System of industrial relations in an Islamic framework 1

This chapter explains the contract among management and workers. It focuses on the environment of cooperation. The chapter discusses the phenomenon of division of labor. It then compares the new psychological and sociological models with the Islamic Economic model. It is worth noting that the nature of the contract among management and workers and among workers themselves is the real base of the system of industrial relations. The format of contracts under the umbrella of Shari’ah has its unique position. Iqbal and Mirakhor analyze corporate sector governance and contracts’ nature in the Islamic jurisprudence. According to Islamic jurisprudence, if the foundation and source of a contract do not have justice and fairness, the contract should be declared null and void. Islamic moral economy has two important ingredients, participation and cooperation. Division of labor increases employment opportunities, supports the technological advancement, increases the living standard worldwide, transforms knowledge, and boosts different communities’ welfare.