Chapter 2: Employment Contracts
- Subject to the provisions of this Labour Code, an employment contract may be oral or written and for a definite or indefinite period, or the performance of a specific
- “Employment Contract” means a contract of service whether expressed or implied and expressed orally or in writing.
- Every employment contract shall contain all such particulars as necessary to define the rights and obligations of the parties, including:
- name of the employer and place of employment;
- name of the worker, place of employment, and any other particulars necessary for identification;
- nature of the employment and position to be held;
- duration of the employment contract;
- an appropriate period of notice to be given by the party wishing to terminate the contract;
- rates of remuneration and method of calculation, the manner and periodicity of payment of wages;
- probation period;
- any special conditions of the contract.
- In case the employment contract is oral, the employer shall provide the above minimum employment particulars in written form.
- Unless written employment contract (or written employment particulars) contravenes the provisions of law, it shall prevail.
- A worker commits gross misconduct if the worker is found to have:
- been rendered unable to perform work effectively due to the consumption of alcoholic drinks, narcotics, psychotropic substances or addictive substances in the workplace;
- been absent from work for more than 72 hours without cause or satisfactory explanation;
- violated the fundamental rights of another worker, including, but not limited to, having sexually harassed another worker;
- assaulted or battered any co-worker or the employer at the workplace;
- negligently or intentionally destroyed or let property of the employer be destroyed, resulting in losses to the employer;
- negligently or intentionally exposed any of workers or workplace to risks;
- breached worker’s obligation to protect and keep secure, confidential information of the employer unless such breach has been obliged by law upon a worker or caused by the employer or to protect the public interest.
- disregard or disobedience of enterprise rules or orders;
- fraud, or dishonesty in connection with the employment;
- improper behaviour, such as drunkenness, or being under the influence of drugs;
- making false or misleading statements;
- A worker shall be entitled to have a representative present during any discussions regarding an allegation of gross misconduct.
- A worker may also terminate a contract in cases where the employer does not follow the contractual obligations like payment of wages.
- An employer may require a worker to serve a probationary period, provided that such probationary period shall not exceed three months.
- A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue their employment during the notice period.
- The employment of a worker shall not be terminated for reasons related to the worker’s conduct or performance before such worker is provided with an opportunity to defend against the allegations made unless the employer cannot reasonably be expected to provide this opportunity.
- A worker whose employment has been terminated shall be entitled, under national law and practice, to-
- a severance allowance or other separation benefits, the amount of which shall depend among other things on length of service and the level of wages, and paid directly by the employer or by a fund constituted by employers’ contributions; or
- benefits from unemployment insurance or assistance or other forms of social security, such as old-age or invalidity benefits, under the ordinary conditions to which such benefits are subject.
 The chapter on employment contract is based on Islamic teachings regarding contracts, especially the contract of marriage and its termination.
Fixed-term contracts are allowed. Prophet Musa (AS) was offered to serve in the employment of Prophet Shuaib (AS) for eight years. The contract was extendable for the next two years. This implies the provision of a fixed-term contract, as well as its renewal.
“He said (to Musa [Moses]): ‘I intend to marry you to one of my two daughters by (the dower) that you serve me on hire for eight years, but if you complete ten (years), it will be (a favour) from you. And I do not want to make it hard for you. If Allah wills, you will find me of the pious”. (28:27)
قَالَ إِنِّي أُرِيدُ أَنْ أُنكِحَكَ إِحْدَى ابْنَتَيَّ هَاتَيْنِ عَلَىٰ أَن تَأْجُرَنِي ثَمَانِيَ حِجَجٍ ۖ فَإِنْ أَتْمَمْتَ عَشْرًا فَمِنْ عِندِكَ ۖ وَمَا أُرِيدُ أَنْ أَشُقَّ عَلَيْكَ ۚ سَتَجِدُنِي إِن شَاءَ اللَّهُ مِنَ الصَّالِحِينَ
While talking about the month of fasting, the Quran again refers to a fixed term for engaging in some activity, i.e., keeping fast in the month of Ramadan.
“The month of Ramadan (is the month) in which the Qur’an has been sent down as guidance for humanity containing clear signs which lead (to the straight road) and distinguishing (the truth from falsehood). Therefore, he who witnesses this month must fast it, and he who is ill or on a journey should complete the count by (fasting on an equal number of) other days. Allah desires ease for you and does not desire hardship for you so that you complete the prescribed number of fasting days, and that you glorify Him for the guidance which He has blessed you with, and that you may become grateful”. (02:185)
شَهْرُ رَمَضَانَ الَّذِي أُنزِلَ فِيهِ الْقُرْآنُ هُدًى لِّلنَّاسِ وَبَيِّنَاتٍ مِّنَ الْهُدَىٰ وَالْفُرْقَانِ ۚ فَمَن شَهِدَ مِنكُمُ الشَّهْرَ فَلْيَصُمْهُ ۖ وَمَن كَانَ مَرِيضًا أَوْ عَلَىٰ سَفَرٍ فَعِدَّةٌ مِّنْ أَيَّامٍ أُخَرَ ۗ يُرِيدُ اللَّهُ بِكُمُ الْيُسْرَ وَلَا يُرِيدُ بِكُمُ الْعُسْرَ وَلِتُكْمِلُوا الْعِدَّةَ وَلِتُكَبِّرُوا اللَّهَ عَلَىٰ مَا هَدَاكُمْ وَلَعَلَّكُمْ تَشْكُرُونَ
A fixed-term contract and its extension are provided in the Quran. Just refer to the case of Musa (AS), again.
وَوَاعَدْنَا مُوسَىٰ ثَلَاثِينَ لَيْلَةً وَأَتْمَمْنَاهَا بِعَشْرٍ فَتَمَّ مِيقَاتُ رَبِّهِ أَرْبَعِينَ لَيْلَةً ۚ وَقَالَ مُوسَىٰ لِأَخِيهِ هَارُونَ اخْلُفْنِي فِي قَوْمِي وَأَصْلِحْ وَلَا تَتَّبِعْ سَبِيلَ الْمُفْسِدِينَ
“And We promised Musa (Moses) thirty nights, and We made it good by adding to it (another) ten (nights). So, the term (appointed) by his Lord was completed in forty nights. And Musa (Moses) said to his brother Harun (Aaron): ‘(In the meanwhile,) officiate at my seat amongst my people and continue to do (their) reformation, and follow not the way of those who create mischief (i.e., prevent them from treading this path)”. (07:142)
 A contract for an indefinite period is specified in the following hadith where a slave is freed with a condition.
“Safinah (RA) said: I was a slave of Umm Salamah (RA), and she said: I shall emancipate you, but I stipulate that you must serve the Messenger of Allah (ﷺ) as long as you live. I said: Even if you do not make a stipulation, I shall not leave the Messenger of Allah (ﷺ). She then emancipated me and made the stipulation with me”. (Sunan Abi Dawud: 3932)
قَالَ كُنْتُ مَمْلُوكًا لأُمِّ سَلَمَةَ فَقَالَتْ أُعْتِقُكَ وَأَشْتَرِطُ عَلَيْكَ أَنْ تَخْدُمَ رَسُولَ اللَّهِ صلى الله عليه وسلم مَا عِشْتَ . فَقُلْتُ إِنْ لَمْ تَشْتَرِطِي عَلَىَّ مَا فَارَقْتُ رَسُولَ اللَّهِ صلى الله عليه وسلم مَا عِشْتُ فَأَعْتَقَتْنِي وَاشْتَرَطَتْ عَلَىَّ
In another narration, it is narrated that the condition for emancipation was that Safinah (RA) serves the Prophet (ﷺ) till the time the Prophet (ﷺ) is alive.(Sunan Ibn Majah: Book 19, hadith 2622)
أَعْتَقَتْنِي أُمُّ سَلَمَةَ وَشَرَطَتْ عَلَيَّ خِدْمَةَ رَسُولِ اللَّهِ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ مَا عَاشَ
 This following verse and hadith are related to task-specific contracts and payment of compensation of completion of such task.
قَالُوا نَفْقِدُ صُوَاعَ الْمَلِكِ وَلِمَن جَاءَ بِهِ حِمْلُ بَعِيرٍ وَأَنَا بِهِ زَعِيمٌ
“They (the servants of the king’s court) said: ‘We are missing the royal goblet, and the man who brings it (after searching) will get a camel’s load of grain as a reward and I pledge myself for it”. (12:72)
“Allah’s Messenger (ﷺ) and Abu Bakr hired a man from the tribe of Bani-Ad-Dil as an expert guide who was a pagan (follower of the religion of the pagans of Quraish). The Prophet (ﷺ) and Abu Bakr gave him their two riding camels and took a promise from him to bring their riding camels in the morning of the third day to the Cave of Thaur”. (Sahih al-Bukhari: 2264)
وَاسْتَأْجَرَ رَسُولُ اللَّهِ صلى الله عليه وسلم وَأَبُو بَكْرٍ رَجُلاً مِنْ بَنِي الدِّيلِ، هَادِيًا خِرِّيتًا وَهْوَ عَلَى دِينِ كُفَّارِ قُرَيْشٍ، فَدَفَعَا إِلَيْهِ رَاحِلَتَيْهِمَا، وَوَاعَدَاهُ غَارَ ثَوْرٍ بَعْدَ ثَلاَثِ لَيَالٍ بِرَاحِلَتَيْهِمَا صُبْحَ ثَلاَثٍ
 All financial contracts must be in the written form. An employment contract, specifying wages, is also a financial contract. Hence, the requirement to have it in written form. Even when employment contracts are oral, employers must provide certain employment particulars in written form.
يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰ أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ ۚ وَلْيَكْتُب بَّيْنَكُمْ كَاتِبٌ بِالْعَدْلِ ۚ وَلَا يَأْبَ كَاتِبٌ أَن يَكْتُبَ كَمَا عَلَّمَهُ اللَّهُ ۚ فَلْيَكْتُبْ وَلْيُمْلِلِ الَّذِي عَلَيْهِ الْحَقُّ وَلْيَتَّقِ اللَّهَ رَبَّهُ وَلَا يَبْخَسْ مِنْهُ شَيْئًا ۚ فَإِن كَانَ الَّذِي عَلَيْهِ الْحَقُّ سَفِيهًا أَوْ ضَعِيفًا أَوْ لَا يَسْتَطِيعُ أَن يُمِلَّ هُوَ فَلْيُمْلِلْ وَلِيُّهُ بِالْعَدْلِ ۚ وَاسْتَشْهِدُوا شَهِيدَيْنِ مِن رِّجَالِكُمْ ۖ فَإِن لَّمْ يَكُونَا رَجُلَيْنِ فَرَجُلٌ وَامْرَأَتَانِ مِمَّن تَرْضَوْنَ مِنَ الشُّهَدَاءِ أَن تَضِلَّ إِحْدَاهُمَا فَتُذَكِّرَ إِحْدَاهُمَا الْأُخْرَىٰ ۚ وَلَا يَأْبَ الشُّهَدَاءُ إِذَا مَا دُعُوا ۚ وَلَا تَسْأَمُوا أَن تَكْتُبُوهُ صَغِيرًا أَوْ كَبِيرًا إِلَىٰ أَجَلِهِ ۚ ذَٰلِكُمْ أَقْسَطُ عِندَ اللَّهِ وَأَقْوَمُ لِلشَّهَادَةِ وَأَدْنَىٰ أَلَّا تَرْتَابُوا ۖ إِلَّا أَن تَكُونَ تِجَارَةً حَاضِرَةً تُدِيرُونَهَا بَيْنَكُمْ فَلَيْسَ عَلَيْكُمْ جُنَاحٌ أَلَّا تَكْتُبُوهَا ۗ وَأَشْهِدُوا إِذَا تَبَايَعْتُمْ ۚ وَلَا يُضَارَّ كَاتِبٌ وَلَا شَهِيدٌ ۚ وَإِن تَفْعَلُوا فَإِنَّهُ فُسُوقٌ بِكُمْ ۗ وَاتَّقُوا اللَّهَ ۖ وَيُعَلِّمُكُمُ اللَّهُ ۗ وَاللَّهُ بِكُلِّ شَيْءٍ عَلِيمٌ
“O, believers! Whenever you strike deals with one another for a fixed period , reduce the transaction to writing. And the scribe amongst you should write it with justice, and should not refuse to write as Allah has taught him to write. So, he should write (i.e., meet the requirements of documentation with utmost honesty, under Islamic law). And he on whom the liability (i.e., debt) falls should dictate the contents of the contract. And he should fear Allah, Who is his Sustainer, and (whilst writing) he should not diminish anything (from the indebted sum). Then if he who has undertaken the liability is mentally deficient or physically weak or cannot dictate the contents, his guardian should dictate with fairness. And get two witnesses out of your men. But if two men are not available, then a man and two women: (they) should be from amongst those whom you like as witnesses (i.e., consider trustworthy), so that if either of the two women forgets, the other may remind her. And the witnesses should not refuse whenever they are called (for evidence). And do not be weary of writing it down for its term, whether the transaction is small or large. This documentation by you is more just in the sight of Allah and makes evidence more solid and nearer to keeping you from doubt, except that if transactions are hand-to-hand which you carry out amongst yourselves, then there is no sin on you if you do not write it down. And take witnesses whenever you bargain amongst yourselves. And let no harm be done to either the scribe or the witness, but if you do so, it will be sheer disobedience on your part. And keep fearing Allah. And Allah grants you knowledge (of the principles of mutual dealing) and Allah knows everything well”. (02:282)
Employment contracts like all contracts and agreements must be through mutual consent. No one can be forced to accept contractual terms which violate their rights. It is not required to have written employment contracts for daily wage workers. It is explained in the above verse in the following words: “If, however, (the transaction) concerns ready merchandise which you transfer directly unto one another, you will incur no sin if you do not write it down”. (02:282)
اِلَّاۤ اَنۡ تَکُوۡنَ تِجَارَۃً حَاضِرَۃً تُدِیۡرُوۡنَہَا بَیۡنَکُمۡ فَلَیۡسَ عَلَیۡکُمۡ جُنَاحٌ اَلَّا تَکۡتُبُوۡہَا
However, we must indicate that hiring workers on daily wage contracts to deprive them of various statutory rights, including the right to various types of leave, social security, and unionization, is against Islamic injunctions.
The Messenger of Allah (ﷺ) said: “Transactions may only be done by mutual consent”. (Sunan Ibn Majah: 2185)
إِنَّمَا الْبَيْعُ عَنْ تَرَاضٍ
It is obligatory to fulfil all the agreements, whether oral or written, clearly defined or implied.
يٰٓاَيُّھَا الَّذِيْنَ اٰمَنُوْٓا اَوْفُوْا بِالْعُقُوْدِ
“O believers! Fulfil (your) promises”. (05:1)
“And always fulfil the promise. No doubt, the promise will be questioned about”. (17:34)
وَأَوْفُوا بِالْعَهْدِ ۖ إِنَّ الْعَهْدَ كَانَ مَسْئُولًا
The persons with disabilities may accept an offer by gestures or through the assistance of others. In this verse, the Prophet Zakariya (AS) directed his nation by signals to glorify Allah. The Holy Prophet (ﷺ) accepted the “Islam” of Sowda A’jamia (RA) by signs as she was mute. (A.Q p.26, VI). So, a written contract will be shown/read before such workers, and their acceptance by signals or gestures will be regarded as signatures if they are illiterate as well. If they are literate, they will sign the contract after reading, hearing or after it is explained to them.
فَخَرَجَ عَلَىٰ قَوْمِهِ مِنَ الْمِحْرَابِ فَأَوْحَىٰ إِلَيْهِمْ أَن سَبِّحُوا بُكْرَةً وَعَشِيًّا
“Then (Zakariya [Zacharias]) came out from his worshipping chamber to his people and conveyed to them (i.e., made them understand) by gestures to glorify (Allah) morning and evening ”. (19:11)
Though, this is more like a sale deed but can be used as a precedent of “written employment contract”.
قَالَ لِي الْعَدَّاءُ بْنُ خَالِدِ بْنِ هَوْذَةَ، أَلَا نُقْرِئُكَ كِتَابًا كَتَبَهُ لِي رَسُولُ اللَّهِ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ؟ قَالَ: قُلْتُ: بَلَى، فَأَخْرَجَ لِي كِتَابًا، فَإِذَا فِيهِ: «هَذَا مَا اشْتَرَى الْعَدَّاءُ بْنُ خَالِدِ بْنِ هَوْذَةَ مِنْ مُحَمَّدٍ رَسُولِ اللَّهِ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ، اشْتَرَى مِنْهُ عَبْدًا أَوْ أَمَةً، لَا دَاءَ، وَلَا غَائِلَةَ، وَلَا خِبْثَةَ، بَيْعَ الْمُسْلِمِ لِلْمُسْلِمِ
It was narrated that ‘Abdul-Majid bin Wahb said: “Adda’ bin Khalid bin Hawdhah said to me: ‘Shall I not read to you a letter that the Messenger of Allah (ﷺ), wrote to me?’ I said: ‘Yes.’ So, he took out a letter. In it was: ‘This is what ‘Adda’ bin Khalid bin Hawdhah bought [from] Muhammad, the Messenger of Allah (ﷺ) He purchased from him a slave’ or a female slave, having no ailments, nor being a runaway, not having any malicious behaviour. Sold by a Muslim to a Muslim. (Sunan Ibn Majah: 2251)
The terms and conditions of an employment contract should be in the written form to avoid any future complications.
أصنافٌ لا يُستَجابُ لَهُم ، مِنهُم مَن أدانَ رَجُلاً دَيناً إلى أجَلٍ فلَم يَكتُبْ علَيهِ كِتاباً ولَم يُشهِدْ علَيهِ شُهُوداً.﴾
The Prophet (ﷺ) said, ‘There are certain types of people whose supplications are not answered. Among them is the man who lends money to someone for a specified time and neither writes it down nor has any witness to it. (Bihar al-Anwar, v. 104, p. 301, no. 1)
 Both parties should follow the contract unless it requires something illegal.
المُسلِمونَ عِندَ شُروطِهِم فيما اُحِلَّ
The Prophet (ﷺ) said, “Muslims [make and] fulfil their promises according to what is permissible”. (Kanz al-Ummal, no. 10909)
“Muslims must keep to the conditions they have made, except for a condition which makes unlawful something which is lawful, or makes lawful something which is unlawful”. (Mishkat al-Masabih: 2923)
وَالْمُسْلِمُونَ عَلَى شُرُوطِهِمْ إِلَّا شَرْطًا حَرَّمَ حَلَالًا أَوْ أَحَلَّ حَرَامًا
The Prophet (ﷺ) said, ‘The one who betrays his trust is not from us. [Bihar al-Anwar, v. 75, p. 172, no. 14]
لَيسَ مِنّا مَن خَانَ بالأمانَةِ.
Imam Ali (RA) said, ‘One of the worst forms of betrayal is being disloyal with things entrusted in one’s possession. [Ghurar al-Hikam, no. 931]
الإمامُ عليٌّ: من أفْحَشِ الخِيانَةِ خِيانَةُ الوَدائعِ.
Fulfilment of contractual terms conditions will be on a mutual basis, i.e. both the parties are bound to fulfil the contractual obligations.
