Thursday, February 12, 2009

Part 4, The Islamic Rules of Trade - Employment

Due to the current global financial crisis there is increasing interest in the Islamic Economic System, the most comprehensive book on this topic is 'The Economic System of Islam' by Sheikh Taqiuddin an-Nabhani. However as people have many questions relating to the Islamic rules of trade we will be posting related extracts from the draft translation of the Fiqh masterpiece 'The Islamic Personality, Volume 2' by Sheikh Taqiuddin an-Nabhani.

Hiring is a contract over benefit in return for recompense, and there enters under it three types:

The first type—Where the contract comes over the benefit of things like hiring houses, animals, vehicles and the like.

The second type—Where the contract comes over the benefit of work like employing the owners of professions and crafts for specific works. The matter which is contracted over is the benefit resulting from the work such as hiring painters, blacksmiths, carpenters and the like.

The third type—Where the contract comes over the benefit of the person, like hiring servants and labourers and the like.

Hiring in all its types is permitted by the Shar’a. Allah ta’ala said:
وَرَفَعْنَا بَعْضَهُمْ فَوْقَ بَعْضٍ دَرَجَاتٍ لِيَتَّخِذَ بَعْضُهُمْ بَعْضًا سُخْرِيًّا
“And We raised some of them above others in rank so that some of them take others as (sukhriyy)” [TMQ 43: 32].

And He said:
فَإِنْ أَرْضَعْنَ لَكُمْ فَآَتُوهُنَّ أُجُورَهُنَّ
“If they give suck for you, so some may command work from others”[TMQ 65:6].

Al-Bayhaqi narrated via the way of Abu Hurayra that the Prophet (SAW) said:
“Whoever hires an employee, he should let him know his wage.”
Al-Bukhari also narrated “that the Prophet (SAW) and As-Siddeeq hired a man from Banu Ad-Deel as a skilled guide (in desert).”


The contract of hiring/employment which comes over the benefit of work and the benefit of the person is the one which relates to the employee. The employee is one who gives himself in for hiring. The Shar’a has permitted the hiring of the human being for a benefit resulting from him like servants and the like or the benefit resulting from his work like painting, bleaching, engineering and the like. In order for the hiring to be convened, the competence of the two contractors is a condition such that each of the two should be sane and mature. The hiring of the insane is not convened, nor the hiring of below discretionary age child. If the hiring is convened, the consent of the two contractors is a condition of its validity, and that which is contracted upon—which is the benefit—be known in a way that prevents dispute. This knowledge of the benefit, in relation to the employee, is at times by explaining the period, at other times by determining the benefit, or describing the required work in a detailed description and specifying what the employee will do or specifying how he will work. Accordingly, hiring the coerced person is not valid, nor is the hiring of an unknown benefit.


It is a condition that the money of the hiring be known by sight or a description that removes ignorance.
He (SAW) said:
“Whoever believes in Allah and the Last Day should not employ an employee until he informs him his wage.”
Value, however, is not a condition in the wage just as it is not a condition in the price of a sold good. The diffrence between the value and the price is that the value is what conforms with the fiscal measure of the thing, and is equal to it according to the assessment of the experts. As for the price, it is what was mutually agreed upon according to the value or greater or less (than that). It is not a condition that the wage of the employee be the value of the work because the value is not a recompense in the hiring. Thus it is permitted for the wage to be more than the work’s value, and it is permitted to be less than the value of the work. If a person were to hire an employee for a known wage so as to mould for him a piece of gold or silver in a specific fashion, then it is permitted as he is hired for a specific work. The equivalence is not a condition between the wage and what he works with of silver and gold in the weight. This is because that which is a condition in the wage is the recompense of the work, not the recompense of the subject of work which he performs. Whatever is suitable to be recompense/returnin sale like cash and the like is suitable to be a recompense/return in hiring i.e. whatever is suitable to be a price is suitable to be a wage. That which is not suitable to be a price in sale is permitted to be a recompense in hiring. For example, it is not permitted to buy an animal in return for residing in a house for a year, but it is valid to hire a garden (in return) for residing in a house. This is because sale is exchanging a (mal) property for a property, but exchanging wealth for benefit is not considered a sale. Contrary to hiring which is a contract over a benefit for a recompense/return, and this recompense needs not necessarily be wealth, but can be a benefit.


