Shariah Law: a matter of belief

With increasing numbers of Muslims employed in the UK is it time for employers to pay more than lip service to Islamic law? Georgina Fuller reports.

The furore after Dr Rowan Williams, Archbishop of Canterbury, suggested earlier this year that integrating some aspects of Shariah law into the UK legal system might not be a bad idea showed what a highly contentious topic the Muslim law is. The archbishop said we had to face up to the fact that some UK citizens did not relate to the current legal system.

Mohammed Farrukh Raza, managing director of Islamic Finance Advisory & Assurance Services (IFAAS UK), which advises companies on how to become Shariah-compliant, says there is still a lot of confusion about the Muslim faith. It’s up to employers to clear the confusion, he says.

“Employers need to learn exactly what Shariah law is and how it applies to them. But the irony is, that lots of Muslims don’t understand it particularly well,” he says.

With an estimated 1.6 million Muslims living and working in the UK and an increasing Muslim population, Shariah is set to become a pressing issue for employers.

Law origination

The law originates from a combination of sources including the Muslim holy book the Qur’an , the Hadith (sayings and conduct of the prophet Mohammad) and fatwas – the teachings of Islamic scholars.

Raza says Shariah has a lot in common with UK employment legislation although – unsurprisingly – there are some fundamental differences. The prime concerns for employers centre around the fact that Muslims are required to pray five times a day, have the right to refuse to handle alcohol and pork products and cannot participate in any financial incentives (such as bonus schemes and share options) or pension schemes that are not Shariah-compliant. Dress code could also be an issue, with some Muslim women preferring to wear the hijab (headscarf) at all times.

Paul Griffin, employment partner at Norton Rose, says the law firm has started running seminars on Shariah as it is an increasing concern for organisations. “We’re helping more businesses and advising them on how far they should go in complying with Shariah law in the UK,” he says.

“If, for example, you offer a discretionary bonus scheme, you can’t earn or charge interest under Shariah. This can make finance a tricky area for firms to manage. Employers have also got to be aware of loans and share options as Muslim employees can’t be owed something in financial terms.”

Occupational pension schemes could also be a problem if the scheme is investing in a company that sells alcohol or the employer is offering a final-salary pension that may invest in non-Halal (not compliant with Muslim law) companies.

Raza also believes that compensation and benefits are going to become an increasingly hot topic for HR professionals over the coming years, especially in the City. “In terms of benefits, most of the funds employers invest in for share options, pension schemes, bonuses etc are interest-only – which is against Shariah law – so lots of finance houses are turning to Shariah-compliant products,” he says.

“It’s unacceptable for Muslim employees to take part in an interest-based bonus scheme so employees have to miss out – which wouldn’t be fair.”

Local level

It’s difficult to assess the scale of Shariah-compliant investing and banking in the UK. City of London bankers and investment houses are keen to tap into the huge wealth generated by oil-rich Middle East companies, but are doing so at a local level in the Gulf rather than offering Shariah-compliant products in the UK.

Earlier this month, Shariah-compliant Gatehouse Bank, a subsidiary of a Kuwaiti investment company, was licensed to operate as a wholesale bank in the UK. Chief executive officer David Testa says London is well placed to become the centre of choice in the West for Islamic finance. “Demand for Shariah-compliant products is increasing at an unprecedented rate,” he says.

According to LloydsTSB, the global Islamic financial services market is worth about $480bn and Testa says it’s rising at 15% to 20% a year.

But, according to business publication Euromoney, few big City players have launched Shariah-compliant offerings and most investing in funds is done at the local level in the Gulf states. “We see Islamic product as an area where local [ie, Gulf] banks have more interest,” says Nick Tolchard, spokesman at City investment house Invesco, in a recent issue of Euromoney.

At a local UK level, however, the main concern for employers is how to deal with individual Muslims’ religion-related concerns. Raza says every Muslim has their own level of observance when it comes to their religion and how much they choose to respect Shariah law will vary.

“Serving alcohol is forbidden under Shariah law but if a Muslim employee decides to take a job where they’re handling alcohol then that’s their choice. If their job description changes and serving alcohol wasn’t in the original terms and conditions it could be a problem though,” he says.

