Managing Expatriate Employment Contracts with Blockchain

Abstract

Expatriates, or migrant workers, are employees who work outside their home country and reside in a foreign country for the purpose of work. They are often subject to job fraud, employment contract violations, and poor working conditions. These calamities are mainly due to language barriers, limited legal protection, and feeling inferior in their host countries. Many reports have indicated that minimum working and living standards for expatriates are not as adequately enforced as those for domestic employees. These issues may be elevated with the presence of an employment contract framework, which would enable better enforcement and wider visibility for both workers and employers. Thus, we propose a blockchain-powered framework to represent expatriate employment contracts as digital assets managed by smart contracts. It enables employers to create contracts to which employees agree in a decentralized, tamper-proof, transparent, and traceable manner. This framework facilitates auditability, tracking, and enhanced visibility of expatriate employment contracts and job history verification for both workers and employers. We provide a prototype implementation using the Hyperledger Fabric platform and analyze the framework qualitatively from scalability, efficiency, security, and privacy perspectives.

1. Introduction

An expatriate employment contract is a legally enforceable agreement between an employer in one country and a worker who is not a citizen or a permanent resident of that country. Most expatriates do not intend to settle permanently in the country where they are employed. However, some workers extend their stay in the host country and become migrant workers. Expatriate employment contracts spell out each party’s roles and responsibilities and their respective obligations regarding pay and perks. In 2019, individuals leaving their home nations temporarily or permanently for employment accounted for approximately 69 percent of the world’s international migrant population aged 15 and over [1].

The increase in cross-border employment has largely benefited the global economy. On the one hand, seeking to work abroad is often driven by the need to improve the social conditions of individuals and their families and the limitation of the local demand for labor [2]. On the other hand, employers often seek to hire workers from other countries to fulfill the demand for skilled workers, often at a lower cost than their local counterparts [3]. Furthermore, crossing borders to engage in a working relationship may indirectly benefit the sending and receiving countries by balancing job shortages in the sending countries and fulfilling working demands in the receiving countries.

Despite the many benefits to all mentioned parties, expatriates may go through poor experiences with their employers. Many reports have indicated that expatriate workers’ minimum working and living standards are not as adequately enforced as they are for domestic employees [4,5,6]. Additionally, expatriate workers have long been victims of job fraud and verbal or physical abuse from their employers. They are often assigned more dangerous jobs than their local counterparts (see [2] for a survey). On the other hand, the recruitment process of expatriate workers is often costlier to the employers and associated with many uncertainties related to verification of previous work experience and qualifications [7,8]. These issues may be elevated with the presence of a contract framework that enables better enforcement and wider viability of both workers’ and employers’ history.

Researchers have proposed various contracting solutions to address the issues associated with hiring and managing freelancing and part-time contracts. Many of the proposed solutions have leveraged blockchain technology to automate and document the processes associated with contracting relationships [9,10,11]. However, the existing attempts are mainly focused on freelancing and part-time contracts. To the best of our knowledge, this is the first proposal to address issues associated with full-time expatriate employment contracts—a type of contract that is very distinct in nature and experience for both employees and employers. Our goal in this paper is to leverage blockchain technology to provide a framework for managing and overseeing these contracts.

Therefore, we propose a blockchain-powered framework to represent expatriate employment contracts as digital assets and manage them with smart contracts. Our proposed framework allows employers to create contracts and employees to agree to them in a decentralized, tamper-proof, transparent, and traceable manner. Our solution allows employers to view and verify the worker’s employment history. On the other hand, employees can also view the employer’s hiring and dispute history. These features help both parties support their employment decision and minimize the risk and cost of employment contract fraud and violations.

The main contributions of this paper are summarized as follows:

• A blockchain-powered framework for managing expatriate employment contracts;
• A design for 12 smart contract transactions allowing for issuing disputes and job history verification;
• A publicly available proof-of-concept implementation of our framework using permissioned blockchain;
• A detailed qualitative analysis of seven properties associated with the framework design to demonstrate its efficiency, scalability, security, and privacy.

The rest of this paper is organized as follows: Section 2 reviews the related work. In Section 3, we provide a thorough background. In Section 4, we explain the features of the proposed framework and detail its design aspects. Section 5 provides a qualitative analysis of the properties of our proposed framework. Section 6 details the implementation choices for a prototype of the proposed framework. We discuss some of the limitations and challenges to the practical application of our framework in Section 7. Section 8 concludes the paper.

