(18.2) Labor Services
(18.2) Labor Services
Question (1):
A client requested us to provide him with different types of building materials (in Murabaha sale) and at the same time asked us to pay in cash the wages of the construction contractor until the completion of the construction project.
Is it permissible to pay in cash the wages of that contractor and consider it as (Murabaha sale) in addition to the Murabaha sale of building materials?
Answer:
The Committee sees that the first part of the question, regarding the sale of building materials in Murabaha, is permissible, whereas the second part of the question, regarding the payment of wages of building contractor in cash to be added to the Murabaha sale of the building materials, is Shariah impermissible because wages thus have become a debt and debt could be paid only in its kind otherwise it changes into usury.
Source:
Kuwait Finance House, Book of "Religious Opinions on economic issues", part (1), and (2), Fatwa No. (117).
Question (2):
It is well known that the components of agricultural projects involve fixed assets and other inputs (including fertilizers, seeds, animals and employees) … etc. The bank may finance some elements of the project in Murabaha through purchasing and selling them to the project owner. This would apply without restriction to some components and inputs. If it happened that the bank agreed to finance the whole inputs in Murabaha mode we face the problem of employees as it is difficult to possess and sells them in Murabaha to the project owner. This applies to other services, such as hiring of tractors and other necessary inputs.
This may be a barrier that prevents the implementation of the project, in which the owner possesses only the fixed assets. It comes to mind that ownership can be possessed constructively in the sense to let the project owner contract with a group of workers This may be a barrier that prevents the implementation of the project, in which the owner possesses only the fixed assets. It comes to mind that ownership can be possessed constructively in the sense to let the project owner contract with a group of workers
Answer:
Murabaha in the cost of labor is not possible, yet if the bank wants to finance all the operations of the project, it may enter through Muzara (sharecropping), Mudharabah or Musharakah modes. The first requires the existence of qualified personnel at the bank to supervise the project which might be extremely expensive, while Mudharaba is banned outright by the orders of the Bank of Sudan. There remains only the mode of partnership (Musharaka) which is operated as follows: the bank enters into partnership where capital is shared between the bank and the client in in an agreed ratio, for example 20% - 80%.Then out of the money of the existing partnership the rental of the land including all requirements of the project can be paid as well as the bank undertakes to pay, out of the Murabaha in the cost of labor is not possible, yet if the bank wants to finance all the operations of the project, it may enter through Muzara (sharecropping), Mudharabah or Musharakah modes. The first requires the existence of qualified personnel at the bank to supervise the project which might be extremely expensive, while Mudharaba is banned outright by the orders of the Bank of Sudan. There remains only the mode of partnership (Musharaka) which is operated as follows: the bank enters into partnership where capital is shared between the bank and the client in in an agreed ratio, for example 20% - 80%.Then out of the money of the existing partnership the rental of the land including all requirements of the project can be paid as well as the bank undertakes to pay, out of the
Hence, the bank is not allowed to finance the cost of labor through Murabaha transaction as well as the purchase orderer is not allowed to have constructive or actual possession of it as they are mere services and not a commodity offered for purchase.
Source:
Shari'ah Board Fatwas, Islamic Bank of Western Sudan, Fatwah No. (18).