Employees receiving a bonus from the company

Q: I work for an engineering consulting firm. Our fees are mainly derived from consulting services for clients.

The firm is owned in a trust with the employees being the shareholders. The employees are allocated ‘shares’ based on their length of service and seniority in the firm. The employees do not buy any shares when entering into the firm, and neither do they sell any shares when leaving. Rather, the shares are merely allocated to them for the duration of their employment.

Every six months, a portion of surplus cash is allocated as profit and distributed amongst the employees according to their allocation of shares. The amount will be dependant on the performance of the company and the cash balance available at the time of allocation. No other bonus/13th cheque is paid. This profit share is over and above the regular salary that each employee receives.

Is this type of employment contract permissible?

A: This is just an additional perk from the side of the company. It is not a share, rather a commission in recognition of their performance and work.

And Allah Ta'ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)