2. Related Work

The impact of blockchain is evident in the digital currencies space after the invention of Bitcoin more than a decade ago [12]. Recently, there has been considerable work focused on different domains and use cases other than digital currencies, financial applications such as health care [13], supply chain management [14,15], elections [16], Privacy-Preserving such as federated learning [17], secure blockchain-based domain name systems [18], and human resources management [19,20,21]. The main properties of blockchain, such as immutability, transparency, and decentralization, make it the right choice to solve a wide variety of real-world problems in certain contexts.

In human resource management, hiring workers among different candidates is a tedious and difficult task. In addition, ensuring the workers’ rights is even more critical and significant. There have been many attempts to address the problem of hiring workers by utilizing blockchain technology to verify the education, skills, and employment of the workers [9,10,11] and to create and sign electronic work contracts that are certified, unforgeable, and stored encrypted over cloud servers [22]. Moreover, ref. [23] proposes a blockchain-based solution to automate the process of temporary employment contracts while ensuring respect for the rights of all parties involved. Hiring expatriate employees makes the task even more complicated because it involves different unrelated parties. For example, a company that hires expatriate employees has limited access to the institutions of the employees’ home countries. Thus, it would be difficult to verify any claims of education or employment records of the applicants.

In an attempt to address the automation of temporary worker payments, the ChronoBank platform [24] proposed to bind the labor hours with a stablecoin currency called Labor-Hour Tokens (LHT) that can be backed by any existing fiat currency or physical store of wealth in addition to legally binding contractual obligations. However, the platform falls short of providing services to expatriate employees’ contracts due to the centralized nature of the proposed platform, where it is meant to be a single deployment and only applicable to a single economic region.

Freelancing is another approach to hiring temporary workers practiced by individuals and companies to complete a specific task during a predefined time. Most freelancing platforms [25,26] are centralized and charge significant fees. To make freelancing more cost-effective, there is a body of work [27,28] proposed to eliminate the centralized third party utilizing blockchain technology. On the other hand, this work focuses on addressing the issues of managing expatriate employees, starting from hiring, ensuring the legitimacy of the provided documents, meeting the contract terms and conditions, and terminating the contract while preserving the rights of both the worker and the employer.

3. Background

In this section, we provide background information related to expatriate employment issues. In addition, we also give a brief overview of blockchain technology.

3.1. Expatriate Employment

Expatriate employees, also called overseas employees and migrant employees, are employees who are employed outside of their home country and reside in a foreign country for the purpose of work. These employees may be employed on a permanent or temporary basis, and their duties may vary depending on their skills and qualifications. The Gulf Labor Markets Migration and Population (GLMM) program reports a number of 30 million foreign workers in the Gulf Cooperation Council (GCC), making up 52 percent of the entire population of the region [29]. The status and working conditions of these employees can vary greatly depending on the host country and their employment contract.

Expatriate employment offers numerous benefits for both the employee and the employer. For the employee, it typically provides higher income compared to local jobs, making it a financially attractive option. For the employer, it gives access to a bigger pool of skilled and qualified workers that may not be available locally. However, these benefits come with many legal, logistical, and ethical issues.

A major issue in expatriate employment contracts is determining the law that governs the employment relationship when an employment dispute arises [30]. Several reports show that expatriate employees often face employment contract issues due to the lack of legal protection and language barriers in their host countries [31,32]. They may be promised certain working conditions, wages, and benefits, but these promises are not always fulfilled. Additionally, expatriates might need to pay high recruitment fees, which can lead to debt exploitation [33]. These issues become more devastating when an employee falls victim to job fraud. Several incidents have been reported where scammers reach out to workers promising employment in exchange for a fee. Once the fee is paid, the job never materializes, leaving the employee without their money and without job prospects [34,35,36]. Even when securing the job, these workers may also be subject to poor living conditions and limited access to healthcare [37,38]. Despite efforts by the hosting countries to improve the working conditions of expatriate workers [39,40,41], reports show that in many cases, laws governing working hours and conditions are usually ignored by employers [39]. The absence of a proper employment contracting framework that gives employees full visibility of their contracts and employer history makes it difficult for them to address these contract issues, which leaves them vulnerable to abuse by their employers.

