Darul Ifta Ibn Masood

Salaries And Wages

· 17 Rabiʻ II 1448 AH1 min readEnglish

Question

Regarding increases or decreases in annual salaries and wages, is the employee’s relationship with an employer similar to that of a seller and buyer? Meaning, does the employee “sell” labour to the employer? In the absence of an employment contract, do the salary/wage changes need to be negotiated (e.g. yearly) and agreed upon by the employer & employee for it to be valid according Shariah?

Answer

According to Hanafi Fiqh, the relationship between an employer and an employee is classified as Ijaarah —a contract of hiring rather than a literal sale. More precisely, the employer acquires the employee’s lawful services/labour, for an agreed wage. Ijaarah is a transaction involving a known benefit in exchange for an agreeable compensation.

References (Arabic / Urdu sources)

( هِيَ بَيْعُ مَنْفَعَةٍ مَعْلُومَةٍ بِأَجْرٍ مَعْلُومٍ ) … أَيْ الْإِجَارَةُ اسْمٌ لِلْأُجْرَةِ وَهِيَ مَا أُعْطِيَ مِنْ كِرَاءِ الْأَجِيرِ وَقَدْ أَجَرَهُ إذَا أَعْطَاهُ أُجْرَتَهُ وَالْأَجْرُ مَا يُسْتَحَقُّ عَلَى عَمَلِ الْخَيْرِ(تبيين الحقائق شرح كنز الدقائق وحاشية الشلبي 5/ 105

Answered by
Mufti Ahmed Saeed
Checked & approved by
Mufti Yacoob Vally Saheb
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Source: Darul Ifta Ibn Masood — https://fataawa.co.za/salaries-and-wages6/
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