Govt allocates Rs 25.3 billion severance package for 8,000 Utility Stores employees

The federal government has finalised a severance package worth Rs 25.3 billion for over 8,000 employees of the Utility Stores Corporation (USC), following the closure of its operations. The package includes compensation for regular employees, as well as contractual workers, daily wagers, and the widows of deceased employees.

According to the Ministry of Industries and Production, the severance package outlines specific amounts for different employee categories. For regular employees, 230 workers with two or fewer years left to serve will receive a total of Rs 357 million. Employees with over 20 years of service, numbering 643, will be compensated with Rs 2.21 billion. 

A larger sum, Rs 10.61 billion, will be allocated to 4,356 employees who have served for less than 20 years, with the total severance for regular employees reaching Rs 13.18 billion.

The 3,323 contractual employees will receive a total severance of Rs 3.6 billion. Compensation for these workers is structured as follows: 41 employees with two or fewer years remaining will be paid Rs 17 million, 649 employees with up to 16 years of service will receive Rs 615 million, and 2,633 employees with over 16 years of service will get Rs 2.97 billion.

For daily wagers, 39 employees with fewer than two years remaining will be compensated with Rs 317 million. Another 1,447 daily wagers with up to 10 years of service will receive Rs 1.5 billion, while 797 employees with more than 15 years of service will be paid Rs 885 million. The total severance for daily wagers amounts to Rs 2.72 billion. Additionally, the severance package includes Rs 5.75 billion for terminal dues and widows’ compensation.

This decision follows the Prime Minister’s directive to discontinue USC operations by July 31, 2025, with the corporation being included in the first phase of the privatization process.