What is the ruling of Islamic law regarding profits made by an employee for himself using the advantages of his position without the knowledge of his company, and are these profits considered solely the right of the employee, or does the company have a share in them?
The answer covers several points:
1. Ruling on the agreement between the company and the employee: Combining a salary () with a percentage of profits () in one contract is not permissible according to the majority of scholars, because it makes the remuneration unknown and involves (uncertainty), and the Prophet, peace and blessings be upon him, forbade gharar and hiring a worker without clarifying their wages. Some scholars (such as the Hanbalis and Ibn Sirin) permit the remuneration to be a percentage of the profit in certain cases, but they do not permit combining it with a known salary in one contract. The first opinion (non-permissibility) is the correct one. To rectify the transaction, it must either be a mudarabah (you get a percentage of the profit from money you invest), or an ijarah (you get a known salary for known work).
2. Ruling on personal buying and selling using company resources: What you did, buying and selling for your personal account with your own money, using company time, tools, and name, is . You must repent to Allah and compensate the company for the time you spent, and pay a fair rent (ujrat al-mithl) for using its tools and name. The profit generated from this sale with your own money is yours, but you have misused company resources without permission.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Ftawy
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- 65050
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- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy