Seri Begawan, Brunei Darussalam, from 1–7 Muharram 1414 AH (21–27 June 1993 CE), and after reviewing the papers submitted to the Academy on the subject of “Currency Issues” and listening to the deliberations that took place, the Academy resolved as follows:
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The labour regulations, by-laws, and contractual arrangements that specify wages in cash may lawfully include a cost-of-living adjustment clause, provided that no harm is thereby caused to the overall economy.
By “cost-of-living adjustment” is meant the periodic revision of wages in accordance with changes in the price level, as determined by the recognised body of expertise. The purpose of this revision is to shield employees’ cash wages from the loss of purchasing power resulting from monetary inflation and the consequent continuous rise in the general prices of goods and services. The default ruling concerning stipulations is permissibility, except a stipulation that renders the unlawful lawful or the lawful unlawful.
However, if the wages accumulate and become a debt, the rulings on debts set forth in Resolution No. (4/D5) shall apply.
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On the day of settlement—though not before—it is permissible for the creditor and the debtor to agree to discharge the debt in a currency other than the one in which the debt was originally contracted, provided the conversion is made at that day’s exchange rate. The same applies to a debt payable in instalments in a given currency: on the due date of any instalment they may agree to pay the entire amount in another currency at its exchange rate on that day.
In all cases, nothing of the amount exchanged may remain outstanding in the debtor’s liability, and Resolution No. (55/1/D6) concerning taking possession must be observed.