Pension for retired worker
14-1-2006 | IslamWeb
Question:
I am working in a private company. According the rules the employer is entitled to give gratuity and allowances (not bonus or dividend) in accordance with the service of the employee when he/she leaves the firm. But some employers argue that it is not compulsory to give the gratuity and allowances. What is the Shariah ruling regarding this issue? Please give the answer in English.
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
The pension for retired workers is either taken from his wages or is a gift from his employer. If it is conditioned in the work contract then it is wages and therefore it must be known. It is usually a month's pay taken every year and it is only paid back to the employee at the end of his work. In case there is no clear mention of it in the contract but it is a custom for companies or ministries to recompense its employees at the end of their work, then it must be given to the employee, and the employee has the right to ask for it as this is the custom and therefore it is as if it is conditioned by text.
Shaykh Az-Zuhayli
a member of the Islamic Fiqh Committee, said: 'It is legislated [permissible] to recompense the employee at the end of the work term, and rules impose it; it has become an established custom and a right. This is considered as part of a delayed payment for the end of work, unless the employee renounces it with his own will without being materially or psychologically forced.'
However, if the recompense is not stated in the work contract, neither by text nor by custom, then it is considered a gift from the employer (the company or the ministry and the like), and the gift can only be claimed if it was already possessed by the employee and not before it had been gifted to him, because if it had not been gifted to him he cannot oblige the employer to gift it for him.
Allaah Knows best.