On the other hand, for most employers, background screening is still a troublesome procedure in the employment process. Most times, background screening is lengthy and inaccurate, especially when it comes to employment and education history verification. These issues are more prevalent in overseas recruitment, where background screening is more difficult due to cultural, legal, and logistical challenges. Employers must have knowledge of cross-border laws and regulations and must also find reliable sources of information about potential employees, which can make the process more complicated and costly.

3.2. Blockchain

In order to implement our framework, we utilize blockchain technology. Blockchain is an immutable, distributed ledger that stores data entries. It allows entities to interact and exchange information with each other without the need for a central trusted governing body. The ledger in the blockchain is a set of growing blocks that store data entries. These blocks are bundled together using cryptographic protocols to ensure they are tamper-proof [42]. The nodes in the blockchain use an efficient, fair, reliable, and secure process to ensure that all transactions on the network are valid and agreed upon. This process is carried out using consensus mechanisms [43].

Blockchain networks have many characteristics that make them suitable for expatriate employment contracts. These characteristics include:

• Decentralization: there is no centralized governing authority in charge of validating and approving the records in the ledger of the blockchain;
• Immutability: records stored in the blockchain are permanent and unalterable, and no node on the network will be able to change, edit, or delete them;
• Transparency: all nodes in the blockchain network have a complete and auditable copy of the ledger of transactions;
• Traceability: all transactions can be traced. Thus, a full history of any record can be retrieved at any given time.

3.2.1. Public vs. Permissioned Blockchain

Blockchain networks can be categorized into two types that vary in their accessibility and level of control: public and permissioned. A public blockchain, such as Bitcoin [12] and Ethereum [44], is open to anyone to join without any restrictions, while the permissioned blockchain (also known as a private blockchain) restricts access to the blockchain to only known participants. The basic characteristics of blockchain networks may vary between the two types. For example, public blockchains are usually more complex due to their openness, which requires a careful design and a proper consensus mechanism that may impact the network’s scalability and performance. In addition, public blockchain may not be suitable for sharing sensitive information, such as employment contract data, since shared records will be visible to all network participants. On the other hand, permissioned blockchains are more suitable for sharing sensitive data and tend to be less exposed to attacks than public blockchains due to their restrictiveness and the known identity of the network participants.

3.2.2. Blockchain Smart Contracts

Blockchain smart contracts are self-executing contracts with the terms of the agreement between two parties directly written into lines of code. The code and the agreements contained within the contract exist on a decentralized blockchain network. A smart contract is similar to a legal agreement between two parties, which includes predetermined terms and conditions on which the contract parties agreed. A smart contract is activated automatically when the terms of the agreement are met, executing them without the need for a central authority. This results in a more efficient, secure, and transparent process, as the agreement terms are recorded on the blockchain and can be audited and validated by any party on the network. Several platforms and languages have been implemented to support smart contracts.

Table 1. A comparison of smart contract platforms.

Platform	Blockchain	Network Permission	Loops Support	Programming Language
Solidity	Ethereum	public/permissioned	Yes	Solidity
Chaincode	Hyperledger Fabric	permissioned	Yes	GoLang
Simplicity	Bitcoin	Public	No	Haskell
Scilla	Zilliqa	Public	No	OCaml
Rholang	Rchain	Public/Permissioned	Yes	Java
Aplos	Mystiko	Permissioned	Yes	Scala
Pact	Kadena	Public/Permissioned	No	Haskell

compares the most popular smart contract platforms.

4. Design

We leverage blockchain technology to design a framework that manages expatriate employment contracts. It enables employers to create contracts and employees to agree to them in a decentralized manner. Consequently, employment contracts become transparent and traceable with a tamper-proof ledger for all transactions. Section 4.1 provides an overview of our framework along with its functionalities and features, and Section 4.2 lays out the details of the blockchain smart contracts that manage employment contracts. Lastly, Section 4.3 describes the blockchain network architecture.

4.1. Functionalities and Features

An employment contract represents a legal agreement between an employer and an employee, specifying job responsibilities, benefits, terms, rights, obligations, etc. We use smart contracts to manage employment contracts as digital assets in the blockchain network, including the above-mentioned details. Furthermore, a smart contract determines the transactions that all parties may execute and their conditions. Using smart contracts leads to the efficient execution of the employment contract terms and enhances transparency for employees, employers, and oversight organizations.

One may create a new smart contract to manage each employment contract. However, this one-to-one mapping would increase the number of smart contracts significantly. We leverage the fact that it is common for a set of employment agreements to share and follow the same contract template. This contract template states the duties, rights, and legal terms for a specific job description and is filled out with the details of the workers and employers for each employment contract. For example, domestic workers in Saudi Arabia follow the same contract template stating their terms and conditions [45], which is populated with the worker, employer, job, and salary details per employment contract. Thus, we design and implement each smart contract to capture a contract template. The populated information, such as the employer, worker, job, and benefit details, are stored as contract JSON objects (see Section 4.2). In essence, employment contracts are created by adding new object instances to their associated smart contract. This design enables a smart contract to manage a set of employment contracts instead of one-to-one mapping. Consequently, a smart contract may manage multiple employment contracts, while an employment contract is managed by precisely one smart contract.

We define $E{C}_{i,j}$ as an employment contract between employer i and worker j. $E{C}_{i,j}$ has a set of terms and conditions corresponding to a contract template, and $C{T}_a=\{p:pisacontractterm\}$. $E{C}_{i,j}$ is managed by a smart contract $S{C}_a$ consisting of transactions and contract JSON objects:

$$S{C}_a=\left\{\begin{array}{c}\{txn:txnisacontracttransaction\}\hfill \\ \\ \{O_{i,j}:O_{i,j}iscontractobjectbetweeniandj\}\hfill \end{array}\right.$$

$S{C}_a$ manages a set of $O_{i,j}$, and every $txn$ must obey every condition p in the corresponding $C{T}_a.$

4.1.1. Basic Transactions

An employer begins using our framework by creating an employment contract object, $O_{i,j}$. This contract object represents $E{C}_{i,j}$ and is managed by its corresponding smart contract, $S{C}_a$. Both the employer and employee perform actions by executing transactions ($txn$) of $S{C}_a$. First, the employer adds $O_{i,j}$ to the blockchain using $S{C}_a$ to initiate $E{C}_{i,j}$, which the employee must approve to establish the agreement. Moreover, transactions ($txn$) of $S{C}_a$ facilitate extending or updating the employment contract by the employer, which the employee must also approve. Another essential functionality is contract termination. An employee/employer may issue a contract termination transaction that must be approved/acknowledged by the other party.

4.1.2. Raising Disputes

An employee may issue a dispute transaction to raise job-related complaints, and her/his employer may issue a response transaction to reply to the employee’s claims. This functionality captures workplace disputes, which are very common. Employees raise disputes to protect and compensate themselves from the wrongful doings of employers as they tend to have the upper hand in the employer–employee relationship. This unfair situation is exacerbated with expatriate contacts due to the limited support for expatriate workers (see Section 3 for details). Consequently, it is critical to include disputes in our employment contract framework.

Moreover, storing employment disputes in the blockchain is a way to capture the quality of the employer–employee relationship. Employment contract terms and conditions are not comprehensive, as it is impossible to cover all aspects of the employment relationship. They tend to focus on quantitative elements, such as salaries and other benefits, leaving qualitative qualities, such as discrimination and harassment, subject to local laws. These qualities are harder to protect and prove a violation.

However, handling disputes is challenging as they may be actual or alleged. The verification of claims requires human investigation efforts. It may include several dimensions that a technical solution alone cannot handle, especially for expatriate contracts, as it may include multiple different jurisdictions. Thus, our framework provides the functionality of raising disputes and responses with a disclaimer about their correctness. This mechanism is similar to Google Maps reviews [46] that customers write about their experience with businesses.

4.1.3. Verify Working History

A blockchain-based solution to manage expatriate employment contracts provides other inherited benefits. For example, it facilitates viewing the overseas working history of job candidates. Conversely, workers can view an employer’s hiring history of expatriates. These data should aid each party in supporting their employment decision. These features are possible because all contracts and transactions are stored transparently in a tamper-proof ledger.

4.2. Employment Smart Contract

A smart contract $S{C}_a$ is implemented for each contract template $C{T}_a$ and provides the terms (p) that must be satisfied for a set of employment contracts $E{C}_{i,j}$. Our framework supports implementing multiple smart contracts to capture the various terms and conditions of employment contracts. For example, a smart contract may be created for construction workers and another for medical practitioners. Each of these smart contracts will manage the employment contracts associated with it.

An employment contract ($E{C}_{i,j}$) is converted to a digital asset ($O_{i,j}$), added to the blockchain using $S{C}_a$, and stored as key–value pairs in the blockchain network. Its key is a unique identifier for the contract, and its value is a JSON object. The JSON object contains all the employment contract information, such as job and benefits details. Figure 1 shows an example of a JSON object ($O_{i,j}$) representing an employment contract, $E{C}_{i,j}$. JSON provides the flexibility to add data items, as required, to fit the various data requirements for employment contracts. The shown JSON example consists of seven main elements, as described below.

• Contract: captures high-level contract information, such as its identification number, duration, and status;
• Employer: provides data about the employer, such as name and address details;
• Employee: provides data about the employee, such as name and contact details;
• Job: describes the job details, such as position and task description;
• Benefits: states the job benefits, such as salary, allowances, and annual increase;
• Disputes: lists the disputes, if any, that are raised by the employee with their content and the last update dates;
• Responses: list the employer responses, if any, for disputes the employee raises.

Moreover, the smart contract contains the transactions ($txn$) that employees and employers may execute as part of their employment agreements. Each transaction $txn$ implements the necessary controls and checks associated terms (p) for its actions as stated in the employment template $C{T}_a$. For example, a contract termination transaction may check the contract’s elapsed time to determine the necessary conditions according to $C{T}_a$, such as setting a maximum period of three months for unilateral termination. We do not go into the details of the checks and conditions for each transaction because they may be implemented as desired to match the employment agreement.

Smart contract transactions may be implemented to autonomously execute to enhance the efficiency and compliance of employment contracts. They may permit both employees and employers or just one party to issue them. Furthermore, these transactions may require the approval of the employee, employer, or both.

Table 2. A proposed design of smart contract transactions and their description.

Transaction	Description	Input	Output	Issuing Party	Approval Requirements
Add Contract	Create a new contract object representing an employment contract	Contract ID and JSON object	Success if the JSON contains all the necessary information and match conditions; otherwise, failure	Employer	None
Approve Contract	Approve a contract to establish the employment agreement	Contract ID	True if approved and false if rejected or contract not exists	Employee	None
Update Contract	Update an existing contract	Contract ID and JSON object	Success if the contract exists and the JSON contains all the necessary information and match conditions; otherwise, failure	Employer	Employee
Extend Contract	Extend the duration of an existing contract	Contract ID and extended duration	Success if the contract exists and matches conditions; otherwise, failure	Employer	Employee
Terminate Contract	Terminate the agreement of an existing contract	Contract ID	Success if the contract exists and matches conditions; otherwise, failure	Employer or employee	Depends on contract terms
Issue Dispute	Issue a new dispute claim related to an existing contract	Contract ID and dispute description	If the contract exists and matches transactions conditions, a dispute ID is returned; otherwise, failure	Employee	None
Update Dispute	Update a previously issued dispute	Contract ID, dispute ID, content	Success if the contract and dispute exist and match conditions; otherwise, failure	Employee	None
Close Dispute	Close an existing dispute	Contract ID and dispute ID	Success if the contract and dispute exist and match conditions; otherwise, failure	Employee	None
Respond to Dispute	Provide a response to an existing dispute	Contract ID, dispute ID, and response	Success if the contract and dispute exist and match conditions; otherwise, failure	Employer	None
View Employee History	View employment contracts belonging to an employee	Employee ID	Return stats about all contract JSON objects associated with this employee or null otherwise	Employer	None
View Employer History	View employment contracts belonging to an employer	Employer ID	Return stats about all contract JSON objects associated with this employer or null otherwise	Employee	None

shows a design of the smart contract transactions for our framework, along with their inputs, outputs, issuing party, and approval requirements. These smart contract specifications are flexible and may be changed as desired without impacting the overall framework or its value.

Reuse of Smart Contracts

Our framework may require deploying many smart contracts to capture the variety of employment contract templates ($C{T}_a$). The number of smart contracts becomes even larger as we limit a smart contract to manage employment contracts between two countries to protect data privacy (see Section 4.3 for details). This large number of smart contracts may lead to code defects [47,48] that are hard to fix because smart contracts become immutable once deployed. One solution to this issue is reusing verified smart contract code. Since smart contracts implement employment contract templates, their code may be reused to capture new templates. Code reusing and cloning techniques [49,50,51] enhance the security of smart contracts and reduce the number of bugs.