“O Children of Yaqub (Jacob)! Recall My favours, which I bestowed upon you and fulfil the promise (made) to Me; I shall fulfil the promise (made) to you. And always fear Me alone”. (02:40)
يَا بَنِي إِسْرَائِيلَ اذْكُرُوا نِعْمَتِيَ الَّتِي أَنْعَمْتُ عَلَيْكُمْ وَأَوْفُوا بِعَهْدِي أُوفِ بِعَهْدِكُمْ وَإِيَّايَ فَارْهَبُونِ
“And always fulfil the promise of Allah when you promise, and do not break oaths after making them firm, whilst you have already made Allah a surety over you. Surely, Allah knows well whatever you do”. (16:91)
وَأَوْفُوا بِعَهْدِ اللَّهِ إِذَا عَاهَدتُّمْ وَلَا تَنقُضُوا الْأَيْمَانَ بَعْدَ تَوْكِيدِهَا وَقَدْ جَعَلْتُمُ اللَّهَ عَلَيْكُمْ كَفِيلًا ۚ إِنَّ اللَّهَ يَعْلَمُ مَا تَفْعَلُونَ
 A contract is also a pledge. Quran has clarified in an example of how extensive the provisions can be. Details of employment have to be clearly specified.
وَإِذْ أَخَذْنَا مِيثَاقَ بَنِي إِسْرَائِيلَ لَا تَعْبُدُونَ إِلَّا اللَّهَ وَبِالْوَالِدَيْنِ إِحْسَانًا وَذِي الْقُرْبَىٰ وَالْيَتَامَىٰ وَالْمَسَاكِينِ وَقُولُوا لِلنَّاسِ حُسْنًا وَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ ثُمَّ تَوَلَّيْتُمْ إِلَّا قَلِيلًا مِّنكُمْ وَأَنتُم مُّعْرِضُونَوَإِذْ أَخَذْنَا مِيثَاقَكُمْ لَا تَسْفِكُونَ دِمَاءَكُمْ وَلَا تُخْرِجُونَ أَنفُسَكُم مِّن دِيَارِكُمْ ثُمَّ أَقْرَرْتُمْ وَأَنتُمْ تَشْهَدُونَ
“And (remember) when We took a firm promise from the Children of Yaqub (Jacob): ‘Do not worship (anyone) besides Allah, and be kind to the parents and (do good to) the kindred and orphans and the needy. And (also) talk of piety to the common people (politely and pleasantly). And establish Prayer and pay Zakat (the Alms-due).’ Then, all the rest of you, except a few, turned back (from the promise) and you are but averse (to the truth). And when We took from you (this) solemn covenant (as well): ‘You shall not shed one another’s blood (amongst yourselves), nor shall you expel your people (from their homes and townships).’ Then you agreed (to implement it), and you (also) bear witness (to it)”. (2:83-84)
يَا أَيُّهَا النَّبِيُّ إِذَا جَاءَكَ الْمُؤْمِنَاتُ يُبَايِعْنَكَ عَلَىٰ أَن لَّا يُشْرِكْنَ بِاللَّهِ شَيْئًا وَلَا يَسْرِقْنَ وَلَا يَزْنِينَ وَلَا يَقْتُلْنَ أَوْلَادَهُنَّ وَلَا يَأْتِينَ بِبُهْتَانٍ يَفْتَرِينَهُ بَيْنَ أَيْدِيهِنَّ وَأَرْجُلِهِنَّ وَلَا يَعْصِينَكَ فِي مَعْرُوفٍ ۙ فَبَايِعْهُنَّ وَاسْتَغْفِرْ لَهُنَّ اللَّهَ ۖ إِنَّ اللَّهَ غَفُورٌ رَّحِيمٌ
“O Prophet! When the believing women appear in your presence to take the oath of allegiance that they will not set up anything as partner with Allah and will not steal, nor will they commit adultery, or kill their children, or bring false blame which they have invented between their hands and feet (i.e., will not deceive their husbands declaring some other’s baby as their own), or disobey you in (any) matter of law, then accept their allegiance and seek forgiveness for them from Allah. Surely, Allah is Most Forgiving, Ever-Merciful”. (60:12)
Since employment contracts create financial obligations, these must be concluded in written form. The terms and conditions of an employment contract also resemble “debt” so it should be in writing to avoid future complications.
أصنافٌ لا يُستَجابُ لَهُم ، مِنهُم مَن أدانَ رَجُلاً دَيناً إلى أجَلٍ فلَم يَكتُبْ علَيهِ كِتاباً ولَم يُشهِدْ علَيهِ شُهُوداً.
The Prophet (ﷺ) said, ‘There are certain types of people whose supplications are not answered. From among them is the man who lends money to someone for a specified time and neither writes it down nor has anyone witness it.’ [Bihar al-Anwar, v.104, p. 301, no.1]
Fulfilling the contractual terms and covenants was so important that the Prophet (ﷺ) allowed two of the companions not to participate in the Battle of Badr (the first battle where Muslims were already outnumbered) since they had agreed with Quraysh not to fight against them.
Hudbaifa b. al-Yaman said:
“Nothing prevented me from being present at the Battle of Badr except this incident. I came out with my father Husail (to participate in the Battle), but the disbelievers of Quraish caught us. They said: (Do) you intend to go to Muhammad? We said: We do not intend to go to him, but we wish to go (back) to Medina. So they took from us a covenant in the name of God that we would turn back to Medina and would not fight on the side of Muhammad (ﷺ). So, we came to the Messenger of Allah (ﷺ) and related the incident to him. He said: Both of you proceed (to Medina); we will fulfil the covenant made with them and seek God’s help against them”.(Sahih Muslim: 1787)
انْصَرِفَا نَفِي لَهُمْ بِعَهْدِهِمْ وَنَسْتَعِينُ اللَّهَ عَلَيْهِمْ
 The written employment contract duly signed by the employer and worker is a valid document for reference in future service issues. “Produce your book if you are truthful”. (37:157)
فَاْتُوْا بِكِتٰبِكُمْ اِنْ كُنْتُمْ صٰدِقِيْنَ
“Say: ‘Tell me of (the idols) you worship instead of Allah; show me what they have created in the earth, or (bring it forth if) they have a partnership in (the creation of) the heavens. Bring me (as a proof) any Book (revealed) before this (Qur’an), or some remnant of knowledge (transmitted from the ancient people), if you are truthful”. (46:04)
قُلْ أَرَأَيْتُم مَّا تَدْعُونَ مِن دُونِ اللَّهِ أَرُونِي مَاذَا خَلَقُوا مِنَ الْأَرْضِ أَمْ لَهُمْ شِرْكٌ فِي السَّمَاوَاتِ ۖ ائْتُونِي بِكِتَابٍ مِّن قَبْلِ هَٰذَا أَوْ أَثَارَةٍ مِّنْ عِلْمٍ إِن كُنتُمْ صَادِقِينَ
When you sign the contract, you accept all its terms in entirety. “O believers! Enter Islam perfectly and wholly”. ( 02:208)
يَا أَيُّهَا الَّذِينَ آمَنُوا ادْخُلُوا فِي السِّلْمِ كَافَّةً
Invalid terms and conditions in the contract are not allowed. A person should follow the terms of the contract unless declared illegal.
Then Allah’s Messenger (ﷺ) stood up in front of the people, and after glorifying Allah, he said, “Amma Ba’du (i.e., then after)! What about the people who impose conditions which are not in Allah’s Book (Laws)? Any condition that is not in Allah’s Book (Laws) is invalid even if they were one hundred conditions, for Allah’s decisions are the right ones, and His conditions are the strong ones (firmer) (Sahih Bukhari: 2168)
أَمَّا بَعْدُ مَا بَالُ رِجَالٍ يَشْتَرِطُونَ شُرُوطًا لَيْسَتْ فِي كِتَابِ اللَّهِ، مَا كَانَ مِنْ شَرْطٍ لَيْسَ فِي كِتَابِ اللَّهِ فَهُوَ بَاطِلٌ وَإِنْ كَانَ مِائَةَ شَرْطٍ، قَضَاءُ اللَّهِ أَحَقُّ، وَشَرْطُ اللَّهِ أَوْثَقُ
Those who deprive others of their rights and force them to accept inhumane working conditions will face the punishment on the day of judgement.
The Messenger of Allah (ﷺ) said: Beware, if anyone wrongs a contracting man, or diminishes his right, or forces him to work beyond his capacity, or takes from him anything without his consent, I shall plead for him on the Day of Judgment. (Sunan Abi Dawud: 3052)
أَلاَ مَنْ ظَلَمَ مُعَاهِدًا أَوِ انْتَقَصَهُ أَوْ كَلَّفَهُ فَوْقَ طَاقَتِهِ أَوْ أَخَذَ مِنْهُ شَيْئًا بِغَيْرِ طِيبِ نَفْسٍ فَأَنَا حَجِيجُهُ يَوْمَ الْقِيَامَةِ
An employment contract with unfair terms and conditions is invalid and void. “And because of your oaths, do not use (the Name of) Allah as an excuse for refraining from doing good (to the people), becoming Godfearing and making peace amongst people. And Allah is All-Hearing, All-Knowing”. (02:224)
وَلَا تَجْعَلُوا اللَّهَ عُرْضَةً لِّأَيْمَانِكُمْ أَن تَبَرُّوا وَتَتَّقُوا وَتُصْلِحُوا بَيْنَ النَّاسِ ۗ وَاللَّهُ سَمِيعٌ عَلِيمٌ
 Many verses in the Quran (02:173; 06:145; 05:03; 16:51) showcase the rule that prohibited actions leading to misconduct must be specified either explicitly in the contract or by reference to the relevant provisions of the Labour Code or employment regulations of the enterprise. There are certain exceptions as well, which need to be investigated once a disciplinary action is being taken. In the event of extraordinary circumstances coupled with the outcome of independent investigation corroborating as such, the provisions regarding misconduct shall not be applicable. As an example, see the verse below on how the Quran prohibits the unlawful and the details attached to it.
