Labour contracts

Labour contracts

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All workers should have a written employment contract that contains an accurate and complete summary of the terms of employment, including wages, benefits and working conditions. This also counts for foreign, migrant or home workers, who in any case are not to be treated less favourably. If a worker is illiterate, the working conditions should be explained to the worker prior to signing the contract. No workers are to be asked to sign blank papers of any kind. Labour contracts should extend to subcontracted workers. In countries where the law permits apprenticeship programmes, apprentices working on the basis of an apprenticeship contract are acceptable, but whether or not apprentices actually perform an apprentice function must be monitored continuosly.

A labour contract protects both the employer and worker from misunderstandings. It protects the worker from being exploited and the employer from being accountable for incidents beyond the employer’s responsibility.

Home worker is defined as a person who is contracted by a company or by a supplier, sub-supplier or subcontractor, but does not work in the factory or in the factory area

If workers do not directly work for the employer but for the foreman it can lead to poor working conditions such as low pay, excessive and compulsory overtime, poor health and safety in work and living environments etc.


  • Employment contracts state the responsibilities of both parties and contain work assignments, salary agreements (both regular and overtime allowances) and special benefits as well as include a copy of the worker’s identity card (photo and age)
  • The employment contract is signed by both employer and worker—often required by national law
  • The worker has a copy of the contract in a language that he or she understands
  • The employment contracts of migrant, temporary or home workers are equivalent to the standard of the contracts of permanent workers
  • Keep all paperwork for dismissed workers for at least two years (contracts, any disciplinary action taken etc.)
  • Work proactively to outline, define and work collaboratively on addressing the important and growing issue of contract/sub-contracted labour within key sourcing markets
  • Apprentices are subject to the same statutes and enjoy the same protection and benefits as normal workers, e.g. reasonable working hours, opportunities for advancement, increased payment and more permanent employment

More topics

Human rights
Freedom of association
Forced labour
Child labour
Working hours
Labour contracts
Sick leave
Grievance system
Occupational health and safety
Corruption and bribery
Monitoring and evaluation