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Iran labor law- Part 1

  2/11/2014
Summary:Labour Code. Dated 20 November 1990. (Rouznameh Rasmi, 17 February 1991, No. 13387, pp. 1­14.)

CHAPTER I. GENERAL DEFINITIONS AND PRINCIPLES

CHAPTER I. GENERAL DEFINITIONS AND PRINCIPLES

Sec. 1. All employers and workers, as well as workplaces and production, industrial, services and agricultural establishments are required to comply with the provisions of this Code.

Sec. 2. For the purposes of this Code, the term "worker" means any person who works in any capacity at the request of an employer in return for remuneration. The term "remuneration" includes wages, salaries, dividends and other allowances.

Sec. 3. The term "employer" means any legal or natural person at whose request and for whom a worker performs work in return for remuneration. Directors, managers and, generally, any person entrusted with the duty of running a workplace shall be regarded as the employer's representatives; and the employer shall be responsible for carrying out all obligations to the workers undertaken by such representatives. Where an employer's representative takes any initiative which is outside the scope of his duties and which is not acceptable to the employer, such representative shall be responsible to the employer.

Sec. 4. The term "workplace" means any place where a worker performs work at the request of an employer or his representative, including industrial and agricultural establishments, mining enterprises, construction projects, transport, freight, or passenger enterprises, commercial establishments and productions units, or any other place open to the public, and all ancillary premises which, having regard to the nature of the work, belong to the workplace such as prayer­rooms, dining­halls, cooperatives, nurseries, kindergartens, dispensaries, bathrooms, vocational schools, reading rooms, literacy and other educational centres as well as places allocated to the Islamic Councils, societies, workers' mobilisation associations, gymnasiums or transport vehicles.

Sec. 5. All workers, employers and their representatives, trainees, apprentices and workplaces shall be subject to the provisions of this Code.

Sec. 6. Under sections 43(4), 2(6) and 19, 20 and 28 of the Constitution of the Islamic Republic of Iran, it is prohibited to force a person to perform work against his will or to exploit others; Iranians, whatever their tribe or ethnic group, enjoy the same rights; skin colour, race, language and the like do not constitute any privilege or distinction; all individuals, whether men or women, are entitled to the same protection of the law; and every person has the right to freely choose an occupation, provided that such occupation is not inconsistent with Islamic principles or the public interests and does not violate other peoples' rights.

CHAPTER II. EMPLOYMENT CONTRACT

Division I. Definition of employment contract and the basic conditions governing its conclusion

Sec. 7. The expression "employment contract" means a written or an oral agreement whereby a worker undertakes, in return for remuneration, to perform work for an employer for a definite or an indefinite period.

    Note 1. The maximum duration of a definite period in respect of types of work which are not permanent by nature shall be determined by the Ministry of Labour and Social Affairs and approved by the Council of Ministers.

    Note 2. Where no period is specified in a contract for work which is permanent by nature, the contract shall be deemed to be permanent.

Sec. 8. No stipulation in an employment contract shall be binding if it is less favourable to the worker than the provisions of this Code.

Sec. 9. The validity of an employment contract shall be subject to fulfilment of the following conditions at the time of its conclusion:

  • (a)the subject­matter of the contract must be lawful;
  • (b)the subject­matter of the contract must be specified clearly and accurately;
  • (c) the parties should not be barred because of religion or law from taking possession of property or from performing work as specified in the contract.
  • Note. All employment contracts are considered to be genuine unless their invalidity is proved by the appropriate authorities.

Sec. 10. In addition to the particulars in respect of both parties, an employment contract shall specify the following information:

  • (a)the type of work or occupation in which the worker will be engaged or the duties that he must discharge;
  • (b)the basic salary or wage and any supplements thereto;
  • (c) working hours, holidays and leave;
  • (d)the workplace;
  • (e)the date of signing of the contract;
  • (f)the duration of the contract, if it is for a fixed term;
  • (g)any other matters required by custom and common practice in relation to the job and the locality concerned.
  • Note. When an employment contract is concluded in writing, it shall be drawn up in four copies, the first copy being deposited with the Labour Office, the second retained by the worker, the third by the employer, and the fourth by the Islamic Labour Council. In workplaces without an Islamic Council, the fourth copy shall be given to the worker's representative.

Sec. 11. The parties may agree on a probationary period by mutual consent. During this period, either party shall be entitled to terminate the employment relationship without prior notice and without being obliged to pay compensation. Should the employment relationship be terminated by the employer, the latter shall be required to pay remuneration for the whole probationary period; if the employment relationship is terminated by the worker, the latter shall be entitled only to remuneration for the period during which work was performed.

Note. The probationary period shall be specified in the employment contract. The maximum duration of probation shall be one month for unskilled and semi­skilled workers and three months for skilled and specialised workers.

Sec. 12. Any legal change in the ownership of a workplace, such as a sale or transfer of any kind, a change of production, a merger with another establishment, nationalisation, death of the owner and the like, shall not affect the contractual relationships of workers whose contracts have been finalised, and the new employer shall be substituted for the former employer in respect of the obligations and rights of the latter.

