What is an employment contract? Why is it important?

An employment contract is an agreement between a worker and an employer about the nature of their relationship. It legally binds the employer and the worker into honoring the actions specified in the contract. For example, a worker agrees to do a particular kind of work and, in recognition of this, an employer agrees to pay the worker a certain amount. Because it is a legal agreement, breaches of contract can be litigated in court. A contract protects the rights of both the worker and the employer by recording what has been agreed by both parties.

Your contract should explain where you are going to work, what duties you will be expected to perform, how much you will be paid and what holidays or time off you will receive. Your contract should also include the contact details of your workplace (like the address and phone number).

The employer should provide you with a copy of the contract to take away before you sign it or agree to anything. If they cannot, this is a warning sign that they may not be an ethical employer. All employees need time to consider the terms in their contract and to fully understand what the employer will expect of them in the workplace.

Your contract should be in your native language. If it is not, please be careful! No responsible employer would ask a potential employee to sign something in a language that they cannot understand. You should request a copy of the contract in your native language and ask your potential employer to explain the document to you.

If you would like the Migrant Resource Centre (MRC) to explain the terms of the contract in more detail, please bring in your contract and we can help go through the terms with you.

What should be included in an employment contract?

At a minimum, contracts need to include:

  • names – your name and the employer’s name or recruitment agency name
  • work location or recruitment agency address
  • start and termination date
  • an outline of the type of work you will be doing
  • how much you will be paid (including details of any deductions or portion of the salary that is automatically sent to your family) and the pay period
  • which holidays or days off you are entitled to (you are entitled to at least one day of rest a week)
  • responsibilities of each party to the contract, you and the recruiting agent or the employer
  • social security
  • termination conditions
  • accommodation, food, clothing (if applicable)
  • insurance costs and medical care
  • transportation of workers to and from work location
  • expenses of transport to and from your home country
  • provisions for repatriating workers

All these pieces of information should be correct and as specific as possible. You do not have to agree to everything in the contract – you have the right to ask for changes to the contract and you have the right to refuse to sign the contract also. The employment contract must also be written in Urdu, English and the language of the destination country complying with all applicable laws and regulations of the destination country.