“Forbidden to you are carrion (the animal that dies and is not slaughtered according to Islamic law) and (the discharged) blood and pork and that (animal) on which the name of someone other than Allah has been invoked whilst slaughtering and (the animal) that dies by strangling or by a violent blow (not by any sharp instrument) or by falling from a height or the one that has been gored to death or which has been ripped apart and gnawed by a wild beast, save the one which you slaughter (before it dies), and (that animal too is forbidden) which has been slaughtered on idolatrous altars (dedicated to false gods). And this (is also unlawful) that you learn your fortune through divining (with arrows or divide shares by such means). All these works are sins. This day, the disbelievers have lost all hopes of (their heinous designs because) your Din ([Religion] has prevailed). So, (O believers) fear them not and always fear Me alone. Today I have perfected your Din (Religion) for you, and have completed My Blessing upon you, and have chosen for you Islam (as) Din (a complete code of life). Then if someone gets into a survival situation (and is forced by) ravenous hunger (and intense thirst, i.e., driven by dire necessity, provided) he is not prone to sinning (i.e., eats what is forbidden without being willfully inclined to sin), then Allah is indeed Most Forgiving, Ever-Merciful”. (05:03)
 Workers are responsible for protecting the employer’s property. The Prophet (ﷺ) once said: “Everyone is responsible and each one will be asked about his responsibility. The Imam is also responsible and he will be asked about his subjects. And, every man is responsible for the members of his house, and a woman is responsible for the house of her husband, and a servant is responsible for the property of his master/employer”. (Adab al Mufrad: 214)
كُلُّكُمْ رَاعٍ، وَكُلُّكُمْ مَسْؤُولٌ عَنْ رَعِيَّتِهِ، الإِمَامُ رَاعٍ وَهُوَ مَسْؤُولٌ عَنْ رَعِيَّتِهِ، وَالرَّجُلُ رَاعٍ فِي أَهْلِهِ، وَالْمَرْأَةُ رَاعِيَةٌ فِي بَيْتِ زَوْجِهَا، وَالْخَادِمُ فِي مَالِ سَيِّدِهِ
 “O Children of Yaqub (Jacob)! Recall My favours which I bestowed upon you and fulfil the promise (made) to Me; I shall fulfil the promise (made) to you. And always fear Me alone”. (02:40)
يَا بَنِي إِسْرَائِيلَ اذْكُرُوا نِعْمَتِيَ الَّتِي أَنْعَمْتُ عَلَيْكُمْ وَأَوْفُوا بِعَهْدِي أُوفِ بِعَهْدِكُمْ وَإِيَّايَ فَارْهَبُونِ
 “O believers! Do not betray the trust of Allah and His Messenger (ﷺ) in paying them what is their due, nor betray your mutual trusts, whilst you know (the whole truth)”. (08:27)
يَا أَيُّهَا الَّذِينَ آمَنُوا لَا تَخُونُوا اللَّهَ وَالرَّسُولَ وَتَخُونُوا أَمَانَاتِكُمْ وَأَنْتُمْ تَعْلَمُونَ
 Do not try to use your oaths (affidavit, experience certificate, code of conduct sign-off, to cheat people. Providing fake employment certificates while hiring is prohibited.
وَلَا تَتَّخِذُوا أَيْمَانَكُمْ دَخَلًا بَيْنَكُمْ فَتَزِلَّ قَدَمٌ بَعْدَ ثُبُوتِهَا وَتَذُوقُوا السُّوءَ بِمَا صَدَدتُّمْ عَن سَبِيلِ اللَّهِ ۖ وَلَكُمْ عَذَابٌ عَظِيمٌ
“And do not use your oaths as a means of deceiving amongst you lest your foot should quiver after it is set firmly (in Islam), and you will taste the evil result because you used to hinder (the people) from the path of Allah. And there is severe torment for you”. (16:94)
Use of fake degrees, documents, affidavits during recruitment and promotion are strictly prohibited.
وَلَا تَكُونُوا كَالَّتِي نَقَضَتْ غَزْلَهَا مِن بَعْدِ قُوَّةٍ أَنكَاثًا تَتَّخِذُونَ أَيْمَانَكُمْ دَخَلًا بَيْنَكُمْ أَن تَكُونَ أُمَّةٌ هِيَ أَرْبَىٰ مِنْ أُمَّةٍ ۚ إِنَّمَا يَبْلُوكُمُ اللَّهُ بِهِ ۚ وَلَيُبَيِّنَنَّ لَكُمْ يَوْمَ الْقِيَامَةِ مَا كُنتُمْ فِيهِ تَخْتَلِفُونَ
“And do not be like the woman who, after spinning her yarn firm and strong, breaks it into pieces. You employ your oaths as a means of deceiving amongst you so that (by this) one party may earn more profit than the other. The matter is that Allah (also) puts you to trial through the same, and on the Day of Resurrection He will certainly make clear those matters in which you used to disagree”. (16:92)
Use of false and fraudulent information to get employment is prohibited. “O believers! Why do you say what you do not do? It is most hateful in the sight of Allah that you should say what you do not do”. (61:02-03)
يٰٓاَيُّہَا الَّذِيْنَ اٰمَنُوْا لِمَ تَقُوْلُوْنَ مَا لَا تَفْعَلُوْنَ كَبُرَ مَقْتًا عِنْدَ اللہِ اَنْ تَقُوْلُوْا مَا لَا تَفْعَلُوْنَ
“And do not mix up the truth with falsehood, nor conceal the truth deliberately”. (02:42)
وَلَا تَلْبِسُوا الْحَقَّ بِالْبَاطِلِ وَتَكْتُمُوا الْحَقَّ وَأَنْتُمْ تَعْلَمُونَ
“The Prophet (ﷺ) is quoted as saying: There are three to whom Allah will not speak and at whom He will not look on the Day of Resurrection, and whom He will not declare pure, and they will have a painful punishment. I asked: Who are they, Messenger of Allah, they are losers and disappointed? He repeated it three times. I asked: Who are they. Messenger of Allah, they are losers and disappointed? He replied: The one who wears a trailing robe, the one who takes account of what he gives, and the one who produces a ready sale of a commodity by false swearing”. (Sunan Abi Dawud: 4087(
ثَلاَثَةٌ لاَ يُكَلِّمُهُمُ اللَّهُ وَلاَ يَنْظُرُ إِلَيْهِمْ يَوْمَ الْقِيَامَةِ وَلاَ يُزَكِّيهِمْ وَلَهُمْ عَذَابٌ أَلِيمٌ . قُلْتُ مَنْ هُمْ يَا رَسُولَ اللَّهِ قَدْ خَابُوا وَخَسِرُوا أَعَادَهَا ثَلاَثًا . قُلْتُ مَنْ هُمْ يَا رَسُولَ اللَّهِ خَابُوا وَخَسِرُوا فَقَالَ الْمُسْبِلُ وَالْمَنَّانُ وَالْمُنْفِقُ سِلْعَتَهُ بِالْحَلِفِ الْكَاذِبِ
It is gross misconduct on the part of a worker to claim a skill without expertise. Disciplinary action can be taken against such a person, and a monetary fine can be imposed.
“Anyone who practices medicine when he is not known as a practitioner will be held responsible”. (Sunan Abi Dawud: 4586)
مَنْ تَطَبَّبَ وَلاَ يُعْلَمُ مِنْهُ طِبٌّ فَهُوَ ضَامِنٌ
 The Quran declares wine as haram. Disciplinary action can be taken against a worker who is found drunken during working hours or under the influence of drugs. “O believers! Wine and gambling and idols mounted (for worship) and divining arrows (for seeking luck—all) are filthy works of Satan. So, turn away from them (completely) so that you may prosper”. (05:90)
يَا أَيُّهَا الَّذِينَ آمَنُوا إِنَّمَا الْخَمْرُ وَالْمَيْسِرُ وَالْأَنصَابُ وَالْأَزْلَامُ رِجْسٌ مِّنْ عَمَلِ الشَّيْطَانِ فَاجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ
The Messenger of Allah (ﷺ) said: “Every intoxicant is unlawful”. (Sunan Ibn Majah: Book 30, hadith 3512)
كُلُّ مُسْكِرٍ حَرَامٌ
“Every intoxicant is unlawful, and whatever causes intoxication in large amounts, a small amount of it is (also) unlawful”. (Sunan Ibn Majah: Book 30, hadith 3517)
كُلُّ مُسْكِرٍ حَرَامٌ وَمَا أَسْكَرَ كَثِيرُهُ فَقَلِيلُهُ حَرَامٌ
 “And do not be like the woman who, after spinning her yarn firm and strong, breaks it into pieces. You employ your oaths as a means of deceiving amongst you so that (by this) one party may earn more profit than the other. The matter is that Allah (also) puts you to trial through the same, and on the Day of Resurrection He will certainly make clear those matters in which you used to disagree”. (16:92)
 “And if you apprehend treachery from a people, then throwback to them (their treaty) on terms of equality. Indeed, Allah does not like the treacherous”. (08:58)
وَإِمَّا تَخَافَنَّ مِنْ قَوْمٍ خِيَانَةً فَانْبِذْ إِلَيْهِمْ عَلَى سَوَاءٍ إِنَّ اللَّهَ لَا يُحِبُّ الْخَائِنِينَ
 Fairness in employment tests, interviews, and probation period is specified here.
الإمامُ عليٌّ فيما كَتبَ للأشتَرِ لمَّا وَلاّهُ مِصرَ: ثُمّ انظُرْ في اُمورِ عُمّالِكَ، فاستَعمِلْهُمُ اختِبارا، ولا تُوَلِّهِم مُحاباةً وأثَرَةً؛ فإنَّهُما جِماعٌ مِن شُعَبِ الجَورِ والخِيانَةِ . وتَوَخَّ مِنهُم أهلَ التَّجرِبةِ والحَياءِ مِن أهلِ البُيوتاتِ الصّالِحَةِ، والقَدَمِ في الإسلامِ المُتَقَدِّمَةِ.
