In this article, we examine the Punjab Labour Code, 2026 (the “Code”), a landmark legislative reform enacted to consolidate and modernise Punjab’s labour and employment framework. ABS & Co has reviewed the Code and its implications for businesses operating within the province, particularly in relation to workforce structuring, employment documentation, workplace governance, and compliance obligations arising from the transition to a unified and rights-based employment regime.
The Punjab Labour Code, 2026 introduces a sweeping transformation of the province’s employment law landscape, replacing a fragmented and exclusionary regime with a unified framework that significantly expands the scope of statutory protection to encompass virtually all categories of workers, irrespective of contractual form or designation. Although the Code has been enacted as Act IX of 2026 and received the Governor’s assent on 10 February 2026, its enforcement remains subject to notification by the Government of Punjab in the official Gazette. Until such notification is issued, the existing legal framework continues to remain in force.
At its core, the Code departs from the historical classification-driven approach that distinguished between “workmen” and other categories of employees. Under the previous framework, statutory protections were largely confined to individuals falling within the definition of “workman,” while managerial and supervisory personnel remained governed primarily through contractual arrangements under the doctrine of master and servant. The Code fundamentally restructures this position through the introduction of an expansive concept of “worker,” extending statutory protection across all forms of work irrespective of contractual designation.
The Code also expressly abolishes the doctrine of master and servant and replaces it with a statutory employment regime grounded in enforceable rights and obligations. Employment relationships are now required to operate pursuant to formal employment agreements, while contractual provisions seeking to limit or exclude statutory protections are rendered void. Termination and disciplinary actions are no longer matters of unilateral discretion and are instead subject to requirements of valid cause, procedural fairness, and notice.
In parallel, the Code introduces a layered classification system distinguishing between “workers” and “employees,” while incorporating deeming provisions to prevent the circumvention of statutory obligations through contractors, agency arrangements, internships, or alternative structures. The framework ensures that employment status is determined by the substance of the working relationship rather than contractual labels.
A significant feature of the Code is the formalisation of employment documentation requirements. Employment agreements must contain detailed particulars relating to remuneration, working conditions, leave entitlements, and termination procedures. Employers are also required to communicate contractual terms in a language understood by the employee and maintain comprehensive employment records. Any contractual terms falling below statutory thresholds are automatically overridden.
The rights framework established under the Code operates across multiple tiers. Universal protections applicable to all workers include prohibitions on forced and child labour, anti-discrimination safeguards, occupational safety and health obligations, and collective bargaining rights. Employees are additionally afforded protections relating to wages, working hours, leave entitlements, gratuity, and workplace participation through institutional mechanisms such as Works Councils. The Code further introduces sector-specific protections for workers engaged in agriculture, construction, domestic work, and platform-based services, reflecting the evolving nature of labour markets.
From a commercial and compliance perspective, the Code carries substantial implications for businesses operating within Punjab. The expanded definition of worker significantly broadens the scope of statutory obligations, necessitating a reassessment of workforce classifications, third-party engagements, employment agreements, and internal governance structures. Existing employment documentation and workplace policies will require review and alignment with the new statutory standards, while the introduction of penalties for misclassification and non-compliance further underscores the importance of proactive regulatory preparedness.
The Code represents a decisive transition towards a comprehensive and inclusive labour law framework in Punjab. While its operational enforcement remains pending formal notification, the legislative direction and structural reforms introduced leave little doubt regarding the future trajectory of employment regulation within the province. The present interim phase provides organisations with a critical opportunity to undertake advance compliance measures and prepare for the implementation of the new regime.
ABS & Co’s Corporate and Commercial team continues to advise clients on the implications of the Code, including workforce structuring, employment documentation, and labour law compliance strategies in anticipation of its enforcement.
The ABS & Co team working on this matter was led by Sarjeel Mowahid and included Abdullah Ghias, Kanzal Abbas and Aitzaz Chaudhary.
