Shariah-Compliant Governance Framework for HR Practices in Karachi’s IT Sector

Abstract

This research investigates the congruence between the fast-developing IT sector of Karachi, Human Resource (HR) practices, and the principles of Islamic law and ethics, and based on this elaborates a HR governance framework of a Shariah compliance. The research employs qualitative multiple-case studies, which will span the years 2024 to 2025, and analyses the key employment-related documents, which were voluntarily provided to the researcher by the software companies of varying sizes. These documents include appointment letters, employment contracts, HR policy manuals, and performance and disciplinary management records. To see if these documents fulfil the basic conditions of Shariah law on employment relations, the research employs both content and thematic analyses. The study focuses on informed mutual consent, transparency and lack of (gharar) ambiguity in job duties, salary, hours of work, and grounds for termination. The study also focuses on the absence of, and protection from, exploitation, inadequacy of pay and delays in payment of wages, and absence of, and the absence of, unreasonable discretionary power to employment relations. Despite many organizations showing basic compliance and gathering all necessary paperwork, copious amounts of gaps still remain in Shariah-focused HR governance. Most of these gaps relate to vague/unaddressed overtime policies, vague job descriptions, and unethical hiring practices such as dummy interviews, aggressive headhunting, and referrals without merit. Furthermore, employee welfare policies, especially those targeting stress and burnout in IT environments, are often absent or inadequate. HR managers generally do not consider HR functions to be an amānah, or moral responsibility. They main relinquish the ideals of integrity, fairness, and compassion, and simply treat them as niceties or optional practices. In light of these findings, the study presents a pragmatic and innovative HR governance plan that focuses on clear job descriptions, open and fair termination policies, merit-based hiring, and regular Shariah compliance assessments. This research focuses on the Karachi software industry, which provides a local empirical gap and helps address the local and global HR gap of Islamic justice, accountability, and dignity principles. This alignment can minimize workplace conflicts, enhance trust and employee retention, and defend the organizational moral income.