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Iran, Islamic Republic of
 


Source and scope of regulations - 2010    

References
  • Labour Code [LC], of 20 November 1990
    Date: 20 Nov 1990 (view in NATLEX »)
Scope
Size of enterprises excluded (≤): none
Remarks:
  • However, according to sec. 191 LC: "Small­ scale enterprises with fewer than ten workers may, as circumstances require, be temporarily excluded from some of the provisions of this Code. Determination as to such exceptional cases shall be in conformity with regulations to be proposed by the Supreme Labour Council and approved by the Council of Ministers."

Workers' categories excluded: civil/public servants; employer's family members
Remarks:
  • - Sec. 188 LC: "Any person subject to the Civil Service Act or to other special laws and regulations, and any worker in family workplaces where work is performed exclusively by the employer, his wife and his blood relatives in the first degree, are not subject to the provisions of this Code.
    Note: The provisions of this section shall be without prejudice to the fulfillment of other obligations explicitly prescribed in Chapters concerning the above cases. "
    *See also:
    - Sec. 189 LC: "In the agricultural sector, activities related to growing and management of fruit trees, various plants, forests, pastures, parks, animal husbandry, raising and breeding of poultry and birds, the silkworm industry, breeding of marine animals, beekeeping, cultivation, growing and harvesting and other agricultural activities are exempted from parts of this Code, at the proposal of the Supreme Labour Council, and subject to the approval of the Council of Ministers".
    - Sec. 190 LC: "The duration of work, holidays, leave, wages and salaries of hunters, fishermen, the personnel and employees of transport services (air, land and sea), housekeepers and domestic servants, the handicapped, workers whose work is such that the whole or a part of their wages and income are provided by customers, and of those whose work is generally carried out periodically shall be determined by regulations to be drawn up by the Supreme Labour Council, and approved by the Council of Ministers. In the absence of such regulations, the provisions of this Code shall apply".


Reforms under process
In 2006-2010, draft amendments to the Labour Code have been under discussion in Iran.


Types of employment contracts - 2010    

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Maximum probationary (trial) period: 3 month(s)

Remarks:
  • See sec. 11 LC, Note 1: "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".

Fixed term contract (FTC):
  • FTC regulated: Yes
    Remarks:
    • See Note 2 under section 7 of the Labour Code: "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."
  • Valid reasons for FTC use: no limitation
    Remarks:
    • See Note 2 under section 7 of the Labour Code: "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."
  • Maximum number of successive FTCs: no limitation
    Remarks:
    • The LC is silent as to the possibility of renewing FTC and the rules regarding the maximum number of renewals.
      It only refers to the "maximum duration of a definite period in respect of types of work which are not permanent by nature" which "shall be determined by the Ministry of Labour and Social Affairs and approved by the Council of Ministers."(sec. 7, note 2, LC).
  • Maximum cumulative duration of successive FTCs: no limitation
    Remarks:
    • The LC does not specify the maximum duration of (successive) FTCs
      According to the Note 2 under section 7 of the Labour Code: "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."

Notes / Remarks
Where an employment contract is concluded for a fixed term or for piece­work, neither party may unilaterally terminate the contract (sec. 25 LC)

Substantive requirements for dismissals (justified and prohibited grounds) - 2010    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • No statutory obligation to state the reasons for dismissal.
    However, according to sec. 27 LC, no disciplinary dismissal can take before prior written warnings have been given to the employee to correct his/her behaviour.


