We have a contract that was awarded in the United States to an American Contractor, who is employing American personnel to provide the service on an American installation in a host country (Contractor Authorized to Accompany the Force). The contractor employee signed a contract with their employer that clearly dictated the hours they were to work. Contract employee has now filed grievance with host nation complaining that the hours are not consistent with host nation labor law regulations which can be very restrictive during certain months of the year. Would the host nation labor laws apply to this person? They appear to be designed more to protect OCN's and TCN's that we hire with locally written contracts. This is not a construction contract.
From an overall perspective, here is an analysis of the situation for consideration by the questioner's DoD organization:
If the country described in the question allows U.S. citizens (a foreign national from that country's perspective) who are employed under contracts awarded in the U.S. for work at an U.S. installation in that country. -- something that should be researched by the U.S. company's legal department -- then the U.S. company would be obligated to participate in that country's labor grievance adjudication system if the employee were still employed.
However, it appears that the U.S. citizen employee signed an employment contract/arrangement as a condition of employment under the U.S. contract. Their employment could be terminated pursuant to the terms of the contract and their employment contract/arrangement for failure to honor the terms and conditions of their contract/arrangement. If the employee decided to contest their dismissal, the legal adjudication would occur within the U.S. pursuant to U.S. laws and regulations that govern employee dismissals. If such action were taken, it's very unlikely that that there would be any further basis for the employee's employment grievance on working conditions within the foreign country's legal/regulatory process.
Hopefully this general analysis of the situation is helpful. However, the DoD Component contracting and legal personnel should be consulted before any advice is provided to the DoD contractor involved in this employment situation.