Sensitive area

Griffin says employers tend to worry about complying with religious discrimination law, especially after several recent cases highlighted what a sensitive area this can be. Islington Council, for example, faces an unlimited payout for religious discrimination after being found guilty of bullying and threatening to fire a Christian marriage registrar who refused to conduct same-sex civil partnerships. Lillian Ladele said she was treated like a “pariah” and the council has shown no respect for her Christian beliefs.

Griffin says employers have to be practical and flexible when it comes to accommodating different religious beliefs but that they also need to spell out to employees what is and isn’t acceptable. “Employees who are outspoken about their religious views can open the employer up to discrimination claims as it could constitute harassment,” he says. Public sector employees, in particular, must abide by the Race Relations Act and reflect the communities they serve.

Kaushar Tai is a diversity consultant and director of Education Islam, which runs training courses for employers about the Muslim faith. He says: “We’ve had about 10,500 public sector workers on our courses in the past four years. It doesn’t cost much to learn about Shariah but it can have major benefits for organisations.”

Improved employee engagement and better retention levels are just some of the advantages of learning about the Muslim faith, he says. He adds that educating employees about Islam is also important as many people have negative perceptions about Shariah law, partly triggered by the terror attacks of 11 September 2001.

He believes that organisations have a legislative and moral duty to learn about Shariah law. “Everyone knows that diversity is good for business,” he says, “and learning about the Muslim faith is part of that. Employers have got to find the right balance between Shariah requirements, UK employment laws, reputation and employee motivation.”

Raza says that Shariah is based on fairness and that, although, in his view, employers have certain obligations to Muslim employees – such as providing prayer rooms – the religious obligation is on the employee rather than the organisation.

“Shariah law is based on fairness but it has to be fair to all, regardless of whether you are a Muslim or non-Muslim,” he says. “The time that Muslim employees can legally require to take off to pray mystifies employers but it’s simple. Muslims are required to pray five times a day and a prayer typically lasts between five to 10 minutes. So normally a Muslim employee would expect to take 25-50 minutes out during the day. Some employees spend the same amount of time taking cigarette breaks.”

Agreements in place

Affected employees should have agreements with the employer and agree to do any extra minutes as overtime, if necessary.

“If, for example, you have 200 Muslim employees and they’re all expecting to take 20 minutes’ working time to pray each day, it could be a problem in terms of lost productivity, but if the company had only one or two Muslim employees, it shouldn’t be an issue,” Raza says.

Tai believes that Muslims should be doing more to promote their faith. “Muslim people are guilty of keeping the Islamic faith to ourselves. We shouldn’t keep the mosque doors closed, we should open them to all,” he says.

Raza agrees and believes that organisations need to take a more common-sense approach to Shariah law and ensure it fits in with UK employment legislation.

“Shariah doesn’t favour a Muslim over a non-Muslim. It’s merit-based. You can’t have a job advert that specifically states a company wants a Muslim employee under Shariah law, for example, but the same would apply under equal opportunities legislation,” he says.

Facts about Islam

  • The degree of religious practice varies from person to person.
  • Consumption of pork, alcohol or any intoxicants and practices of cheating, lying, backbiting, bribery, gambling, prostitution, pornography, paedophilia and homosexuality are strictly forbidden.
  • Family is at the heart of the Muslim social life.
  • Intimate relationships without marriage are forbidden and mixing non-related males and females is discouraged.
  • Men and women are supposed to keep their bodies covered and keep their gaze low.
  • Any act causing harm to oneself, people and their property, state and environment is forbidden and subject to severe punishments decreed through legal processes.

Considerations for employers

  • Equal opportunities
  • Discrimination
  • Competence and performance
  • Sexual orientation

Pensions

  • Nature of funds
  • Performance of funds
  • Differentiation between Muslim and non-Muslim employees

Share options

  • Price
  • Conditions
  • Redemption
  • Ownership

Policies to be documented in line with Shariah

  • Dress code
  • Prayer facilities
  • Religious holidays
  • Consumption of alcohol

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