SS 34 · Services

SS 34: Hiring of Persons

What this standard is about

In Islamic law, hiring a person is a type of ijarah. Most people know ijarah as leasing a property, but the same contract idea applies to human work: one side provides a service, the other pays an agreed wage.

The standard defines hiring as a contract through which the work or service of a person — or a company — is obtained for a specific payment. The work can be a specific task or a future service described in detailed terms, such as teaching, medical care, or consultancy. It covers employment relationships and the professional services that Islamic financial institutions buy and sell.

Why it exists

Service contracts are everywhere in modern finance. Banks hire staff, outsource IT, and buy consultancy. Clear rules prevent disputes about pay, duties, and what happens when the work is not done properly.

The key rules, simply put

The wage (ujrah) must be clearly specified when the contract is made.
The work must be clearly described, so both sides know exactly what is expected.
The person hired (ajir) must be capable of doing the work.
The employer (musta'jir) must pay the agreed wage once the work is delivered.
The work itself must be halal — hiring someone for a forbidden activity is not allowed.
The service can be for a fixed period or for a defined task.
Like other ijarah contracts, it is binding: neither side can walk away without the other's agreement or a valid reason.

An everyday example

An Islamic bank hires a consultancy firm to review its IT security over three months for a fixed fee of $50,000. The contract describes exactly what the firm will deliver. Once the work is done and accepted, the bank pays the fee.

Words to know

Ijarah — a contract for hiring, either of a person's services or the use of an asset, for an agreed payment.
Ajir — the person or firm hired to do the work.
Musta'jir — the employer; the one who hires and pays.
Ujrah — the wage or fee paid for the work.
Halal — permissible under Islamic rules.

Source

AAOIFI Shariah Standard No. 34 — https://www.ijmar.org/v11n1/24-004.html
Ijarah terminology reference — https://wikieducator.org/Principles_of_Islamic_banking_and_finance/PIBF201/Fixed_income_Islamic_modes_of_finance/Ijarah