Sec. 13. In contracts concluded for piece­work there shall be included an undertaking on the part of the contractor to apply all the provisions of this Act with regard to his personnel.

    Note 1. Any amount due to a worker shall be considered a privileged debt, and the employer shall be required to settle any contractor's debts to workers, in accordance with the decision of the judicial authorities, out of the sums due to the contractor, including any sums deposited as a guarantee for the performance of the work.

    Note 2. Where the employer concludes a contract in breach of the above provision or where he settles accounts before the expiry of 45 days from the date of provisional delivery, he shall be obliged to settle any debts owed by the contractor to the workers.

Division II. Suspension of employment contract

Sec. 14. Where, in the circumstances specified in the following sections, one of the parties temporarily ceases to fulfil his obligations, the employment contract shall be suspended and resumed after the said circumstances cease to exist, taking into account the workers' service record (for the purposes of retirement and wage increments).

    Note. A worker's period of military service (including emergency or reserve duty) or voluntary participation in war shall be considered as part of his service record.

Sec. 15. Where an entire workplace or part thereof must cease operating because of force majeure or the occurrence of an unforeseeable event beyond the control of either party, and it becomes temporarily impossible for workers and their employer to fulfil their obligations, the employment contracts of the workers concerned shall be suspended. Determination of such cases shall be at the discretion of the Ministry of Labour and Social Affairs.

Sec. 16. The employment contract of a worker who, in accordance with the provisions of this Act, qualifies for study leave or any other form of unpaid leave, shall be suspended during such leave for a period of up to two years.

    Note. Study leave can be extended for a further period of two years.

Sec. 17. Where a worker is arrested and held in detention but not convicted, his employment contract shall be suspended for the duration of his detention. The worker shall resume his duties upon release.

Sec. 18. Where a worker is arrested as a result of a complaint lodged by his employer, but not found guilty by the authorities appropriate for resolving the dispute, any period of detention shall be considered part of the worker's service record, and the employer shall pay him his wage and fringe benefits for the period of detention in addition to any amount due to the worker pursuant to a judicial decision to compensate for the loss and prejudice sustained.

    Note. As long as the worker's case is pending and the appropriate authorities have made no decision in his regard, the employer shall be obliged to pay on account at least 50 per cent of the worker's monthly wage to his family in order to meet its needs.

Sec. 19. During a worker's period of military service, his contract of employment shall be deemed suspended, provided that he shall return to his previous job no later than two months after the termination of his military service, and that he shall be engaged in a similar job if his previous post has been cancelled.

Sec. 20. Where, in the cases provided for in sections 15, 16, 17 and 19, the employer refuses to reinstate the worker after the period of suspension, such refusal shall constitute unlawful dismissal (in the absence of a valid reason), and the worker shall be entitled to apply to the Board of Inquiry within 30 days. Where the employer is unable to prove that his refusal to reinstate the worker is based on just grounds, he shall, at the discretion of the said Board, be obliged to reinstate the worker in his job and to pay him his wages from the date on which he reported to the workplace. Where the employer can establish just grounds, he shall be required to pay the worker an amount equal to 45 days' wages, at his most recent rate of pay, for each year of service completed by the worker.

    Note. Where, within 30 days at the most of the termination of suspension, a worker fails, without a valid reason, to report to his employer for work, or after having referred to his employer and been denied reinstatement, he fails to apply to the Board of Inquiry, he shall be deemed to have resigned from his position, in which case the said worker shall be entitled to a length­of­service allowance equivalent to his last monthly wage for each year of service completed.

Division III. Termination of employment contract

Sec. 21. An employment contract shall be terminated by any one of the following events:

  • (a)the worker's death;
  • (b)the worker's retirement;
  • (c) the worker's total disability;
  • (d)the expiry of the period specified in an employment contract concluded for a fixed term and its non­renewal, either explicit or implicit;
  • (e)the completion of work under a contract concluded for a specified assignment;
  • (f)the worker's resignation.
  • Note. Any worker who resigns shall be required to provide his employer with written notice of his registration, and to continue to work for one month. If he informs his employer in writing that he has changed his mind in this regard within 15 days, his resignation shall be deemed null and void. A worker shall submit a copy of his notice of resignation or withdrawal thereof to the Islamic Council of the workplace, to the Guild Society or to the workers' representative.

Sec. 22. On termination of employment, all amounts due to a worker under his employment contract for the given employment period, shall be paid to the worker or, in the event of his death, to his heirs­at­law.

    Note. Pending the designation of heirs­at­law, the completion of administrative procedures and payment of pension by the Social Security Organisation, the latter shall arrange for the wages of the deceased to be paid on account, on the basis of his last wages, to his dependants for a period of three months.

