually worked during a year in respect of which he is 
                                                           
1Substituted by the Labour Laws (Amendment) Ordinance, 1972 (IX of 1972), published in the Gazette of Pakistan (Extraordinary), 
dated April 13, 1972, s. 2 read with the First Schedule, Serial No. 6. 
2Substituted by the Finance Act, 2006 (III of 2006), published in the Gazette of Pakistan (Extraordinary), Part I, dated July 1, 2006, pp.  
83-87, s. 7(3)(b)(i). 
3Substituted by the Finance Act, 2007 (IV of  2007), published in the Gazette of Pakistan (Extraordinary), Part I, dated July 2, 2007, 
pp.436-1000, s. 7(3)(a). 
4Substituted by the Companies Profits (Workers Participation) (Amendment) Act 2021 (XXVIII of 2021), published in the Punjab Gazette 
(Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 10(b). 
5Substituted by the Labour Laws (Amendment) Ordinance, 1972 (IX of 1972), published in the Gazette of Pakistan 
(Extraordinary), dated April 13, 1972, s. 2 read with the First Schedule, Serial No. 6. 
6Substituted by the Companies Profits (Workers’ Participation) (Amendment) Act 2021 (XXVIII of 2021), published in the Punjab 
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299 s. 10(c). 
entitled to the benefit under the scheme, as the case may be, and “wages” 
has the same meaning as in clause (vi) of section 2 of the Payment of Wages 
Act, 1936 (IV of 1936); but does not include any overtime allowance, bonus 
and gratuity or provident fund payable.] 
5. Disbursement of benefits.– The disbursement of the benefits from the Fund 
shall be as under:– 
(a) 100 per cent of the annual income of the Fund, including capital gains 
realized, shall be distributed each year to workers in proportion to their 
units of entitlement. 
1
[(b) A worker who voluntarily leaves the employment of the company or 
whose services are terminated shall be entitled to receive 100 per cent 
of the net asset value of the units standing in his name.] 
2
[(c) * * * * * * * * *   ] 
(d) * * * * * * * * *   ] 
(e) * * * * * * * * *   ] 
3
[(f) A worker who continues in the service of the company shall be entitled 
to receive 100 per cent of the net asset value of the units in his name 
each year or he may choose to leave his share in the Fund:  
Provided that a worker while in employment may choose to encash all 
the units standing in his name at any time at his discretion.] 
(g) A worker, in the event of his retirement or, his nominated beneficiary, in 
the event of the worker's death (from whatsoever cause) while in the 
employment of the company, shall receive 100 per cent of the net 
asset value of the units standing in the worker's name 
4
[***]. 
6. Definition of the net asset value of the unit .– To determine the net asset 
value of a unit; th e total net assets of the Fund, namely, market value of the 
securities, cash and other assets resulting from the investment and re-investment, 
capital accretion thereto and all incomes of any kind rising there from shall be 
divided by the number of units in the Fund. Net  asset value of the entire Fund shall 
be computed once every year and each worker's unit entitlement determined at the 
same time. Additional units will be given to the workers according to the amount they 
voluntarily contribute to the Fund. 
5
[7. Employee's own contribution .– A worker may voluntarily choose to 
contribute a part of his wages, cash bonus, dividend or interest to the Fund. For each 
unit of contribution, he shall receive credit for 1 -1/4 units. Contribution received 
                                                           
1Substituted by the Companies Profits (Workers Participa tion) (Amendment) Act, 1973 (XX of 1973); assented to by the 
President on February 4, 1973, published in the Gazette of Pakistan (Extraordinary), dated  February 7, 1973, pp. 49 -50, s. 
3(3)(i). 
2Omitted by the Act ibid., s. 3(3)(ii). 
3Substituted by the Act ibid., s. 3(3)(iii). 
4Omitted the words “irrespective of the period of employment” by the Act ibid., s. 3(3)(iv). 
5Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 5(6). 
during the course of a year of account shall, however, be deemed to be contribution 
received on the last day of that year. If at any time a worker chooses to leave the 
employment of the company or 
1
[his services are terminated or in the event of his 
retirement or death or on the expiry of three years from the date he voluntarily 
chooses to contribute a part of his wages, cash bonus, dividend or interest to the 
Fund, he, at his option, or, in the event of his death, his nominated beneficiary, may], 
receive, the net asset value of the units representing his contribution. The 
contribution by a worker in any one year of account shall not exceed 10 per cent of 
his annual wages during such year.] 
2
[8. Fiscal Concessions to the Companies.– * * * *   ] 
3
[9. Tax treatment of the Income of the Fund.– The Government may approach 
the Federal Government for exemption from the levy of income tax on the income of 
the Fund including capital gains.] 
10. Tax treatment of the income to the workers .– All sums paid out by the 
Fund shall be exempt from income-tax in the hands of the workers. 
4
[11. Working and location of the Board of Trustees .– The office of the Board of 
Trustees shall be located at the factory premises or, if there is more than one factory 
run by the company, at the registered head  office of the company. All expenses of 
the Board, including the cost of maintaining accounts, shall be borne by the 
company.] 
12. Audit of the Fund accounts .– The Fund accounts shall be audited annually 
at the company's expense in the same manner as the accou nts of the company are 
audited: 
Provided that the 
5
[
6
[Government]] may, at its own cost, appoint independent 
accountants for a special audit of the accounts of the Fund. 
13. Scheme's benefits to be in addition to other benefits .– The benefits to a 
worker under this scheme shall be in addition to, and not in derogation or substitution 
of, any other benefits to which the worker may  be entitled under any other law, 
contract, terms and conditions of employment or otherwise. 
                                                           
