Iranian labor law

Iranian labor law describes the rules of employment in

The basic sources of Iranian labor law are,[3]

• The Constitutions and its amendments (1906, 1907, and 1979)
• Civil laws "Ghanon Madani"
• Council of Ministers and Ministry of Labor decrees and procedures (Aein Nameh)
• Judiciary verdicts and cases
• Collective bargaining contracts and agreement
• Common practices and occupational norms
• International Labour Organization (ILO)
• ILO Conventions
• ILO Recommendations
• Other international declarations and agreement

History

The first constitution of Iran, passed in 1906, granted basic rights to the people of

In 1936, the cabinet issued regulations on minimum hygiene conditions in factories,[7] which was the first attempt to regulate employer-employee relationships. On May 18, 1946, the Council of Ministers ^[7] passed the labor bill. The first labor minister was appointed that same year ^[8] which improved the systematization of labor relations and personnel management. Yet, the working conditions, despite the legislation, were entirely at the whim of enterprise owners because the laws were not enforced and the Labor Ministry was weak. Employers could do virtually as they wished with no consequences and they barred formation of labor unions.^[9]

In 1951, a committee was appointed by the ministry of labor to translate various countries labor laws and the international

A new era of labor legislation, shaped after the new Islamic constitution, recognized progress had occurred following the establishment of the first Islamic Workers Council or (Shora-e Islami Karagaran). This provided workers rights similar to those of European workers, but under the umbrella of Islam.

During the first two decades of the revolution, the Workers Council influenced many of the personnel management tasks including recruitments, selection, promotion, job evaluation, salary structure, productivity bonus, health and safety and many more tasks (even providing employees with a daily milk and food ration). Added to these were establishing and operating factory grocery stores and housing cooperatives. Ironically, many of these tasks became official ink of the 1990 Islamic Republic of Iran Labor law.

The end of the Iran-Iraq war marked the start of economic liberation, as well as, a gain of the reformists in

The first dent in the labor law came about with the introduction of temporary employment contracts that allowed employers to hire employees under a one-year contract with the ability to be reissued year after year after a settlement of the annual "end of services" benefit. The Ministry of Labor issued a communiqué in March 1994 stating that employment under the "fixed terms" contracts was legal.^[13]

The government created an ambitious development plan aimed at liberalizing and boosting the economy overnight. The plan contributed in creating a passive labor law. Then, in 2004, the reformists in the Sixth Parliament and the conservatives in the Guardian Council succeeded in reaching an agreement to amend the Labor Law to exempt firms with five or fewer workers from some of its provisions. This provided small entrepreneurs with more freedom in their employment practices.^[14]

Finally, in 2006, in response to growing pressures from the private sector for labor law reform, the Ministry of Labor drafted an amendment to deconstruct the "free market". A new law is under consideration based on these amendments.^[15]

Labor law

There is a minimum national

To have a valid contract concluded under the Law, the following provisions must be included:^[19]

• 1. Type of Work, vocation or duty that must be undertaken by the worker;
• 2. Basic compensation and supplements thereto;
• 3. Working hours, holidays and leaves;
• 4. Place of performance of duties;
• 5. Probationary period, if any;
• 6. Date of conclusion of contract;
• 7. Duration of employment; and
• 8. Any other terms and conditions required according to nature of employment.

The employer may require the employee to be subject to a probationary period. However, the probation time may not exceed one month for unskilled workers and three months for skilled and professional workers. During the probation period, either party may immediately terminate the employment relationship without cause or payment of severance pay. The only caveat being that if the employer terminates the relationship, he must pay the employee for the entire duration of the probation period.

Suspension of employment contract

The fact that the employment contract can be suspended by an employee under certain conditions presents yet another challenge to employers. What this allows is suspension of the employment contract under the following conditions:^[19]

• 1. The period of military service (active, contingency and reserve), as well as voluntary enlistment during conflicts. This period shall be considered part of the employee's service record at place of employment;
• 2. The closure of a workshop or parts thereof due to force majeure;
• 3. Educational leave for up to four years; and
• 4. The period of detention that does not lead to conviction;

Once the conditions giving rise to the suspension of the contract are removed, the employer must allow for return of the employee to work. If the position is filled or eliminated, the employer is obligated to provide a similar position for the employee. Failure to do the above is considered wrongful discharge and subject to legal action.