Valid grounds (justified dismissal): worker's conduct; economic reasons; worker's capacity
Remarks:
  • Where a worker is negligent in discharging his or her duties or if, after written warnings, he or she continues to violate the disciplinary rules of the workplace, the employer shall, provided that the Islamic Council is in agreement, pay the worker a sum equal to his or her last monthly wage for each year of service, and to terminate his or her employment contract (sec. 27 LC).
    In addition, according to sec. 21 LC (as amended) "the employment agreement may be terminated in any of the following cases:
    a) Death of worker.
    b) Retirement of worker.
    c) Total disability of worker.
    d) Expiry of duration of definite employment agreements and their non-renewal explicitly or implicitly.
    e) Completion of work in the contracts for specific task.
    f) Resignation of worker.
    g) Reduced production and structural changes imposed by economic, social and cultural developments calling for vast technological changes as provided in Article 9 of the Law Facilitating the Renovation of Industries.
    Economic reasons as authorized valid grounds for termination of employment result from an amendment to the 1990 Labour Code (not included in the electronic version of the text provided under "references"). Source of information: "LIS 643 and 644, Day 25 & Bahman 2, 1387 ( 14-21/01/2009)", by Pars Associates, Attorneys-at-Law, published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars), available at: http://avocats.fr/space/guillot-pars/content/lis-643et-644-des-25-day-et-2-bahman-1387---14-21-01-2009_C4307EB5-3EC5-42B5-8693-C392E41F5282.


Prohibited grounds: race; colour; sex; language; ethnic origin
Remarks:
  • See sec. 6 LC on the general prohibition of discrimination: "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"


Workers enjoying special protection: no protected groups
Remarks:
  • No information found in the legislation reviewed.


Procedural requirements for individual dismissals - 2010    

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Notification to the worker to be dismissed: no specific form required

Remarks:
  • No specific form prescribed in the LC.
    Note however that termination of employment for continued violations of disciplinary rules requires previous written warnings (sec. 27 LC).

Notice period:
Remarks:
  • No statutory notice period to be observed.

    Pay in lieu of notice: No

    Notification to the public administration: No

    Remarks:
    • However, notification to the Ministry of Labour is compulsory in the event of a dismissal of a foreign worker, see sec. 125 LC:
      "Sec. 125. Where, whatever the circumstances, an employment relationship between a foreign citizen and an employer is terminated, the employer shall notify the Ministry of Labour and Social Affairs thereof within 15 days. The foreign citizen shall surrender his work permit to the said Ministry against a receipt within 15 days. If necessary, the Ministry shall request the appropriate authorities to expel the foreign citizen from the country."

    Notification to workers' representatives: Yes

    Approval by public administration or judicial bodies: No

    Remarks:
    • No general obligation to obtain the prior approval of the administration.
      However, the dismissal of an employee on the ground of continuous violations of the disciplinary rules or for negligence in performing his/her duties requires the assenting opinion of the Board of Inquiry and 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.
      Note that Islamic Labour Council must be established in workplaces engaged in production, industries, agriculture and services having over 35 permanent employees.
      "The Board of Inquiry is composed of:
      * (1) one representative of the Ministry of Labour and Social Affairs;
      * (2) one representative of the workers to be selected and appointed by the Provincial Coordination Council of the Islamic Labour Councils;
      * (3) one representative of the managers of industries, to be selected by the Provincial Centre of Employers' Guild Societies. (sec. 158 LC)"
      Therefore, in cases where disciplinary dismissals are subject to the approval of the Board of Inquiry, the administration plays a role in authorizing the dismissal through the participation of one representative of the Ministry of Labour and Social Affairs in the Board.

    Approval by workers' representatives: Yes

    Remarks:
    • Termination on the ground of continued violations of disciplinary rules ground or for negligent performance requires the agreement of the Islamic Labour Council or the Guild Society. 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 (sec. 27 LC)
      Note that Islamic Labour Councils must be established in workplaces engaged in production, industries, agriculture and services having more than 35 permanent employees.

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2010    

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    Definition of collective dismissal (number of employees concerned):
    No definition of collective dismissals.
    The LC allows termination of employment in the event of "reduced production and structural changes imposed by economic, social and cultural developments calling for vast technological changes" without specifying the number of employees affected.