1Substituted for the words, figure and commas “on the expiry of 3 years from the date he becomes entitled to the benefits of the 
scheme, he may, at his option” by the Companies Profits (Workers Participation) (Amendment) Act, 1973 (XX of 1973); 
assented to by the President on February 4, 1973, published in the Gazette of Pakistan (Extraordinary), dated  February 7, 
1973, pp. 49-50, s. 3(4). 
2Omitted by the Companies Profits (Workers’ Participation) (Amendment) A ct 2021 (XXVIII of 202 1), published in the Punjab  
Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 10(d). 
3Substituted by the Act ibid., s. 10(e). 
4Substituted by the Companies Profits ( Workers Participation) (Amendment) Ordinance, 1970 ( XII of 1970), published in the 
Gazette of Pakistan (Extraordinary), dated July 1, 1970, s. 5(7). 
5Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan(Extraordinary),  Part I, dated August 1, 1975, pp 435 -467, Article 2(3) read with Table of General 
Adaptations. 
6Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(b). 
1
[14. Special provision for industries wo rking seasonally .– Notwithstanding 
anything contained in this Act or this scheme , the 
2
[
3
[Government]], may, by 
notification in the official Gazette, make special provisions
4
 for the participation of 
workers in the profits of companies engaged in industrial undertakings which operate 
only for a part of the year.] 
5
[15. Companies engaged in more than one industrial undertakings .– 
Notwithstanding anything contained in  this Act or this scheme, the 
6
[
7
[Government]] 
may, at the request of a company which is enga ged in more than one industrial 
undertakings located at different places, permit the splitting up of the Fund amongst 
the various undertakings or groups of undertakings and constitution of a Board of 
Trustees for each such undertaking or group of undertaki ngs; and thereupon the 
provisions of this Act and this scheme shall have effect in relation to such 
undertakings or groups as if each such undertaking or group were a company.] 
8
[16. Entrustment of management of Fund to Investment Corporation of 
Pakistan, etc.– The Board of Trustees may, with the pr ior approval of the 
9
[[
10
[Government]], enter into a contract with the Investment Corporation of Pakistan, 
the National Investment Trust or the National Bank of Pakistan , entrusting the 
management of the Fund to t hat Corporation, Trust or Bank on such fee , which shall 
be payable by the company, and on such terms and conditions as may be mutually 
agreed upon.] 
                                                           
1Added by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the Gazette 
of Pakistan (Extraordinary), dated July 1, 1970, s. 5(8). 
2Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
3Substituted for the words “Federal Government” by the Companies Profits (Workers Participation) (Amendment) Act 2021 
(XXVIII of 2021), published in the Punjab Gazette (Extraordinary), dated October 01, 2021, pp. 1295-1299, s. 3(a). 
4The Federal Government made the following special provisions for the participation of workers in the profit of the companies 
engaged in the following industrial undertakings which operate only for a part of year. 
(I) for the purpose of clause (f) of section 2 of the Act, of Paragra ph 3 of the schedule thereto a worker of an industrial 
undertaking engaged in the manufacturing of sugar, ginning, willing of cotton or processing of Tobacco to which 
paragraph one for the said schedule applies shall be deemed to have completed six months of continuous 
employment with the company and eligible to the benefits of the scheme, if he is in continuous employment of the 
industrial undertaking for not less than half of the period for which undertaking has operated in a year of account.  
(II) For the purpose of disbursement of benefits to workers in accordance with paragraph 5 of the schedule, worker of an 
industrial undertaking which is not in continuous operation for the whole of the year shall be credited–  
(a) with a year of continuous employment if he has been continuous employment with that undertaking for the entire 
period for which it has operated in the year of account; and 
With period of continuous employment as that period bears to the period he continuously worked with the undertaking the 
same proportion as the whole year bears to the total period for which the undertaking operated during a year of account. 
See Gazette of Pakistan (Extraordinary), dated August 20, 1971. 
5Added by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the Gazette 
of Pakistan (Extraordinary), dated July 1, 1970, s. 5(8). 
6Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3) read with Table of General 
Adaptations. 
7Ibid. 
8Added by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (XII of 1970), published in the Gazette 
of Pakistan (Extraordinary), dated July 1, 1970, s. 5(8). 
9Substituted for the words “Central Government” by the Federal Adaptation of Laws Order, 1975 (4 of 1975), published in the 
Gazette of Pakistan  (Extraordinary), Part I, dated August 1, 1975, pp . 435-467, Article 2(3 ) read with Table of General 
Adaptations. 
10Ibid.