Iranian labour law describes the rules of employment in Iran. As a developing country, Iran is considerably behind many international standards. It has failed to ratify the two basic onventions of the International Labour Organization on freedom of association and collective bargaining, and on the abolition of child labour.
The basic sources of Iranian labour law are,Araghi 2002 p. 84
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 Persia through articles eight to twenty five, establishing equality before the law for everyone, and the right to form and join societies (anjumans) and associations (ijtimá'át).(Shuster,1987, p. 346) The Parliament (Majlis) and the Senate waited 16 years to pass the Civic Servants Employment Act of 1922. It gave protection to labourers and Civic servants. In 1923, the governor of Sistan and Baluchestan ordered a decree in nine articles to protect carpet makers’ rights, including working hours, leaves, and minimum age. It was the first national document of labour rights.(Rasaeinia, 2000 p. 95) In 1928, Parliament passed the Civil Law (Ghanon-e Madanei) which addressed employment contracts. This law divides the employer and employee relations into two categories by benchmarking the French Law. Independent contractors (e.g. carpenters, doctors, lawyers, and plumbers) who control their own work are accountable for their profits and losses. Next, servants who are being paid by an employer to perform specific tasks, but do not have full control of their work, and act upon the employer's instructions and orders.(Katozian, 2005)
In 1936, the cabinet issued regulations on minimum hygiene conditions in factories,(Ladjevardi, 1985 p. 61) which was the first attempt to regulate employer-employee relationships. On 18 May 1946, the Council of Ministers passed the labour bill. The first labour minister was appointed that same year,(Ladjevardi, 1985 p. 190) which improved the systematization of labour 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 the formation of labour unions.(Ladjevardi, 1985 p. 196)
In 1951, a committee was appointed by the Ministry of Labour to translate various countries' labour laws and the international ILO Conventions into Persian in order to do a comparative study and draft a labour law. This effort did not lead to the proposal of a labour law. Then, from 1952 to 1957, various committees established by the ministry of labour and foreign consultants including a Belgian consultant and general secretary of the Middle East labour institute were invited to finalize the draft of labour law, which finally in 1959 voted and passed by the Parliament "Majils". This law was practised until 1990.(Mozafari, 2002 p. 13)
The next phase of labour legislation began with the Shah's "White Revolution" "Enghlab Sefied" in 1962. It provided generous welfare and social improvements, such as profit sharing, employee stock ownership plans, company housing, minimum wage, and an improved Social Security Act.(Ladjevardi, 1985 p. 240-242) All were paid for with revenue from high oil prices. Nevertheless, many private sector owners opposed the new initiatives that infringed on their power. New personnel practices were introduced, including payroll administration with time management, job descriptions, job classifications, evaluations, and organizational hierarchies, mainly in large companies and government-run industries. In the 1960s, progressive private sector entrepreneurs, such as the Ladjevardi family in the Behshar Industrial group, introduced job classifications, personnel policies and procedures, and automated payroll systems following the recommendations of the Iranian National Oil Company’s foreign advisors.
After the revolution
Following the Islamic revolution and the new constitution, this enchanted many with idealistic promises. The new constitution addressed work and labour topics in eleven areas through various articles summarized as the following:Rasaeinia (2000)
Awards freedom of career and occupation Commands for establishment of working hours Elimination of compulsory work Prohibits abuse and exploitation Acknowledges ownership and right to earned wages for worker Prohibits disturbance of business by others Pledges equal opportunity for everyone by providing necessity and amenities Pledges to make available equipment and tools to those able to work if they lack the capability to acquire required equipments and tools Pledges to grant interest free loans for establishment of cooperative institutes and companies Pledges to provide health and hygiene services for diverse age groups Pledges to aid the underprivileged and victims of accident
A new era of labour legislation, shaped after the new Islamic constitution, recognized that 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 recruitment, 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 for the reformists in Parliament. In this period, a new private sector emerged, challenging the utopian labour laws and regulations. With this, the 1990 labour law was pro-labour and expensive to administer. Management had to seat labour representatives on the company's board of directors, which was unprecedented in the traditional management style of the Iranian private sector, in addition to enforcing many welfare and mandatory benefits.
The first dent in the labour 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.(IRI-Ministry of Labor)
The government created an ambitious development plan aimed at liberalizing and boosting the economy overnight. The plan contributed in creating a passive labour 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.(Salehi-Isfahani, 2005)
Finally, in 2006, in response to growing pressures from the private sector for labour law reform, the Ministry of Labor drafted an amendment to deconstruct the "free market". A new law is under consideration based on these amendments.(Maljoo, 2007)
Labour law
There is a minimum national wage applicable to each sector of activity fixed by the Supreme Labor Council, which is revised annually. In 2010, the minimum wage, determined by the Supreme Labor Council, was about US$303 per month (US$3,636 per year). Membership in the social security system for all employees is compulsory. The national poverty line for Tehran in the year ending 20 March 2008 was $9,612 per year, and the national average was $4,932.
Although Iranian workers have, in theory, a right to form labour unions, there is, in actuality, no union system in the country. Workers are represented ostensibly by the Workers' House, a state-sponsored institution that nevertheless attempts to challenge some state policies. Guild unions operate locally in most areas but are limited largely to issuing credentials and licenses. The right of workers to strike is generally not respected by the state, and since 1979, strikes have often been met by police action.
The comprehensive Labour Law covers all labour relations in Iran, including the hiring of local and foreign staff. The Labor Law provides a very broad and inclusive definition of the individuals it covers, and written, oral, temporary, and indefinite employment contracts are all recognized.
The Iranian Labor Law is very employee-friendly and makes it extremely difficult to lay off staff. Employing personnel on consecutive six-month contracts is illegal, as is dismissing staff without proof of a serious offence. Labour disputes are settled by a special labour council, which usually rules in favour of the employee.
The Labor Law provides the minimum standards an employer must adhere to when forming an employment relationship. The minimum age for workers in Iran is 15 years, but large sectors of the economy (including small businesses, agricultural concerns, and family-owned enterprises) are exempted.
Provisions of employment contract
To have a valid contract concluded under the Law, the following provisions must be included:
Type of Work, vocation or duty that must be undertaken by the worker; Basic compensation and supplements thereto; Working hours, holidays and leaves; Place of performance of duties; Probationary period, if any; Date of conclusion of contract; Duration of employment; and 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:
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; The closure of a workshop or parts thereof due to force majeure; Educational leave for up to four years; and 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:
Death of employee; Retirement of employee; Total disability of employee;