Sec. 23. With regard to the payment of wages or of pensions arising from death, sickness, retirement, unemployment, lay­off, total or partial disability, or protective regulations and conditions pertaining thereto, workers shall be subject to the Social Security Act.

Sec. 24. In the event of the termination of an employment contract concluded for piece­work or for a fixed term, the employer shall pay to each worker employed under such a contract for one year or more, whether continuously or not, an amount equal to his last monthly wage for each year of service as a length­of­service allowance.

Sec. 25. Where an employment contract is concluded for a fixed term or for piece­work, neither party may unilaterally terminate the contract.

    Note. The settlement of disputes arising from this type of contract shall be within the jurisdiction of the Board of Inquiry and the Disputes Board.

Sec. 26. Any important changes in working conditions that are contrary to the customs and common practice of the workshop or the workplace shall enter into effect only after written notification of approval by the Labour and Social Affairs Office. In the event of a dispute, the decision of the Disputes Board shall be final and binding.

Sec. 27. Where a worker is negligent in discharging his duties or if, after written warnings, he continues to violate the disciplinary rules of the workplace, the employer shall, provided that the Islamic Labour Council is in agreement, be entitled to pay to the worker a sum equal to his last monthly wage for each year of service as a length­of­service allowance, in addition to any deferred entitlements, and to terminate his employment contract.

In units in which there is no Islamic Labour Council, the employer shall secure the agreement of the Guild Society. In any of the above cases, if the dispute is not settled by agreement, it shall be referred to the Board of Inquiry and, failing settlement by the said Board, the matter shall be investigated and settled by the Disputes Board.

During the period of investigation by the above­mentioned dispute­settlement authorities, the employment contract shall be suspended.

    Note 1. In units not covered by the Islamic Labour Council Act, or where no Islamic Labour Council or Guild Society has been set up or where there is no workers' representative, the termination of an employment contract shall be subject to the agreement of the Board of Inquiry (see section 158 below).

    Note 2. Instances of negligence and default, as well as instructions and disciplinary rules to be observed by workers, shall be prescribed in regulations proposed by the Supreme Labour Council and approved by the Minister of Labour and Social Affairs.1

Sec. 28. The legal representatives of workers, the members of Islamic Labour Councils, and candidates fulfilling the necessary conditions in elections of worker representatives and of members of the Islamic Labour Councils shall, prior to the notification of a final decision by the Board of Inquiry (see section 22 of the Islamic Labour Council Act) or a decision of the Disputes Board, continue their activities in the same units and shall work and discharge their duties like other workers.

    Note 1. Upon receiving a petition regarding a dispute between the legal representatives of workers and employers, the Board of Inquiry and the Disputes Board shall immediately investigate the matter and state their opinion. In any event, the Disputes Board shall investigate the matter within one month of the filing of a petition.

    Note 2. In workplaces where there is no Islamic Labour Council and in regions where no Board of Inquiry (see section 22 of the Islamic Labour Council Act) is formed or where the workplace in question is not subject to the Islamic Labour Council Act, the representatives of the workers and the Guild Society shall, prior to the final ruling by the Board of Inquiry (see the Islamic Labour Council Act) and the final decision of the Disputes Board, continue their activities in the same units and discharge their assigned duties and tasks.

Division IV. Compensation for damages and payment of work termination benefits

Sec. 29. If the Disputes Board determines that the employer caused the suspension of a contract by a worker, the worker shall be entitled to damages arising from such suspension, and the employer shall be required to reinstate the worker to his former position.

Sec. 30. Where the operations of a workplace are interrupted and the workers are laid off as a result of force majeure (earthquake, flood, and the like) or of an unforeseeable event (war and the like), the employer shall, on resumption of activities of the workplace, be obliged to reinstate the workers thus laid off in the same reconstituted units and in the positions created therein.

    Note. With due regard to section 29 of the Constitution, the Government shall, by using public funds and resources derived from donations and contributions of the public, and by establishing an unemployment insurance fund, take action to secure the livelihood of workers laid off at the workplaces covered by section 4 of this Code, and to make arrangements for their re­employment, in compliance with section 43(2) of the Constitution.

Sec. 31. Where the termination of an employment contract is a result of the total disability or retirement of the worker concerned, the employer shall pay the worker an amount equivalent to 30 days' wages, at his most recent rate of pay, for each year of completed service. This amount shall be in addition to the worker's disability or retirement pension paid by the Social Security Organisation.

Sec. 32. Where the termination of an employment contract is the result of a work­related impairment of the physical or mental capabilities of the worker concerned (to be assessed by the Medical Committee of the Regional Health Care Organisation on the recommendation of the Islamic Labour Council or the worker's legal representative), the employer shall pay the worker an amount equivalent to two months' wages, at his most recent rate of pay, for each year of service completed.

Sec. 33. Cases of total or partial disability or disease, arising from work or otherwise, and the extent of the employer's failure to fulfil his statutory duties shall be determined on the basis of criteria and standards approved by the Council of Ministers, on the recommendation of the Minister of Labour and Social Affairs.


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