The rule is that the kafeel cannot confiscate or keep your passport. However, in practice, the kafeel may keep the passport to ensure that you will continue to work for him. This would limit your movements and employment options.
If the kafeel keeps your passport, you should try to discuss it with him or with the employer and let them clearly understand that you want the passport to be with you at all times. If the kafeel continues to hold on to your passport, you may report this to the Pakistani Embassy, who, in turn, will either negotiate with the kafeel or with your employer, or they will report it to the local authorities.