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Recruitment Company Referral Commissions

Question

Many corporate companies use the services of a recruitment company to find staff. The corporate company provides the specifications of the vacancy to the recruitment company. The recruitment company then suggests candidates that it knows. If it does not have a candidate that matches the specifications it advertises the position to get candidates. If the corporate company is happy with the candidate provided it pays the recruitment company. As payment for this service, the recruitment company is normally paid a percentage (eg. 10%) of the yearly salary of the person who is then employed by the corporate company. Is this permissible? Also, if the salary that the candidate will be paid is not known upfront, will it be permissible?

Answer

Our understanding of the enquired scenario is that a corporate company hires a recruit company, who suggests suitable candidates for the job. Once the candidate has been hired as an employee by the corporate company, the recruitment company is given its payment for the rendered service. A fixed percentage (for example 10%) of the hired employee’s yearly salary is given to the recruitment company as a once-off payment for this service. If this is the method, then it will be permissible as this will be regarded as a payment of a commission agent. 

Also, if the salary of the candidate/employee in unknown upfront, however, the percentage that the recruitment company will receive is fixed, it will also be permissible.

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.

References

(رد المحتار) ج6 ص47

(رد المحتار) ج6 ص63

(اسلام اور جدید معاشی مسائل ) ج ۴ ص ۱۲۳

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