4.3. Network Architecture

This subsection describes the architecture of the blockchain network. It provides details about the selected blockchain network type, its nodes, clients, and the interaction between them.

4.3.1. Blockchain Type

Employment contracts contain personal and private data, such as contact and benefits information. Since blockchain networks are typically open and transparent, we must carefully design our framework to prevent exposing sensitive data. Consequently, we opt for a permissioned blockchain network, such as Hyperledger Fabric [52], to have better control over participants and access permissions. In contrast, a public blockchain will permit anyone to join the network and expose employment contracts’ private data. One may conceal or encrypt such data, but it will render the solution less useful and defeat the purpose of having a blockchain to share information in the first place. With a permissioned blockchain, peer nodes participating in the network are known, and data access permissions may be specified as required.

4.3.2. Blockchain Nodes

An essential aspect of expatriate employment contracts is handling the approval requirements of both the employer and worker countries. Another critical requirement is protecting the privacy of data and transactions corresponding to employment contracts. Thus, we create a private communication channel in the blockchain network between every two participating countries to manage their employment contracts (see Figure 2). Each channel has its own ledger of transactions. More than two countries could establish a channel between them. However, required access permissions must be set to protect the privacy of data, as it becomes exposed to all countries in that channel.

Furthermore, we limit each smart contract ($S{C}_a$) to manage employment contracts between exactly two countries and deploy it on the proper blockchain channel. For example, Saudi Arabia and India may create one or more smart contracts to manage their employment contracts and deploy them on their corresponding channel. New smart contracts must be created to manage the employment contracts between Saudi Arabia and the Philippines.

Member countries are represented as peer nodes in a blockchain network channel. These peers could be governmental agencies responsible for the job and foreign affairs, such as the Ministry of Labor or the Ministry of Exterior. They handle the creation of smart contracts and execute transactions on their channels. Peers accept requests from employees/employers who are represented as clients. A peer has access to smart contracts ($S{C}_a$) to manage the employment contracts $E{C}_{i,j}$ of its employees and employers. Each peer uses the proper smart contracts to access and manage the employment contracts belonging to its country.

4.3.3. Blockchain Clients

A peer node receives requests from clients (i.e., employers/employees) to execute transactions $txn$ of $S{C}_a$, such as initiating and extending an employment contract. First, the designated peer must approve the transaction and sign it using its Public Key Infrastructure (PKI) [53,54] to prove its identity. Then, the peer issues and executes the smart contract transaction to record it in its blockchain network channel.

A client sends requests through its county’s peer to execute transactions in the blockchain network channel. The method of communication between peers and their clients is outside the scope of the blockchain network and may be implemented in various ways. Countries may select their proper mechanisms for peer–client communications. For example, a country may provide a web portal for its citizens to communicate with the designated peer in the blockchain network. This peer–client design ensures that any transaction executed in the blockchain network is verified by the designated agency of its issuing country and complies with its regulations.

To summarize, we show a high-level workflow of managing employment smart contracts in Figure 3. It begins with two countries joining a blockchain channel and creating a smart contract. After deployment, employees/employers perform actions by executing smart contract transactions through their country peers.

5. Framework Analysis

We analyze the main qualitative properties of our proposed framework presented in Section 4 from different aspects. We describe and analyze each property, such as integrity and transparency, in the context of managing expatriate employment contracts. The proposed framework uses the permissioned blockchain Hyperledger Fabric framework (HLF), which enables building highly configurable networks.

5.1. Integrity and Non-Repudiation

Public key infrastructure (PKI) is an essential building block of the distributed ledger technology where the transaction cannot be appended to the chain unless the transaction has an authorized digital signature that ensures integrity and non-repudiation.

5.2. Transparency

Transparency is one of the most significant features of blockchain technology. Employees, employers, and government organizations are able to view all transactions and track their history. Additionally, the deployed smart contract is verified and agreed upon. This helps the network achieve a high confidence level between all the network participants. More specifically, the two participating countries—the country representing the employee and the other county representing the employer—have an identical approved smart contract. Any transactions should satisfy the terms and conditions of the approved smart contract. Additionally, any unilateral attempt to change the terms and conditions without the approval of the other peer means the transaction violates the smart contract and would be rejected.

