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, and 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.