Termination of employment contract

The Law allows for termination of the employment contract only under the following instances:^[19]

• 1. Death of employee;
• 2. Retirement of employee;
• 3. Total disability of employee;
• 4. Expiration of the duration of the employment contract;
• 5. Conclusion of work in task specific contracts; and
• 6. Resignation of the employee.

The employer is bound to pay benefits under all of the above scenarios according to the years of service.

Dismissal of an employee

An employee may only be dismissed upon approval of the Islamic Labor Council or the Labor Discretionary Board. Grounds for dismissal include an employee's neglect in carrying out his/her duties or violation of disciplinary by-laws of the employer. The employer must have provided written prior notice of the employee's violations. If the board is not convinced that the employee's dismissal is justified, the employer must reinstate the employee. Once an employee is dismissed, the employer is obligated to provide the legal severance package.^[19]

Severance and termination benefits

The Law mandates the following compensation for terminated, disabled and suspended employee:^[19]

• 1. Suspended Employee – Where an employee is suspended without cause the employer must reinstate the employee and pay for all damages and compensation resulted from the wrongful suspension;
• 2. Terminated Employee – An employer is under legal obligation to provide thirty (30) days salary for every year of service for employees made redundant or retired;
• 3. Disabled Employee – The employer must pay 30 days salary for every year of service. Moreover, if disability of an employee is due to working conditions, the employer must pay 60 days salary for every year of employee's service period.

Working hours and overtime

The workweek in Iran is based on a 44-hour week. Typically, employees work from Saturday to Wednesday (8 hours per day) and half a day on Thursday (4 hours). Any hours worked beyond these will entitle the employee to overtime. The Law mandates a payment of 40% above the hourly wage to employees for any accrued overtime. The employee must consent to overtime work.^[19]

Holidays and leave

Employees are entitled to leave on all official state holidays (approximately 22 days a year) and Fridays. Any employee working during these holidays will be entitled to overtime pay. Additionally, employees are entitled to one-month holiday per annum. The annual leave for those employees engaged in hard and hazardous employment shall be five weeks per annum. Employees are entitled to save up to 9 days of their annual leave.^[19]

In case of termination, disability or redundancies, employees must be compensated for any accrued leave. Finally, employees are entitled to 3 days of paid vacation for marriage or death of a spouse, father, mother or child.^[19]

Maternity leave

Women employees are entitled to 90 days of maternity leave. The employee's salary during maternity leave will be paid according to the provisions of the Social Security Act Archived 2011-09-03 at the Wayback Machine. Maternity leave must be considered part of an employee's service record. Employers must provide returning employees with the same position.^[19]

Employment of foreign nationals

The Law forbids employment of foreign nationals without a proper work permit. Diplomats, United Nations employees and foreign press reporters are exempt from this requirement. A work permit to a foreign national will be issued only if the following conditions are met:^[19]

• 1. Lack of expertise among Iranian nationals;
• 2. The foreign national being qualified for the position; and
• 3. The expertise of the foreign national will be used for training of, and later replacement by, Iranian individuals.

Work permits will be issued, renewed or extended for a maximum period of one year. Moreover, no exit visa will be granted to the foreign national unless the national has paid all due taxes, duties, etc.^[19] (More info: Employment of Foreign Nationals in Iran)

Exemption

A new law provides that workshops with less than five employees will not be subject to the labor laws.^[19]

Health care

The

Iran has a comprehensive social protection system with some 28 social insurance, social assistance, and disaster relief programs benefiting large segments of the population. These programs include training and job-search assistance, health and unemployment insurance, disability, old-age and survivorship pensions, and in kind- or in-kind transfers including subsidies (e.g., housing, food, energy), rehabilitation and other social services (e.g. long-term care services for the elderly), and even marriage and burial assistance.^[19]

Despite significant achievements in human development and poverty reduction, serious challenges to growth call for reform. While labor-market pressures continue to increase because of demographic dynamics and increased participation of women in the labor force, Iran’s economy is still unable to generate enough needed jobs to absorb the new flows into the labor market and at the same time reduce unemployment extensively.

In addition to income tax, employers are required to contribute to the State