5.3. Immutability

Blockchain technology inherently ensures the immutability of the stored information as this information is protected and tamper-proof by employing the hashing of the previous block. Therefore, any malicious change attempt in any piece of the transaction would invalidate all the following blocks.

5.4. Scalability

The underlying components of the blockchain network heavily affect the scalability of the running application. One of the major factors impacting scalability is the consensus protocol. Choosing the right consensus protocol can help the scalability significantly. Since the proposed framework is implemented using HLF, which is a highly scalable network compared to the public blockchain network such as Ethereum. Several studies in the literature have evaluated HLF scalability extensively [55,56,57,58,59,60].

5.5. Security and Privacy

The permissioned blockchain network ensures security because of the access control layer. All the network participants are known in contrast to the public blockchain. Thus, only network participants (the participating two countries in our case) are allowed to execute the transactions to which they are authorized. In the same way, privacy is ensured by the channel that is established between the participants to exchange data between them. Therefore, the data are exclusively limited to the channel participants, and no one outside the network has access to these data. Updating the data should be conducted according to the approved smart contract by which all transactions are governed.

6. Prototype Implementation

We use Hyperledger Fabric [52] to implement a proof of concept for our framework [61] as a permissioned blockchain network. Furthermore, we employ the Fablo tool to spin off a Hyperledger Fabric network [62] quickly. The blockchain network comprises two organizations representing CountryA and CountryB. Each country has a Membership Service Provider (MSP) that handles identity and authentication issues using PKI. We utilize Hyperledger Fabric’s cryptogen utility tool to generate the public and private keys for all entities in the network. We create two orderer instances for the ordering service of Hyperledger Fabric. The ordering service implements Raft as the consensus protocol [63] for the blockchain network.

We create a peer node for each country to maintain a replica of the blockchain ledger state. Multiple peers per country can be created for availability and durability purposes. Peers issue read/write transactions on behalf of their countries and act as endorsers that must approve transactions to be considered valid. We implement one smart contract ($S{C}_a$) that captures an employment agreement template ($C{T}_a$) between CountryA and CountryB. The smart contract stores the associated employment contracts digitally as key–value pairs. A digital employment contract is represented as a JSON object ($O_{i,j}$) capturing its content and benefit details, along with the smart contract’s transactions ($txn$), implementing the actions and processes of the $C{T}_a$ and satisfying all of its terms (p).

Next, we build one channel to privately communicate between CountryA and CountryB and deploy the created smart contract ($S{C}_a$) on it. For evaluation, we show screenshots of the execution of the smart contract transactions. The performance and overhead characteristics of our framework are dependent on its underlying blockchain platform, namely Hyperledger Fabric (HLF). The performance and scalability of HLF have been extensively evaluated in previous work [55,56,57,58,59,60], showing superior results. This is attributed to several design decisions, including the fact that HLF operates in a permissioned blockchain network, which allows it to opt for more scalable consensus protocols and avoid protocols with limited performance characteristics, such as Proof of Work [64,65].

Prototype Demonstration

We implement a smart contract in Golang [66] with the transactions shown in Figure 4. First, we show the peer of CountryA representing an employer and executing the “AddContract” transaction with a JSON object as input. The JSON object represents the employment contract to be added with status “Pending” (see Figure 5). The peer of CountryB represents the employee and executes the transaction “ApproveContract” or “RejectContract” to either approve or reject the contract, respectively, and sets its status accordingly. Figure 6 shows the employee peer approving the contract, changing its status to “Active”.

We show the execution of “UpdateContract” and “ExtendContract” transactions to update and extend the contract, respectively, (see Figure 7 and Figure 8). Both the employer and employee peers must approve these transactions. A new JSON file is provided as input to the “UpdateContract” transaction, as shown in Figure 7. For “ExtendContract”, the contract extension transaction has failed due to violating one control of the employment agreement that permits contract extensions during the last three months (see Figure 8).

Next, we show the cycle of raising disputes. An employee issues a dispute through her/his peer, CountryB, and executes the “IssueDispute” transaction with the dispute content and contract ID as inputs (see Figure 9). The employer responds to her/his peer, CountryA, and executes the “RespondDispute” transaction with the response content, contract, and dispute IDs as inputs (see Figure 10). Finally, the employee closes the dispute through her/his peer, CountryB, and executes the “CloseDispute” transaction with the contract and dispute IDs as input (see Figure 11).