Imam Ali (RA), in his letter to Malik al-Ashtar when he appointed him governor of Egypt, said, ‘Thereafter, look into the affairs of your executives. Give them an appointment after tests and do not appoint them according to partiality or favouritism, because these two things constitute the sources of injustice and unfairness. Select from among them those who are people of experience and modesty, hailing from virtuous families, having preceded in [embracing] Islam. [Nahj al-Balagha, Letter 53]
As orphans have to be tested before handing over their property, workers must be tested through the probation period. Quran guides in the following words: “Test well the orphans, until they reach the age of marrying; then, if you perceive in them right judgment, deliver to them their property; consume it not wastefully and hastily ere they are grown. If any man is rich, let him be abstinent; if poor, let him consume in reason. And when you deliver to them their property, take witnesses over them; God suffices for a reckoner”. (04:06)
وَابْتَلُوا الْيَتَامَىٰ حَتَّىٰ إِذَا بَلَغُوا النِّكَاحَ فَإِنْ آنَسْتُم مِّنْهُمْ رُشْدًا فَادْفَعُوا إِلَيْهِمْ أَمْوَالَهُمْ ۖ وَلَا تَأْكُلُوهَا إِسْرَافًا وَبِدَارًا أَن يَكْبَرُوا ۚ وَمَن كَانَ غَنِيًّا فَلْيَسْتَعْفِفْ ۖ وَمَن كَانَ فَقِيرًا فَلْيَأْكُلْ بِالْمَعْرُوفِ ۚ فَإِذَا دَفَعْتُمْ إِلَيْهِمْ أَمْوَالَهُمْ فَأَشْهِدُوا عَلَيْهِمْ ۚ وَكَفَىٰ بِاللَّهِ حَسِيبًا
“Do people think that they will be released (just) on saying: ‘We have believed,’ and they will not be tried? And indeed, We tried (also) those who were before them. Allah will certainly show up (through trial) those who are truthful (in claiming beliefs), and shall make the liars (as well) stand out”. (29:2-3)
اَحَسِبَ النَّاسُ اَنْ يُّتْرَكُوْٓا اَنْ يَّقُوْلُوْٓا اٰمَنَّا وَہُمْ لَا يُفْتَنُوْنَ وَلَقَدْ فَتَنَّا الَّذِيْنَ مِنْ قَبْلِہِمْ فَلَيَعْلَمَنَّ اللہُ الَّذِيْنَ صَدَقُوْا وَلَيَعْلَمَنَّ الْكٰذِبِيْنَ
Workers are made permanent, i.e., their employment contract changed into indefinite term contract, and their services regularised once they have completed the probation period.
وَلَنَبْلُوَنَّكُمْ حَتَّىٰ نَعْلَمَ الْمُجَاهِدِينَ مِنكُمْ وَالصَّابِرِينَ وَنَبْلُوَ أَخْبَارَكُمْ
“And We shall certainly try you till We bring to light those of you who strive hard and fight (firm-footed) and who observe patience and expose your (secret) news (of hypocritical cowardice) as well”. (47:31)
وَإِذِ ابْتَلَىٰ إِبْرَاهِيمَ رَبُّهُ بِكَلِمَاتٍ فَأَتَمَّهُنَّ ۖ قَالَ إِنِّي جَاعِلُكَ لِلنَّاسِ إِمَامًا ۖ قَالَ وَمِن ذُرِّيَّتِي ۖ قَالَ لَا يَنَالُ عَهْدِي الظَّالِمِينَ
“And (call to mind) when the Lord of Ibrahim (Abraham) tested him with several commands which he fulfilled. (On this) Allah said: ‘I am going to make you the leader of mankind.’ He submitted: ‘And from my children as well?’ Allah said: ‘(Yes, but) My promise does not apply to the transgressors”. (02:124)
“O, believers! When the believing women come to you as emigrants, examine them thoroughly. Allah is Well Aware of (the reality of) their faith. Then if you find with certitude that they are true believers, do not send them back to the disbelievers. Neither are they (the believing women) lawful for those disbelievers nor are those disbelievers lawful for these (believing women). And pay them (the disbelievers) back the money which they spent (on them as dower). And there is no sin on you if you marry them whilst you pay these (women) their dower. And, O believers, do not hold back the disbelieving women in (your) wedlock and ask (the disbelievers) for that (money) which you spent (on those women as dower), and they (the disbelievers) may also ask you for that (money) which they spent (on these women as dower). That is the command of Allah. And He judges between you. And Allah is All-Knowing, Most Wise”. (60:10)
يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا جَاءَكُمُ الْمُؤْمِنَاتُ مُهَاجِرَاتٍ فَامْتَحِنُوهُنَّ ۖ اللَّهُ أَعْلَمُ بِإِيمَانِهِنَّ ۖ فَإِنْ عَلِمْتُمُوهُنَّ مُؤْمِنَاتٍ فَلَا تَرْجِعُوهُنَّ إِلَى الْكُفَّارِ ۖ لَا هُنَّ حِلٌّ لَّهُمْ وَلَا هُمْ يَحِلُّونَ لَهُنَّ ۖ وَآتُوهُم مَّا أَنفَقُوا ۚ وَلَا جُنَاحَ عَلَيْكُمْ أَن تَنكِحُوهُنَّ إِذَا آتَيْتُمُوهُنَّ أُجُورَهُنَّ ۚ وَلَا تُمْسِكُوا بِعِصَمِ الْكَوَافِرِ وَاسْأَلُوا مَا أَنفَقْتُمْ وَلْيَسْأَلُوا مَا أَنفَقُوا ۚ ذَٰلِكُمْ حُكْمُ اللَّهِ ۖ يَحْكُمُ بَيْنَكُمْ ۚ وَاللَّهُ عَلِيمٌ حَكِيمٌ
Employment contracts can be terminated during the probation period without serving notice.
مَنِ ابْتَاعَ مُصَرَّاةً فَهُوَ بِالْخِيَارِ ثَلاَثَةَ أَيَّامٍ فَإِنْ رَدَّهَا رَدَّ مَعَهَا صَاعًا مِنْ تَمْرٍ لاَ سَمْرَاءَ
The Prophet (ﷺ) said: “Whoever buys a Musarrah, he has the choice (of annulling the deal) for three days. If he returns it, then he must also give a Sa’ of dates, not Samra” Meaning wheat. (Sunan Ibn Majah: 2238)
Apprentices and probationers can be made permanent workers if they prove their worth during the probation and apprenticeship period.
وَالَّذِينَ جَاهَدُوا فِينَا لَنَهْدِيَنَّهُمْ سُبُلَنَا ۚ وَإِنَّ اللَّهَ لَمَعَ الْمُحْسِنِينَ
“And those who strive hard (and struggle against the lower self vehemently) for Our cause, We certainly guide them to Our ways, and verily Allah blesses the men of spiritual excellence with His companionship”. (29:69)
Testing workers before making them permanent workers is in line with the Islamic teachings.
“Do you think that you will be spared (without passing through troubles and hardships), whilst Allah has not (yet) made distinctly known those amongst you who have fought in the way of Allah and (who) have not taken anyone as a confidant besides Allah and His Messenger (blessings and peace be upon him) and the believers? And Allah is Well Aware of the deeds that you do. (09:16)
أَمْ حَسِبْتُمْ أَن تُتْرَكُوا وَلَمَّا يَعْلَمِ اللَّهُ الَّذِينَ جَاهَدُوا مِنكُمْ وَلَمْ يَتَّخِذُوا مِن دُونِ اللَّهِ وَلَا رَسُولِهِ وَلَا الْمُؤْمِنِينَ وَلِيجَةً ۚ وَاللَّهُ خَبِيرٌ بِمَا تَعْمَلُونَ
 The Quran shares the need to provide for notice period before the termination of any contract.
A verse in Surah Kahf says, “And your Lord is Most Forgiving, Full of Mercy. If He had to take them to task for their doings, He would certainly send the torment upon them quickly. And in truth, the Hour of Promise is (appointed) for them. (When that time comes,) they will not find any place of shelter except with Him”. (18:58)
وَرَبُّكَ الْغَفُورُ ذُو الرَّحْمَةِ ۖ لَوْ يُؤَاخِذُهُم بِمَا كَسَبُوا لَعَجَّلَ لَهُمُ الْعَذَابَ ۚ بَل لَّهُم مَّوْعِدٌ لَّن يَجِدُوا مِن دُونِهِ مَوْئِلًا
The above verse implies that the notice period/warning for ending an employment contract should have a reasonable limit and should be specified to the worker.
The Quran also refers to communicating of the notice period to the worker even if the worker has committed gross misconduct. As is the case in verse, “So, (O polytheists,) you may move about in the land (for) four months. (You will face war after this term.) And bear in mind that you cannot at all weaken Allah, and surely Allah is the Abaser of the disbelievers”. (09:02)
فَسِيحُوا فِي الْأَرْضِ أَرْبَعَةَ أَشْهُرٍ وَاعْلَمُوا أَنَّكُمْ غَيْرُ مُعْجِزِي اللَّهِ ۙ وَأَنَّ اللَّهَ مُخْزِي الْكَافِرِينَ
Similarly, in verses of second Surah (The Cow) which say, “And for those who swear not to go near their wives, there is a (reconsideration) for four months. So, if (during this period) they resume their relations, Allah is Most Forgiving, Ever-Merciful. But if they resolve firmly to divorce, then certainly Allah is All-Hearing, All-Knowing” (02:226-227)
لِّلَّذِينَ يُؤْلُونَ مِن نِّسَائِهِمْ تَرَبُّصُ أَرْبَعَةِ أَشْهُرٍ ۖ فَإِن فَاءُوا فَإِنَّ اللَّهَ غَفُورٌ رَّحِيمٌ وَإِنْ عَزَمُوا الطَّلَاقَ فَإِنَّ اللَّهَ سَمِيعٌ عَلِيمٌ
It can also be implied from the verses that the notice period should be considered as a period for the worker who has shown some misconduct to contemplate and correct their behaviour.