    NOTE: This information has changed since the previous period covered.
    Remarks:
    • Sec. 21 g) LC as amended. These reasons were not included in the original version of the LC of 1990 and the new sub-clause g) results from an amendment - not included in the electronic version of the text of the LC provided under "references".
      Information found in secondary sources:
      "It has been said that the Expediency Council has now authorized the discharge of workers by adding a Sub-clause g) to Article 21 of the Labour Law approved 1990 whereby the employers, in case of a reduced output and structural changes imposed by economic, social and political developments shall have the rights to discharge their employees.
      The following is a translation of the text of Article 21 of the Labour Law approved by the Economic Committee of the Expediency Council:
      Article 21- The employment agreement may be terminated in any of the following cases (...)
      g) Reduced production and structural changes imposed by economic, social and cultural developments calling for vast technological changes as provided in Article 9 of the Law Facilitating the Renovation of Industries."
      Source of information: "LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", by Pars Associates, Attorneys-at-Law, published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars).

    Prior consultations with trade unions (workers' representatives): Yes

    Remarks:
    • Section 9 of the Law Facilitating the Renovation of Industries as quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):

      "In order to promote efficiency within industrial companies, the workforce of every such company will be graded through cooperation between the labourers organizations and management of every industrial company. In case of agreement by and between both parties (labourers and management) in respect of the required and redundant workforce, the redundant workers will be laid off by payment of two months' aggregate salaries and benefits for each year of service for the factory concerned or through any other way to be mutually agreed upon. The laid off workers will be covered by unemployment insurance according to the criteria described in Sub-clause (a) of Article 7 of the Unemployment Insurance Act approved on September 16, 1990. Should the parties fail to reach agreement, the difference between the workers organization and employer concerned shall be referred to a work group consisting of the representatives of the government (ministries of Industries and Mines, Labour and Social Affairs, and the Management and Planning Organization) and the Social Security Organization as well as higher organizations of employers and labourers in order that the said committee, lay off the redundant workers by payment of the severance pay set forth in the Labour Act in compliance with the criteria under Sub-clause (a) of Article 7 of Unemployment Insurance Act approved on September 16, 1990 for unemployment insurance coverage."

    Notification to the public administration: Yes

    Remarks:
    • Only if the parties do not reach an agreement.

      See sec. 9 of the Law Facilitating the Renovation of Industries as quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):

      "In order to promote efficiency within industrial companies, the workforce of every such company will be graded through cooperation between the labourers organizations and management of every industrial company. In case of agreement by and between both parties (labourers and management) in respect of the required and redundant workforce, the redundant workers will be laid off by payment of two months' aggregate salaries and benefits for each year of service for the factory concerned or through any other way to be mutually agreed upon. The laid off workers will be covered by unemployment insurance according to the criteria described in Sub-clause (a) of Article 7 of the Unemployment Insurance Act approved on September 16, 1990. Should the parties fail to reach agreement, the difference between the workers organization and employer concerned shall be referred to a work group consisting of the representatives of the government (ministries of Industries and Mines, Labour and Social Affairs, and the Management and Planning Organization) and the Social Security Organization as well as higher organizations of employers and labourers in order that the said committee, lay off the redundant workers by payment of the severance pay set forth in the Labour Act in compliance with the criteria under Sub-clause (a) of Article 7 of Unemployment Insurance Act approved on September 16, 1990 for unemployment insurance coverage."

    Notification to workers' representatives: Yes

    Remarks:
    • Section 9 of the Law Facilitating the Renovation of Industries as quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):

      "In order to promote efficiency within industrial companies, the workforce of every such company will be graded through cooperation between the labourers organizations and management of every industrial company. In case of agreement by and between both parties (labourers and management) in respect of the required and redundant workforce, the redundant workers will be laid off by payment of two months' aggregate salaries and benefits for each year of service for the factory concerned or through any other way to be mutually agreed upon. The laid off workers will be covered by unemployment insurance according to the criteria described in Sub-clause (a) of Article 7 of the Unemployment Insurance Act approved on September 16, 1990. Should the parties fail to reach agreement, the difference between the workers organization and employer concerned shall be referred to a work group consisting of the representatives of the government (ministries of Industries and Mines, Labour and Social Affairs, and the Management and Planning Organization) and the Social Security Organization as well as higher organizations of employers and labourers in order that the said committee, lay off the redundant workers by payment of the severance pay set forth in the Labour Act in compliance with the criteria under Sub-clause (a) of Article 7 of Unemployment Insurance Act approved on September 16, 1990 for unemployment insurance coverage."