Last, we show the employee and employer contract histories by looking up their IDs and viewing their previous contract statistics in Figure 12 and Figure 13, respectively. We show the total number of contracts, specifying their status as terminated, active, or pending. We show similar stats for the number of disputes and their status as open or closed. Retrieved stats can be easily extended to compute the desired metrics since all contracts and transactions are stored transparently in the blockchain network.

7. Discussion

Our proposed framework is an application of blockchain and smart contracts to manage expatriate employment contracts between countries in a decentralized manner. Each country joins a blockchain network and executes transactions that are governed by smart contracts to manage the work agreements of its employees/employers. Thus, successful implementation of this framework requires government endorsement to utilize its benefits and enforce legal consequences. Countries may approve the use of this framework as part of their foreign governments’ agreements to help protect their workers/employers and ensure compliance. If our solution is widely adopted, its collected data will be great assets for understanding and analyzing expatriate employment contracts and their issues. Furthermore, it can be utilized to determine the local needs of the workforce and potentially predict them using machine learning models. Similarly, it may help guide the hiring of workers with certain skills, as it provides a verified record of overseas working experience.

This blockchain-based framework has two main challenges: off-chain requirements and contract compliance verification. Governments may require essential actions or paperwork before establishing employment agreements that are outside the blockchain network and scope. For example, governments may require employers and employees to obtain work permits. This ensures that local laws and regulations are followed. However, these requirements are external to the blockchain network and require integrating with local agencies to obtain and verify off-chain data. Our framework may facilitate fulfilling these requirements via smart contracts. However, it must be extended to support retrieving and verifying external and off-chain data accordingly. For example, before initiating an employment contract, both the employee and employer must provide the prerequisite documents as input to the smart contract. The blockchain network must be integrated with the necessary government application programming interfaces (APIs) to verify the validity and completeness of these documents. Another solution to increase the boundary and scope of our framework is through blockchain interoperability. Recently, there is some theoretical and practical studies conducted to propose new approaches of cross-chain bridges to facilitate sharing and exchanging data between heterogeneous blockchain networks [67].

The second challenge is compliance verification with some employment contract terms and conditions. For instance, a contract may require an employee to work up to 50 h per week. However, an employer may violate this contract term by forcing her/his employee to work more hours or accept a reduced salary than agreed upon in the contract. Furthermore, an employee may be forced to work a job different than what is stated in her/his contract. For example, an employee accepting a technician job position may be forced to work as a delivery driver, violating the job description of the signed contract.

Our framework cannot verify compliance for specific contract terms as they may require manual investigation efforts or processing of external supporting documents, such as bank statements. We mitigate this limitation by enabling employees to raise disputes. An employee may use this functionality to highlight any issues related to her/his contract and record it in the blockchain.

8. Conclusions

The management of current expatriate employment contracts may be optimized to provide a better experience for workers and employers. Therefore, we propose a framework that leverages smart contracts to manage employment agreements as digital assets in the blockchain network in a decentralized manner. Blockchains are highly customizable networks. Legal terms, job details, benefits, and other related standards and conditions may practically be modeled using smart contracts. We show that our framework supports implementing varying smart contracts depending on the terms and conditions of the employment contracts that need to be managed. This flexibility is very necessary to accommodate the varying nature of expatriate jobs. Additionally, the proposed smart contract transactions are designed to establish trust among workers and employers by maintaining transparent historical employment records. This accounts for many of the issues with current employment contracts. Our choice of implementing a system on a permissioned blockchain network is justified by the need to protect contracts’ sensitive data-leveraging properties that are inherent to the blockchain, namely: (1) integrity and non-repudiation, (2) transparency, (3) immutability of information, (4) scalability, and (5) security and privacy. To put this into context, we provide a publicly available concrete implementation of our proposed framework with one smart contract that can perform 12 different transaction types. Finally, while our proposed framework may not guarantee the enforcement of contract agreements, it provides tools to mitigate violations of such agreements resulting from the inability to verify historical employment records or check dispute cases. The proposed framework may be further extended in the future by adding applications that enable workers and employers to query de-identified statistical summaries about expatriate employment contracts from the blockchain. Such a configuration would greatly benefit understanding the existing issues and overall satisfaction levels across different industries and participating countries.