Moreover, verse 65:01 says, “O Prophet (ﷺ) ! (Say to the Muslims:) ‘When you seek to divorce your women, divorce them during their period of purity and count their prescribed period. And keep fearing Allah, Who is your Lord. And do not drive them out of their homes, nor should they leave unless they commit open indecency. And these are Allah’s (fixed) limits. And whoever transgresses Allah’s limits has surely wronged his soul. (O man,) you do not know that Allah may perhaps develop a new situation (to turn you back to her after divorce)”. (65:01)
يَا أَيُّهَا النَّبِيُّ إِذَا طَلَّقْتُمُ النِّسَاءَ فَطَلِّقُوهُنَّ لِعِدَّتِهِنَّ وَأَحْصُوا الْعِدَّةَ ۖ وَاتَّقُوا اللَّهَ رَبَّكُمْ ۖ لَا تُخْرِجُوهُنَّ مِن بُيُوتِهِنَّ وَلَا يَخْرُجْنَ إِلَّا أَن يَأْتِينَ بِفَاحِشَةٍ مُّبَيِّنَةٍ ۚ وَتِلْكَ حُدُودُ اللَّهِ ۚ وَمَن يَتَعَدَّ حُدُودَ اللَّهِ فَقَدْ ظَلَمَ نَفْسَهُ ۚ لَا تَدْرِي لَعَلَّ اللَّهَ يُحْدِثُ بَعْدَ ذَٰلِكَ أَمْرًا
Here, the term Iddah can rightly be applied to the notice period of contract termination. Using this analogy, we assume that a worker is entitled to wages and benefits as usual during the notice period and should not be deprived of his rights as a worker.
Furthermore, the Quranic verse 02:234 says, “And those of you who die and leave (their) widows behind shall keep themselves in waiting for four months and ten days. So, when they arrive at (the end of) their waiting term, there shall be no responsibility on you for whatever they do for themselves according to Islamic law. And Allah is Well Aware of what you do”. (02:234)
وَالَّذِينَ يُتَوَفَّوْنَ مِنكُمْ وَيَذَرُونَ أَزْوَاجًا يَتَرَبَّصْنَ بِأَنفُسِهِنَّ أَرْبَعَةَ أَشْهُرٍ وَعَشْرًا ۖ فَإِذَا بَلَغْنَ أَجَلَهُنَّ فَلَا جُنَاحَ عَلَيْكُمْ فِيمَا فَعَلْنَ فِي أَنفُسِهِنَّ بِالْمَعْرُوفِ ۗ وَاللَّهُ بِمَا تَعْمَلُونَ خَبِيرٌ
This implies that the period of “Iddah (waiting period)” is different in different types of cases. Therefore, the notice period can differ as well in various types of termination, such as in the case of termination of the contract by employer or worker or in cases of misconduct.
Also, the Quran refers to various situations which imply that notice period may differ for the worker. Verse 33:49 says, “O believers! When you marry the believing women and then divorce them before you have touched them (i.e., had sexual intercourse with them), then no waiting period is (obligatory) on them for you which you may start counting. So, give them some provision, and send them off nicely extending kindness to them”. (33:49)
يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا نَكَحْتُمُ الْمُؤْمِنَاتِ ثُمَّ طَلَّقْتُمُوهُنَّ مِن قَبْلِ أَن تَمَسُّوهُنَّ فَمَا لَكُمْ عَلَيْهِنَّ مِنْ عِدَّةٍ تَعْتَدُّونَهَا ۖ فَمَتِّعُوهُنَّ وَسَرِّحُوهُنَّ سَرَاحًا جَمِيلًا
This implies that no notice/non-compete period would be necessary if a person were dismissed before starting employment. However, they must be paid a reduced severance pay.
Besides, the Quranic verse 02:231 says, “And when you divorce the women, and they reach (the completion of) their waiting period, then either retain them (in marital bond) gracefully or release them nicely. But do not retain them to hurt (them) so that you subject (them) to excesses. And he who does so wrongs his soul. And do not make fun of Allah’s commands. And call to mind Allah’s favour that has been (bestowed) upon you, and the Book that He has sent down to you, and (the pearls of) wisdom (with which He has enlightened you). He advises you (through this code of conduct). And fear Allah, and bear in mind that Allah is indeed All-Knowing”.
وَإِذَا طَلَّقْتُمُ النِّسَاءَ فَبَلَغْنَ أَجَلَهُنَّ فَأَمْسِكُوهُنَّ بِمَعْرُوفٍ أَوْ سَرِّحُوهُنَّ بِمَعْرُوفٍ ۚ وَلَا تُمْسِكُوهُنَّ ضِرَارًا لِّتَعْتَدُوا ۚ وَمَن يَفْعَلْ ذَٰلِكَ فَقَدْ ظَلَمَ نَفْسَهُ ۚ وَلَا تَتَّخِذُوا آيَاتِ اللَّهِ هُزُوًا ۚ وَاذْكُرُوا نِعْمَتَ اللَّهِ عَلَيْكُمْ وَمَا أَنزَلَ عَلَيْكُم مِّنَ الْكِتَابِ وَالْحِكْمَةِ يَعِظُكُم بِهِ ۚ وَاتَّقُوا اللَّهَ وَاعْلَمُوا أَنَّ اللَّهَ بِكُلِّ شَيْءٍ عَلِيمٌ
Here it implies that although re-hiring during the notice period is allowed, it should not be adopted as a standard for keeping the worker under duress.
Also, verse 02:232 states, “And when you divorce the women, and they reach (the completion of) their waiting period, then do not prevent them from remarrying (their former or latter) husbands when they have mutually agreed according to the Islamic law. This is a direction for him amongst you who believes in Allah and the Last Day. It is most pure, clean and wholesome for you. And Allah knows, and you do not know (so many things)”. (02:232)
وَإِذَا طَلَّقْتُمُ النِّسَاءَ فَبَلَغْنَ أَجَلَهُنَّ فَلَا تَعْضُلُوهُنَّ أَن يَنكِحْنَ أَزْوَاجَهُنَّ إِذَا تَرَاضَوْا بَيْنَهُم بِالْمَعْرُوفِ ۗ ذَٰلِكَ يُوعَظُ بِهِ مَن كَانَ مِنكُمْ يُؤْمِنُ بِاللَّهِ وَالْيَوْمِ الْآخِرِ ۗ ذَٰلِكُمْ أَزْكَىٰ لَكُمْ وَأَطْهَرُ ۗ وَاللَّهُ يَعْلَمُ وَأَنتُمْ لَا تَعْلَمُونَ
 The Quran refers to the dismissal of workers and the different contract terminations in employment. The Quranic verse 35:16 says, “If He wills, He will destroy you and bring in a new creation”.
اِنْ يَّشَاْ يُذْہِبْكُمْ وَيَاْتِ بِخَلْقٍ جَدِيْدٍ
This implies that the employer has the right to replace non-performing workers.
It is narrated that, “The wife of Thabit bin Qais came to the Prophet (ﷺ) and said, “O Allah’s Messenger ((ﷺ) ! I do not blame Thabit for defects in his character or his religion, but I, being a Muslim, dislike to behave in an un-Islamic manner (if I remain with him)”. On that Allah’s Messenger (ﷺ) said (to her), “Will you give back the garden which your husband has given you (as Mahr or dowry)?” She said, “Yes”. Then the Prophet (ﷺ) said to Thabit, “O Thabit! Accept your garden, and divorce her once”. (Sahih Bukhari: 5273)
The hadith implies that a worker can terminate an employment contract if the employer does not comply with the law. (Khula: termination of the marriage contract by a woman).
hadith 1515/11 (Sahih Muslim, The Book of Transactions), hadith 2238 (Sunan Ibn Majah, The Chapters on Business Transactions) and hadith 4487 (Sunan Nasai, The Book of Financial Transactions) talk about termination of a contract during the probation period. As said in hadith 1515/11, “And do not tie up udders of camels and sheep, and he who buys them after that has been done has two courses open to him: after he has milked them he may keep them if he is pleased with them, or he may return them along with a sit of dates if he is displeased with them”. Also, hadith 2238 indicates that the Prophet (ﷺ) said: “Whoever buys a Musarrah, he has the choice (of annulling the deal) for three days. If he returns it, then he must also give a Sa’ of dates, not Samra”. Meaning wheat”. Similarly, hadith 4487 says, “Do not go out to meet the riders, and do not bind the udders of camels and sheep. Whoever has bought anything in that manner has two choices: If he wishes he may keep it, or if he wants to return it, he may return it, along with a Sa of dates”.
Here, Baiul Khiyar means an option given to the buyer to return the commodity after testing / using (within three days in case of milking goat/camel). Thus, in other words, it is equivalent to “Probation period” with the option to terminate the deal by either side. However, testing a commodity takes less time than testing a worker’s expertise/performance. Hence, the Khiyar/ probation will depend upon the type of job/employment. It can be implied from the provision of giving some food while returning the goat/camel that the worker must be paid some extra wages for termination of contract by employer during probation unless it is on account of gross misconduct. Similarly, in case of resignation without notice, workers can be bound to pay back the last month’s salary. Such resignation may be accepted in place of one month’s salary.