Hiring is known as being a contract over benefit for a recompense. This contract comes in three types:

Firstly: A type coming over the benefits of things like hiring houses, animals, vehicles and the like. What is contracted upon is the benefit of the thing.

Secondly: A type coming upon the benefits of work like painting, engineering, building and the like. What is contracted upon is the benefit of the work.

Thirdly: A type coming upon the benefits of persons like servants, labourers and the like. What is contracted upon is the benefit of the effort of the person.
In these three types, what was contracted upon was the benefit in each one of them. So the thing upon which the contract occurred is the benefit. The money mentioned is the return for this benefit. Hence the basis upon which estimating the wage is based is the benefit given by this thing or this work or that person. In relation towards it is not related to the value of the thing worked upon or its price, nor his productivity in relation to the employee just as it is not to meet the need of the employee. Similarly there is no relation to the increase of the living standard, or its decrease, in estimating it. So it is not valid to relate the estimation of the wage to the value of the thing or its price or the worker’s productivity or the satisfaction of his needs; nor does the rise or decline in the living standard have a role in its estimation. Its estimation returns to only one thing which is the benefit, because it is a contract over benefit in return of recompense. The wage is estimated according to the measure of benefit upon which the hiring contract occurred. In case of difference (of opinion) over the amount of wage, it is not estimated by evidence and proof as there is no role for evidence therein for it is not intended to prove the wage, rather to know its amount. Its amount is determined by the estimation of those who are experts of the benefit over which the hiring contract occurred and the experts in the estimation of its recompense.

This is in regards to the basis of the wage, or in other words the unit upon which estimation of the wage occurs. As in regards to its difference, it differs according to difference of the benefit in persons and in the same job and different jobs, and in the time and place. The wage of workers on whom the contract was concluded/based on the benefits of their persons, differs according to the effort which they expend; so the wage is estimated as so much for the strong and so much for the weak; or so much wage for so many hours of work; and more wage for more hours and less wage for less hours, and so on….The estimation of wage for the same type of work on which the contract of hiring was concluded/based on the benefit of work, by a specific amount, and it will differ between the persons who perform this type of work according to the difference of their perfection to it, like engineers for example. So the engineer will be given so much as a wage, and it will differ between engineers by the change of their perfection. Similarly the estimation of the wage for the different jobs occurs according to the benefit intended therein at the time of hiring those working therein i.e. the craftsmen.

The wage for these jobs will differ based on the difference of their benefit in view of the society, so the engineer’s wage will be so much, the builder’s wage so much and so on….The wage of the persons, in one job or different jobs, is estimated differently according to the difference in time. For example, the worker at night is given more than the worker working during daytime in the same job. Similarly the wage of the persons, in the same job and different jobs is estimated differently according to the difference in place. For example the worker in the desert is given more than worker doing the same job in the city and so on… It is permitted to estimate the wage linked to a specific time like the hour, day, month and year.


The wage of the employee could be (musma) named/mentioned, and it could be the wage of the equivalent. As for the mentioned wage, it is the wage mentioned and specified at the time of the contract. It is considered of the mentioned wage, the workers each of whom knows his wage, like officials in a specific grade or labourers in a specific factory where the wage of its labourer is well known. Hence if you used labourers or officials and you named their wage, then the named is their wage. If their wage is not named, it needs to be examined whether it is known so it is given to them and is considered a named wage, or it is not known, then they are given the equivalent/like wage.

The equivalent wage is the wage of the similar work and the similar worker, or the wage of the similar worker only. The estimation of the equivalent wage must be by the experts, and the experts are obliged to specify the wage by looking into the person of the employee. For estimating the equivalent wage, three matters must be looked into:-

One: If the wage was over the benefit, it needs to look into the thing whose benefit is equivalent to the benefit of the hired (thing).

Two: If the benefit was over the work, it needs to look into the person similar to the employee in that work i.e. to look into the work and worker.

