Islamic Commercial Law and Social Justice: Shari’ah Compliant Companies, Workers’ Rights, and the Living Wage
37 Pages Posted: 11 Aug 2013 Last revised: 23 Feb 2014
Date Written: April 10, 2012
The purpose of this article is to examine workers’ rights under Islamic law. The Shari’ah-based financing, investing and related industries establish their businesses on claims that they comply with the Shari’ah’s mandates for commercial practices. They focus almost exclusively on the prohibitions on interest, excessive risk and avoidance of dealing with prohibited products and services. However, companies claiming to be in compliance with the Islamic Shari’ah must look beyond the forms of the transactions or the content of the products they sell. The companies and their Shari’ah advisors must also examine the treatment of the workers employed by the companies. As this article will show, the fair treatment of workers is clearly relevant to the analysis of whether a company is Shari’ah compliant. The Qu’ran, the teachings of the Prophet (P.B.U.H.), and the writings of the scholars are replete with instructions regarding the fair treatment of workers. If the workers are not being treated fairly in accordance with Islamic law, the owners of these companies and their Shari’ah advisors should not claim that the companies and products are Shari’ah compliant. This article begins with a case study of janitors working in a building in Indiana that houses one of the offices of a large international company that claims to be conducting its business in accordance with Shari’ah. However, the janitors were being paid less than a living wage. This author argues that under Shari’ah, this practice amounts to the exploitation of the workers and that any company that pays less than a living wage, or benefits from these low wages should not claim to be Shari’ah compliant. Part I of the article gives the reader an overview of the Shari’ah compliant industries and the sources of fiqh (jurisprudence) that are generally relied upon to guarantee Shari’ah compliance. Part III explores the intersection of Islamic commercial law, religious duty and business ethics. Part IV argues based on both classical and contemporary sources of fiqh that the Shari’ah clearly requires the fair treatment of workers. Part V suggests strategies for the implementation and standardization of Shari’ah compliance that would include the fair treatment of workers through requiring those companies that claim to be Shari’ah compliant to pay workers a living wage. The article includes a fatwa issued by Dr. Muzammil Siddiqi, President of the Fiqh Council of North America (2006) which supports the author’s arguments.
Keywords: Shari'ah, sharia, Shariah, Islamic Law, Islamic Finance, Sharia compliance, workers' rights, living wage, law and religion, Islam
JEL Classification: D63, D64, I30, I31, J30, K31, N85, Z10
Suggested Citation: Suggested Citation