Fatwa: # 16570
Category: Business Matters
Country: India
Date: 13th April 2008

Title

Outsourcing work in a Company

Question

A) In my company we outsource a lot of work to other companies. Will it be OK, if I as an employee create a new company and take some of this outsourced work while at the same time I remain in employment with my company? (I would like to point that me creating a new company will not effect my work with the company I am employed with as I shall hire people to do the outsourced work in the company I create and it will all together act as a seperate entity from myself)

B) In some cases, I am directly responsible to outsource work. Though I have intended not allow any foul allocation even if its my company, but I have a feeling that this might not be permissible in Islam. can you clarify please?

C) Would it be OK to outsource the work I take to some other companies further, even though they might have been my competitor in the bidding stages? (I ask this as in the begining perhaps instantaneously we wont have enough manpower to handle large projects incase we get them)

D) Another case that I am thinking of is instead of creating a new company, I bid/take the outsourced work under the banner of the company of my friend. However, my friend says that if I do decide to use his company's name and office, then I have to pay him 15% of the profit I make and incase of a loss I dont pay him anything. Will it be halaal if I agree to this in exchange for using his office facilities and company name?

Answer

In the name of Allah, Most Gracious, Most Merciful  

Assalaamu `alaykum waRahmatullahi Wabarakatuh

1. You are working for a company which acts as an agent between two companies and receives payment for finding the right company to accept the outsourced work. As an employee of the company, you represent the company and not yourself. If you wish to create a new business which will accept the outsourced work, it will be permissible. It will be considered that the company of your employment is in contract with your personal business. You should inform your company of employment of your intentions of starting such a business so they may have an option to work with your business or another competitor.

Al-Durr al-Mukhtar (6/69) H.M. Saeed Company

( والثاني ) وهو الأجير ( الخاص ) ويسمى أجير وحد ( وهو من يعمل لواحد عملا مؤقتا بالتخصيص ويستحق الأجر بتسليم نفسه في المدة وإن لم يعمل كمن استؤجر شهرا للخدمة أو ) شهرا ( لرعي الغنم ) المسمى بأجر مسمى بخلاف ما لو آجر المدة بأن استأجره للرعي شهرا حيث يكون مشتركا إلا إذا شرط أن لا يخدم غيره ولا يرعى لغيره فيكون خاصا وتحقيقه في الدرر وليس للخاص أن يعمل لغيره ، ولو عمل نقص من أجرته بقدر ما عمل فتاوى النوازل

 

2. It will be permissible for your business to outsource the work to some other company. In this case, your personal business will be acting as an agent of an agent. However, the company that outsourced the work to you should be aware that your business will not be the one fulfilling the work, but instead the work will be handed to another company.

3. It will not be permissible for you to use your friend’s company’s name and assume it to be yours. This would result as a form of fraud as others will assume it is your friend’s company that is being involved.

And Allah knows best

Wassalam

Ml. Ehzaz Ajmeri,
Student Darul Iftaa

Checked and Approved by:

Mufti Ebrahim Desai
Darul Iftaa

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