In today’s business environment, contract regulations are no longer merely rigid legal texts; they have become a strategic tool for risk management and for ensuring the sustainability of projects. Yet, some public-sector companies in Libya still rely on contracting models managed through a legacy approach that has not been sufficiently reviewed to keep pace with evolving contracting practices. This directly affects contractual balance: it disrupts the distribution of duties and rights between parties, undermines contractual fairness, and blurs clear standards for allocating responsibilities. As a result, the gap in risks and disputes widens—negatively impacting execution quality, project stability, and the likelihood of success—especially with respect to workers’ rights and contractual fairness for contractors.
Contractual Defect: Authority Without Standards
For example, I came across a clause commonly used in some public-company contracts that grants the Owner “the freedom at any time” to demand the removal of any worker employed by the Contractor “without delay and at the Contractor’s expense,” merely because the Owner deems the worker inadequate, negligent, or in violation of laws or customs.
“The Owner shall have the freedom at any time to request in writing that the Contractor remove any person employed by the Contractor in executing the Works, if the Owner considers that person inadequate, negligent, careless, or in violation of the laws or customs in the State of Libya, and the Contractor shall replace such person without delay and at its own expense.”
This clause constitutes a fundamental governance gap. It grants near-absolute discretionary power without measurable standards or clear procedures, effectively opening the door to unfair removal or unreasoned decisions. It also transforms the contract from an instrument of delivery into an economic pressure tool, placing the Contractor in a fragile position between its legal obligations toward its workforce on one side and the Owner’s unilateral pressure on the other.
From the Contractor’s perspective, obliging immediate replacement “without delay” and “at the Contractor’s expense” means that a unilateral Owner decision generates a direct financial burden on the Contractor, increases the likelihood of disputes and claims, and undermines stability within the project.
Why This Wording Is Governance-Risky
Terms such as “inadequate / negligent / careless” are broad and loosely defined. They lack an objective, verifiable standard and are not anchored to measurable Key Performance Indicators (KPIs). When combined with “as the Owner sees fit” and “at any time,” requirements of justification, documentation, and procedural safeguards are effectively removed (investigation, hearing the worker’s statements, and the right to grievance/appeal).
Further, expanding the grounds for removal to include “violation of laws or customs”—without defining a work-related professional scope—creates an unjustifiably elastic basis for application. Finally, the condition “without delay and at the Contractor’s expense” shifts the financial impact directly to the Contractor, turning the clause into an economic pressure mechanism that raises dispute probability and affects execution stability.
On the Other Hand: Safety Is Not a Justification for Absolute Power
It is important to emphasize that criticizing vague clauses does not mean tolerating safety violations. High-risk environments such as the oil and gas sector require strict compliance, and any breach of Health, Safety and Environment (HSE) procedures can endanger lives and expose the project to shutdowns and major losses.
However, managing violations must follow a disciplined and fair professional path that begins with documentation, investigation, and hearing the worker’s statements, then applying a graduated approach: verbal/written warning, retraining and reassessment, final warning, and then—where there is a serious breach or repetition—immediate removal from the worksite for safety reasons, while preserving grievance safeguards.
Economic Impact and Project Risk Management
From a PMBOK perspective, the impact of such clauses does not stop at the level of the worker or the Contractor. It directly affects the Value Delivery System and quickly shows up in the classic project triangle of cost–time–quality:
Higher Cost of Poor Quality (COPQ): Losing accumulated experience due to poorly considered removals increases Rework and reduces execution quality.
Disruption of the Critical Path: The “immediate replacement” requirement ignores the time needed for recruitment and training, leading to schedule slippage.
Inflated Risk Premium: Contractors raise bid prices to cover the risks created by unbalanced clauses—ultimately increasing the total cost borne by public funds.
In other words, when the project workplace is governed by “rapid exclusion” without standards or safeguards, the cost does not fall on one individual. It translates into project indicators: higher turnover, loss of experience, increased stoppages, inflated claims and compensation, and reduced execution quality.
National Legal Framework and International Standards
Libya’s Labour Relations Law No. 12 of 2010 regulates the grounds for termination of employment relationships and requires that termination be for specific and legitimate reasons, with safeguards such as notice, investigation, and the right to grievance—thereby limiting arbitrary termination except under clear controls.
At the international level, ILO Convention No. 158 (1982) and Recommendation No. 166 (1982) confirm that termination must be for a valid reason related to the worker’s capacity or conduct, or to operational requirements, and must follow fair procedures enabling the worker to defend themselves. Even if a state has not ratified all such instruments, they remain an important reference for the principles of Decent Work and protection against arbitrary dismissal.
Toward a Roadmap for Reform
Seeking deeper understanding of how corporate systems can align with international standards, I enrolled this year in the online course:
Human Rights Due Diligence for Decent Work – MOOC (2025 Edition)
organized by the International Training Centre of the ILO (ITCILO). The course focuses on linking international labour standards to daily enterprise operations—especially working conditions and safety.
Human Rights Due Diligence (HRDD) is not a luxury; it is at the core of sound governance. Based on this experience, I invite public companies to adopt practical, implementable steps:
Review regulations and contract templates: Replace vague clauses with disciplined wording that defines objective grounds and requires reasoned decisions.
Adopt graduated procedures: Start with documentation, investigation, and performance/safety assessment, ending with justified removal when necessary.
Balance enforcement and fairness: Link removal decisions to documented HSE criteria and technical performance, while ensuring a right to grievance.
Establish a multi-disciplinary review team: Including legal counsel, HR, occupational health and safety, workers/union representatives, contractors’ representatives, and chambers of commerce and industry; and engage independent experts—when needed, drawing on specialized international expertise such as the International Labour Organization (ILO)—to review “high-impact” clauses (dismissal, sanctions, complaints, etc.).
Embed Due Diligence into regulations: Assess impacts, amend non-compliant clauses, track responses, and communicate actions taken, in line with the UN Guiding Principles on Business and Human Rights (UNGPs).
Institutionalize contractual risk management: Because an unbalanced clause is not merely a legal problem—it creates project cost and reputational risk.
Balanced contract governance is the safeguard for protecting public funds, ensuring execution quality, reducing incidents, and strengthening the reputation of national institutions in a global market that recognizes only professional standards. A sound contract is not designed for punishment or exclusion; it is designed to ensure project success at the highest levels of safety, quality, and fairness.
Yours sincerely,
Dr. Nabil Mansour AL Tarbaghia