Need Advice: Experience Letter vs Mental Health — Is It Worth It?

This is not for me but written by a friend facing this issue. Please help or advise on this.

I’ve been working on a contract basis with a foreign-based company through my college placement. It’s been nearly 2 years, but the work culture has become increasingly toxic — salaries are often delayed, policies don’t support employees, and we’re under constant pressure.

I resigned recently due to personal reasons and requested an early release, which was declined. I agreed to continue, but instead of handing over my own work, I’m now being made responsible for a colleague’s critical tasks (he’s also resigned). We’ve been warned that if we don’t serve the full notice and continue working hard, they’ll withhold our experience letters.

I have a signed contract, an accepted resignation email, and even public praise from HR on LinkedIn as proof of my contributions.

My question is:

As a contractual employee (not officially on payroll), how important is an experience letter really? Should I keep working at the cost of my mental health just for a piece of paper? I don't have official salary slips, experience and relieving letter. Will that be a problem when I apply for new roles?

Also worth noting: my college has now blacklisted this company after multiple complaints from ex-employees placed there.

Would love to hear if anyone’s faced something similar or has legal insight.