The Quran refers to employment contract termination through various kinds of dismissals as well. Verse 09:12 says, “And if they break their pledges after having made their treaty, and openly revile your religion (in violation of the treaty of peace, by restoring the state of war, through their acts of massacre and violence, and causing a potential threat to state security), then fight the leaders of militancy (to pre-empt their aggression and invasion). Indeed, they have no (commitment to their) pledges. (This pre-emptive action is needed) so that they might stop (from their offensive designs)”.
وَإِن نَّكَثُوا أَيْمَانَهُم مِّن بَعْدِ عَهْدِهِمْ وَطَعَنُوا فِي دِينِكُمْ فَقَاتِلُوا أَئِمَّةَ الْكُفْرِ ۙ إِنَّهُمْ لَا أَيْمَانَ لَهُمْ لَعَلَّهُمْ يَنتَهُونَ
This can imply the dismissal of a worker because of their severe breach of rules/contract or their disclosure of business secrets. Moreover, verse 65:01 (in footnote 38) says, “O Prophet (ﷺ) ! (Say to the Muslims:) ‘When you seek to divorce your women, divorce them during their period of purity and count their prescribed period. And keep fearing Allah, Who is your Lord. And do not drive them out of their homes, nor should they leave unless they commit open indecency. And these are Allah’s (fixed) limits. And whoever transgresses Allah’s limits has surely wronged his own soul. (O man,) you do not know that Allah may perhaps develop a new situation (to turn you back to her after divorce)”.
This verse implies that dismissal can occur in case of a worker’s gross misconduct or severe breach of contract, resulting in loss of severance pay. However, in case of unfair dismissal on the appeal of the worker, severance pay may be granted. Furthermore, in case of discharge of a worker for a severe breach of contract, the punishment may be doubled if a worker was at a position of greater responsibility, as implied from the Quranic verse (33:30), “O wives of the (Esteemed) Prophet (ﷺ)! Whoever of you commits an obvious indecency, the torment for her will be doubled, and that is very easy for Allah”.
يَا نِسَاءَ النَّبِيِّ مَن يَأْتِ مِنكُنَّ بِفَاحِشَةٍ مُّبَيِّنَةٍ يُضَاعَفْ لَهَا الْعَذَابُ ضِعْفَيْنِ ۚ وَكَانَ ذَٰلِكَ عَلَى اللَّهِ يَسِيرًا
In addition, in verse 09:94, “(O Muslims!) When you return to them (from the expedition of Tabuk), they will offer their apologies to you. (O Beloved!) Say: ‘Do not make excuses; we will not believe you at all. Allah has informed us about your state of affairs. Now (in the future) Allah, as well as His Messenger, will see your performance (in the world). Then (in the Hereafter too) you will be returned to (the Lord) Who knows everything hidden and manifest, and He will make you know (all your works) that you used to do”.
يَعْتَذِرُونَ إِلَيْكُمْ إِذَا رَجَعْتُمْ إِلَيْهِمْ ۚ قُل لَّا تَعْتَذِرُوا لَن نُّؤْمِنَ لَكُمْ قَدْ نَبَّأَنَا اللَّهُ مِنْ أَخْبَارِكُمْ ۚ وَسَيَرَى اللَّهُ عَمَلَكُمْ وَرَسُولُهُ ثُمَّ تُرَدُّونَ إِلَىٰ عَالِمِ الْغَيْبِ وَالشَّهَادَةِ فَيُنَبِّئُكُم بِمَا كُنتُمْ تَعْمَلُونَ
The verse shows that any contract termination should be based on a worker’s performance, and every aspect of the performance should be taken into consideration before any such decision is taken.
Also, verse 66:07 states”, O disbelievers! Do not make any excuse Today. You will only be paid the reward of what you have been doing”.
يَا أَيُّهَا الَّذِينَ كَفَرُوا لَا تَعْتَذِرُوا الْيَوْمَ ۖ إِنَّمَا تُجْزَوْنَ مَا كُنتُمْ تَعْمَلُونَ
This can be referred to as the dismissal of a worker based on their performance and whose excuse will not be accepted after warning. It is recompense for what the worker did.
Furthermore, it is narrated in Bukhari, Book of Sales & Trade, hadith No. 2234, “I heard the Prophet (ﷺ) saying, “If a slave-girl of yours commits illegal sexual intercourse and her illegal sexual intercourse is proved, she should be lashed, and after that nobody should blame her, and if she commits illegal sexual intercourse the second time, she should be lashed, and nobody should blame her after that, and if she does the offence for the third time and her illegal sexual intercourse is proved, she should be sold even for a hair rope”. (Sahih Bukhari:2234). It is further narrated that, the Prophet (ﷺ) said: “When a slave steals, sell him, even though it be for half an uqiyah”. (Sunan Abi Dawud: 4412)
From both these ahadith, it can be implied that if a person/worker keeps repeating a misconduct, his contract can be terminated without any notice and irrespective of how good of a worker he is. Such worker may be given written warning a couple of times at most and should be dismissed if he keeps repeating such misconduct. In the event of gross misconduct, the employment contract can be terminated without payment of severance pay. Quran refers to a similar case in the following words: “And if they pray to be allowed to make amends, they will not be allowed to do so”. (41:24)
وَإِنْ يَسْتَعْتِبُوا فَمَا هُمْ مِنَ الْمُعْتَبِينَ
The Quranic verse 04:34 refers to gradual disciplinary proceedings up to the stage of dismissal. If a worker reforms their habits, then they should not be disturbed based on the past service record. The verse states that “Men are the protectors and maintainers of women, because of the bounties Allah has given to some more than others, and because they spend out of their wealth (to support the women), so righteous women are sincere and pious, being guards in the absence (of their husbands) of what Allah has (enjoined to be) guarded. As for those (wives) you fear rebellious conduct on their part, (first) advise them, and (if ineffective) leave them alone in their beds, and (as a last resort) turn away from them, striking a temporary separation. Then if they cooperate with you, do not seek any course (of action) against them. Indeed, Allah is All-Exalted, All-Great”. (04:34)
Moreover, the verse 04:15 says, “And those of your women who commit adultery, call in from your men four witnesses against them. Then if they produce evidence, confine those women to their houses till death completes their term of life, or Allah ordains a way (i.e., a new injunction) for them”. This implies that it is not necessary to dismiss a worker on their poor performance or misconduct. Disciplinary action may be taken against them, or they may be suspended. (The directions in the quoted verse were superseded by another verse; however, the concept in this verse may still be used in terms of the general contracts)
While verse 75:13-15 implies the need for a dismissal procedure where a worker is told about their actions that led to this termination. The reasons for contract termination should be enunciated in the termination notice. As the verse states, “That Day, man will be informed of those (deeds) which he sent forward and those (repercussions) which he left behind (after his death). In truth, man will (himself) be aware of (the affairs of) his self, even though he will offer all his excuses”. (75:13-15)
يُنَبَّؤُا الْاِنْسَانُ يَوْمَىِٕذٍؚبِمَا قَدَّمَ وَاَخَّرَ بَلِ الْاِنْسَانُ عَلٰي نَفْسِہٖ بَصِيْرَۃٌ وَّلَوْ اَلْقٰى مَعَاذِيْرَہٗ
The Quran also gives a worker the right to terminate an employment contract. In verse 08:58, Allah says, “And if you apprehend treachery from a people, then throwback to them (their treaty) on terms of equality. Indeed, Allah does not like the treacherous”. (08:58)
وَإِمَّا تَخَافَنَّ مِن قَوْمٍ خِيَانَةً فَانبِذْ إِلَيْهِمْ عَلَىٰ سَوَاءٍ ۚ إِنَّ اللَّهَ لَا يُحِبُّ الْخَائِنِينَ
This verse was revealed in connection with the continuous Jewish breach of contract with Muslims; whereby the Muslims were directed to do the same with notice in advance. The same was done, and the Jews were made to leave Madina. It implies that if the employer is not fulfilling the contractual responsibilities or making workplace environment unbearable for worker leading to constructive dismissal, or deprives the worker of some entitled benefits without any justification, the worker may resign/terminate his contract with advance notice.
It is narrated that the Messenger of Allah (ﷺ) said: “There is no divorce and no manumission at the time of coercion”. (Sunan Ibn Majah: Vol. 3, Book 10, hadith 2046)
لاَ طَلاَقَ وَلاَ عَتَاقَ فِي إِغْلاَقٍ
This implies that forced resignation or renunciation of an employment contract is invalid. Similarly, forced labour is also prohibited.
As stated in Sunan Abu Daud, Book of General Behavior (Kitab Al-Adab); hadith No. 5161 which says, “The Prophet (ﷺ) said: Feed those of your slaves who please you from what you eat and clothe them with what you clothe yourselves, but sell those who do not please you and do not punish Allah’s creatures”. (Sunan Abi Dawud: 5161)
مَنْ لاَءَمَكُمْ مِنْ مَمْلُوكِيكُمْ فَأَطْعِمُوهُ مِمَّا تَأْكُلُونَ وَاكْسُوهُ مِمَّا تَكْتَسُونَ وَمَنْ لَمْ يُلاَئِمْكُمْ مِنْهُمْ فَبِيعُوهُ وَلاَ تُعَذِّبُوا خَلْقَ اللَّهِ
If a worker’s performance is not satisfactory, it is allowed to terminate such an employment contract instead of tormenting the individual, psychologically and physically.
