Workers can seek unpaid wages from trans-provincial firms: Lahore High Court

LAHORE: The Lahore High Court (LHC) has ruled that employees can seek recovery of unpaid wages from trans-provincial companies before the authority constituted under the Payment of Wages Act, 1936.

Justice Asim Hafeez announced a judgment dismissing petitions filed by a private security firm and others challenging the authority’s jurisdiction.

The petitioner company had argued that, being a trans-provincial entity operating across multiple provinces and in Islamabad, disputes relating to employees should fall under the jurisdiction of the National Industrial Relations Commission (NIRC) under the Industrial Relations Act, 2012 rather than the authority established under the Payment of Wages Act.

The petitions landed in the LHC after several employees filed complaints seeking payment of outstanding wages.

Court dismisses pleas challenging wage authority’s powers

The wage authority allowed the claims and in some cases the decisions were upheld by labour courts on appeal.

The companies challenged those proceedings before the high court, claiming the authority lacked jurisdiction over trans-provincial entities.

However, Justice Hafeez rejected this argument, holding that the authority under the Payment of Wages Act has exclusive subject-matter jurisdiction over claims relating to non-payment of wages, regardless of whether the employer is a provincial or trans-provincial establishment.

In his judgment, the judge distinguished between personal jurisdiction - which determines which forum can hear cases involving trans-provincial employers - and subject-matter jurisdiction, which relates to the nature of the dispute itself.

The judge observed that the Industrial Relations Act primarily governs collective labour relations and industrial disputes, while the Payment of Wages Act specifically deals with the protection and timely payment of wages.

“The subject matter jurisdiction or cause of action jurisdiction of the Authority under the Act of 1936 is exclusive, to the extent of claim of payment of wages and same is independent and survives irrespective of claimed trans-provincial status,” the judge held.

The judge further noted that the two laws operate in distinct and mutually exclusive spheres and interpreting the Industrial Relations Act to cover wage recovery claims would render the Payment of Wages Act redundant.

Concluding the judgement, Justice Hafeez ruled that complaints seeking recovery of unpaid wages are maintainable before the authority under the Payment of Wages Act even when the employer is a trans-provincial entity.

Published in Dawn, March 15th, 2026

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