We are a trade union association. We have established a fund to cover the expenses related to the death of employees. The aim is to pay the family of the deceased beneficiary whatever amounts they need in relation to the expenses of the burial and condolence period. The fund is based on a monthly contributions paid by the employees. This is in addition to the fact that the association pays (1500 JDs) to the heirs or the person specified by the participant in the fund`s subscription form. Is this valid? Does this trade union association have the right to do whatever it sees fit with the amount that remains from the above sum, of course, in case the expenses were less than (1500 JDs)?
Answer:
All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
The form mentioned in the above question is cooperative insurance, which is permissible in Sharia, and even recommended because it is all about helping in piety and righteousness. The evidence on this is that Allah the Almighty says {What means}: " Help ye one another in righteousness and piety, but help ye not one another in sin and rancour: fear Allah. for Allah is strict in punishment." {Al-Mai`dah, 2}. Moreover, Abu Musa narrated: The Prophet (PBUH) said, "When the people of Ash`ari tribe ran short of food during the holy battles, or the food of their families in Medina ran short, they would collect all their remaining food in one sheet and then distribute it among themselves equally by measuring it with a bowl. So, these people are from me, and I am from them." {Related by Bukhari & Muslim}.
It must be made clear to the beneficiary that what he pays to this fund is a donation and an act of charity, so he must have this intention in mind upon making that payment. Also, the payment (1500 JDs) made by the fund is a donation as well. However, whatever amount remains from the latter sum must be given for charity and participants must be made aware of that and the instructions of the fund as well. This is to prevent disagreement and dispute, and this is how all funds of cooperative insurance, deemed permissible by the Islamic Fiqh Academy of the Organization of the Islamic Conference, should be. If this is the case, then there is no sin in subscribing to this fund.
In addition, it is worth pointing out some violations of the provisions of Sharia embodied in the fact that the family of the deceased spends huge amounts of money on food offered to people coming to pay their condolences. This manner of wasting and boasting isn`t permissible and must be avoided. Kindly refer to Fatwa No.(559). And Allah the Almighty knows best.