 Islam calls for the rights of everyone, including workers, to be fulfilled. It is narrated that “A group of three men came to the houses of the wives of the Prophet (ﷺ) asking how the Prophet (ﷺ) worshipped (Allah), and when they were informed about that, they considered their worship insufficient and said, “Where are we from the Prophet (ﷺ) as his past and future sins have been forgiven”. Then one of them said, “I will offer the prayer throughout the night forever”. The other said, “I will fast throughout the year and will not break my fast”. The third said, “I will keep away from the women and will not marry forever”. Allah’s Messenger (ﷺ) came to them and said, “Are you the same people who said, so-and-so? By Allah, I am more submissive to Allah and more afraid of Him than you; yet I fast and break my fast, I do sleep, and I also marry women. So, he who does not follow my tradition in religion is not from me (not one of my followers)”. (Sahih Bukhari: 5063)
أَنْتُمُ الَّذِينَ قُلْتُمْ كَذَا وَكَذَا أَمَا وَاللَّهِ إِنِّي لأَخْشَاكُمْ لِلَّهِ وَأَتْقَاكُمْ لَهُ، لَكِنِّي أَصُومُ وَأُفْطِرُ، وَأُصَلِّي وَأَرْقُدُ وَأَتَزَوَّجُ النِّسَاءَ، فَمَنْ رَغِبَ عَنْ سُنَّتِي فَلَيْسَ مِنِّي
Also, verse 65:06 says, “Keep the (divorced) women where you live according to your means. And do not harm them to make (the place of living) intolerable for them. And if they are pregnant, keep spending on them till they give birth to the child. Then if they suckle (the child) for your sake, pay them their recompense. And consult each other (as usual) for good. But if you experience difficulty mutually, (then some) another woman may suckle the child”. (65:06)
أَسْكِنُوهُنَّ مِنْ حَيْثُ سَكَنتُم مِّن وُجْدِكُمْ وَلَا تُضَارُّوهُنَّ لِتُضَيِّقُوا عَلَيْهِنَّ ۚ وَإِن كُنَّ أُولَاتِ حَمْلٍ فَأَنفِقُوا عَلَيْهِنَّ حَتَّىٰ يَضَعْنَ حَمْلَهُنَّ ۚ فَإِنْ أَرْضَعْنَ لَكُمْ فَآتُوهُنَّ أُجُورَهُنَّ ۖ وَأْتَمِرُوا بَيْنَكُم بِمَعْرُوفٍ ۖ وَإِن تَعَاسَرْتُمْ فَسَتُرْضِعُ لَهُ أُخْرَىٰ
This verse suggests that employers and workers must also be open to negotiating severance pay in employment contracts.
Moreover, Islam allows for different severance pays, which do not reduce worker’s rights guaranteed in the law. It is narrated that “A woman from Banu Fazarah was married for (the dowry of) two sandals. So the Messenger of Allah said to her: ‘Do you approve of (exchanging) yourself and your wealth for two sandals?’ She said: ‘Yes”. He said: “So he permitted it”. (Mishkat al-Masabih: 3206)
أَرَضِيتِ مِنْ نَفْسِكِ وَمَالِكِ بِنَعْلَيْنِ؟
In another instance, it is narrated that “Abu Talhah married Umm Sulaim and the dowry between them was Islam. Umm Sulaim became Muslim before Abu Talhah, and he proposed to her, but she said: ‘I have become Muslim; if you become Muslim, I will marry you.’ So, he became Muslim, and that was the dowry between them”. (Sunan an-Nasa’i: 3340). Severance pay can be in-kind as well.
Besides, various verses in Surah Baqarah, 02:231, 02:233 and 02:234 imply the same concept. During the non-compete period, workers must be paid the wages/other benefits, for the duration of the period (even if it is for a long time). If the worker was laid off for economic reasons, the employer has to pay wages for a long time. Verse 02:231 states, “And when you divorce the women, and they reach (the completion of) their waiting period, then either retain them (in marital bond) gracefully or release them nicely. But do not retain them to hurt (them) so that you subject (them) to excesses. And he who does so wrongs his own soul. And do not make fun of Allah’s commands. And call to mind Allah’s favour that has been (bestowed) upon you, and the Book that He has sent down to you, and (the pearls of) wisdom (with which He has enlightened you). He advises you (through this code of conduct). And fear Allah, and bear in mind that Allah is indeed All-Knowing”. (02:231)
Similarly, verse 02:233 states, “And the mothers shall suckle their infants for two full years. This (injunction) is for him who wants to complete the suckling period. And, according to usage, the food and clothing of the feeding mothers is the obligation of the father of the child. No soul should be stressed beyond its capacity, (and) neither the mother nor the father should be harmed for the child. The same injunction applies to the heirs. Then if both the mother and the father desire with mutual consultation and consent to wean (even before the fixed two years), there will be no sin on them. Nor shall it be a sin if you intend to engage (wet nurses) for suckling the children, whilst you pay them whatever you do according to usage. And fear Allah and know that Allah is Watchful of all that you do”. (02:233)
In the same way, verse 02:234 says, “And those of you who die and leave (their) widows behind shall keep themselves in waiting for four months and ten days. So, when they arrive at (the end of) their waiting term, there shall be no responsibility on you for whatever they do for themselves according to Islamic law. And Allah is Well Aware of what you do”. (02:234)
Furthermore, the Quranic verse 02:236 says, “There will (also) be no sin on you if you divorce (the wedlocked) women even before touching them or fixing their dower. Then (in this case) provide for them appropriately. It is (an obligation) for the rich according to his means and for the poor according to his means. (In any case) this provision must be made in a becoming manner. This is compulsory for the pious”. (02:236)
لَّا جُنَاحَ عَلَيْكُمْ إِن طَلَّقْتُمُ النِّسَاءَ مَا لَمْ تَمَسُّوهُنَّ أَوْ تَفْرِضُوا لَهُنَّ فَرِيضَةً ۚ وَمَتِّعُوهُنَّ عَلَى الْمُوسِعِ قَدَرُهُ وَعَلَى الْمُقْتِرِ قَدَرُهُ مَتَاعًا بِالْمَعْرُوفِ ۖ حَقًّا عَلَى الْمُحْسِنِينَ
This refers to the situation where a person signs a contract but could not join the employment since the employer terminated the contract due to some domestic reasons/financial conditions, the employer should pay a reasonable amount to the person. Similarly, the verse 02:237 “And if you divorce them before you have touched them after you have fixed a dower for them, then paying half of the dower you have fixed is necessary unless they forgo (their right) themselves, or (the husband) in whose hand is the marriage tie forgoes (i.e., pays more than half or full). And, (O male folk,) if you forgo, that is closer to God Wariness. And never forget extending generosity (and behaving excellently) towards each other (even in these moments of stress and strain). Verily, Allah observes well what you do”. In this case, it can be implied that half of the notice period pay should be given.
The Quran also refers to cases when severance pay need not be paid to workers.
The Quranic verse 65:01 (as in footnotes above) says, “O Prophet (ﷺ)! (Say to the Muslims:) ‘When you seek to divorce your women, divorce them during their period of purity and count their prescribed period. And keep fearing Allah, Who is your Lord. And do not drive them out of their homes, nor should they leave unless they commit open indecency…” This suggests that no severance pay will be granted on the dismissal of a worker in case of a severe breach of contract.
Similarly, verse 09:84 says, “And never perform (funeral) Prayer over any of these (hypocrites) who dies, nor stand at his grave (because your stepping on some place also brings about mercy and blessings, and they do not deserve your mercy and blessing). Indeed, they disbelieved in Allah and His Messenger (blessings and peace be upon him) and died in a state of defiance”. This implies that no severance pay may be granted in case of worker dismissal on account of disciplinary proceedings due to severe breach of contract/disclosure of business secrets etc. Moreover, the Prophet (ﷺ) said, “A man may do the deeds of the people of the Fire while in fact, he is one of the people of Paradise, and he may do the deeds of the people of Paradise while in fact, he belongs to the people of Fire, and verily, (the rewards of) the deeds are decided by the last actions (deeds)”. (Sahih Bukhari: 6607)
إِنَّ الْعَبْدَ لَيَعْمَلُ عَمَلَ أَهْلِ النَّارِ، وَإِنَّهُ مِنْ أَهْلِ الْجَنَّةِ، وَيَعْمَلُ عَمَلَ أَهْلِ الْجَنَّةِ، وَإِنَّهُ مِنْ أَهْلِ النَّارِ، وَإِنَّمَا الأَعْمَالُ بِالْخَوَاتِيمِ
This hadith implies that in case of disciplinary action, a worker, even with a long service period, can be punished for grave mistakes/gross misconduct and not awarded any severance pay.
 Social security benefits on termination of an employment contract are also referred to in Islam. The Quranic verse 02:241 states, “And the divorced women must also be provided with maintenance according to what is fair. This is compulsory for the pious”. (02:241)
وَلِلْمُطَلَّقَاتِ مَتَاعٌ بِالْمَعْرُوفِ ۖ حَقًّا عَلَى الْمُتَّقِينَ
This verse can suggest that compensation should be given for forcefully retired workers or dismissed workers for a limited time. Some payments (like medical) may be continued even after the dismissal of a worker.
The verse 17:34 says, “And (also) do not go near the orphan’s property, but in a beneficial way (to the orphan), until he reaches his maturity. And always fulfil the promise. No doubt, the promise will be questioned about” (17:34). Here, it implies that the state and the employer should devise such a mechanism to protect the gratuity/severance pay of the worker in case of in-service death until the children reach the age of majority/adulthood.
Similarly, verse 04:05 says, “And do not entrust to the mentally deficient your (or their) assets which Allah has made a means of stability for your economy. However, feed them out of it and clothe them, and say to them good and nice words” (04:05). This also implies that the state should protect pension and gratuity until the adulthood of the orphans in case of in-service death of workers.
Survivor benefits for in-service death (termination of contract) of a worker are also suggested in Islam. However, survivors’ benefits are available to the orphans until they reach the age of majority (maturity), i.e., 18 years.
“Ali (RA) reported the Prophet (ﷺ) as saying, “There is no orphanhood after the age of puberty”. (Sunan Abi Dawud: 2873)
لاَ يُتْمَ بَعْدَ احْتِلاَمٍ