Third: To look at the time and place of hiring, because the wage changes according to the change of benefit, work, time and place.
The knowledge of wage of the equivalent depends on the exprts; so it is not permitted for the claimant to establish evidence upon it. Rather it is obligatory to be estimated by experts free of self-interest (not biased), so the two disputing parties choose them by consent. If the two did not agree, the ruler chooses them.


It is permitted to pay the wage immediately, and it is permitted to delay it. If the two contractors stipulated paying the wage immediately or delaying it, the condition is observed.

He (SAW) said: “Muslims are bound by their conditions” (narrated by Al-Bukhari).

Everything the two contractors stipulated regarding the immediate or delay paying the wage is considered and observed. However, if the two contractors did not stipulate anything regarding paying the wage, it is looked into. If the wage is periodic at a specific time like monthly or yearly, it is necessary to be paid at the end of that time. If it is monthly it is paid at the end of the month, and if it is yearly it is paid at the end of the year. However if the hiring is upon work like sewing clothes, digging a well, repairing a car or the like, it must be paid at the end of the work. It is allowed to reiterate/repeat the wage in two forms or three, in the work, the worker, distance, time and place; it is obliged to pay the wage according to the form actually conducted. For example, if he says to the tailor, ‘If you sew in a minute, then for you is so much’ or “Sew thickly, then for you is so much’, he is paid for whichever of the two forms of work he performed for him.


The employee is divided into private (khass) and common (mushtarak). The private employee is the one who works an appointed work for specifically one or more (persons) i.e. he is the one assigned exclusively to the employer alone and is prevented from working for anyone else throughout the period of hiring. For example if one person or more hired a cook to cook for them specifically appointing to him the period, that cook is a private employee.
The common employee is the one who works for somebody in a work that is not secured or temporary work without stipulating specification upon him i.e. he is the one not assigned exclusively to the employer. Rather it is permitted for him to work for other than the employer. If you were to hire a person to upholster the house furniture without stipulating upon him that he should not upholster for another, then he is a common employee whether he was in your house or in his place and whether a time period for upholstery was specified for him or not.

The private employee deserves the wage by making himself available during the time period to discharge what he is charged with together with his capability to do the work, whether he performed the work or not. His deserve of the wage is according to the time period not according to the work. Therefore, he is not allowed to work in the time period of the hiring for other than his employer. If he worked for someone else, his wage is reduced in proportion to his work. The common employee deserves the wage for the actual work like sewing, carpentry, painting, sailor etc….His deserve of the wage is according to the work and not according to the time period.

The difference between the private employee and the common employee in regards to the guarantee of what he holds is that the private employee is reliable so if something is destroyed in his hands accidentally and without his complacence and negligence, there is no responsibility upon him. As for the common employee, either the thing he destroyed by his action or not. If it is destroyed by his action he guarantees it whether he destroyed it deliberately or not. If it is destroyed without his action, it has to be examined. If it was unavoidable then he is not responsible; whereas if it was possible to protect it but he did not not do that then he does guarantee. This is because the thing with which the private employee works, even if it is under his hand, is under the disposal of the employer not under the employee’s disposal. Accordingly his hand (power over it) is the hand of trustee. This is contrary to the common employee, where the thing he is working with is under his disposal i.e. under the employee’s disposal not under the employer’s disposal; accordingly his hand (power) is not the hand of trustee but rather the hand of a disposer.

The difference between the two (types) in relation to the entitlement of the wage is that the private employee deserves the wage if during the hiring period he was present for work, and his actual work is not a condition. The common employee does not deserve the wage except by work. The hiring period for the private employee is either determined in the contract or not. If it is not determined, the contract is invalid due to its ignorance. Each one of the two contractors may invalidate it at any time he wishes, and the employee is entitled of the equivalent wage for the period of his service. If it is determined in the contract, and the employer invalidates the hiring before the end of the period and there is no excuse or defect in the employee obliging the invalidation like his illness or weakness in work, it is obliged upon the employer to pay the employee his wage upto the end of the period whether the employee was a servant or farm worker or other than that. However if he invalidated the hiring due to an excuse or defect on the side of the employee obliging the invalidation, then he is not bound to pay the wage except to the time when the hiring was annulled.

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