    Approval by public administration or judicial bodies: Yes

    Remarks:
    • The administration will act only in the absence of agreement between the employer and the workers' representatives.
      See sec. 9 of the Law Facilitating the Renovation of Industries as quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):
      (...)
      " Should the parties fail to reach agreement, the difference between the workers organization and employer concerned shall be referred to a work group consisting of the representatives of the government (ministries of Industries and Mines, Labour and Social Affairs, and the Management and Planning Organization) and the Social Security Organization as well as higher organizations of employers and labourers in order that the said committee, lay off the redundant workers by payment of the severance pay set forth in the Labour Act in compliance with the criteria under Sub-clause (a) of Article 7 of Unemployment Insurance Act approved on September 16, 1990 for unemployment insurance coverage."

    Approval by workers' representatives: Yes

    Remarks:
    • Section 9 of the Law Facilitating the Renovation of Industries as quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):

      "In order to promote efficiency within industrial companies, the workforce of every such company will be graded through cooperation between the labourers organizations and management of every industrial company. In case of agreement by and between both parties (labourers and management) in respect of the required and redundant workforce, the redundant workers will be laid off by payment of two months' aggregate salaries and benefits for each year of service for the factory concerned or through any other way to be mutually agreed upon. The laid off workers will be covered by unemployment insurance according to the criteria described in Sub-clause (a) of Article 7 of the Unemployment Insurance Act approved on September 16, 1990. Should the parties fail to reach agreement, the difference between the workers organization and employer concerned shall be referred to a work group consisting of the representatives of the government (ministries of Industries and Mines, Labour and Social Affairs, and the Management and Planning Organization) and the Social Security Organization as well as higher organizations of employers and labourers in order that the said committee, lay off the redundant workers by payment of the severance pay set forth in the Labour Act in compliance with the criteria under Sub-clause (a) of Article 7 of Unemployment Insurance Act approved on September 16, 1990 for unemployment insurance coverage."

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Remarks:
    • No information in the legislation reviewed.

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

    Remarks:
    • No information in the legislation reviewed.

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2010    

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    Severance pay:
    Remarks:
    • - Permanent workers:
      See sec. 27 LC: Where a worker is negligent in discharging his or her duties or if, after written warnings, he or she continues to violate the disciplinary rules of the workplace, the employer shall have the right to terminate the employment agreement, upon approval of the Islamic Labour Council, and shall pay to the worker a sum equal to his or her last monthly wage for each year of service as a length ­of­ service allowance, in addition to any deferred entitlements.
      (No information found in the LC as to the entitlement to severance pay of a permanent worker with less than 1 year of service)

      See also:
      -Workers under a fixed-term contract:
      Sec. 24 LC: 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 length­ of­ service allowance.
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 1 month(s)
    • tenure ≥ 2 years: 2 month(s)
    • tenure ≥ 4 years: 4 month(s)
    • tenure ≥ 5 years: 5 month(s)
    • tenure ≥ 10 years: 10 month(s)
    • tenure ≥ 20 years: 20 month(s)
    Redundancy payment:
    Remarks:
    • See sec. 9 of the Law Facilitating the Renovation of Industries , quoted by Pars Associates, Attorneys-at-Law, in " LIS 643 and 644, Day 25 & Bahman 2, 1387 (14-21/01/2009)", published on the "Blog of Guillot-Pars associates" (http://avocats.fr/space/guillot-pars):

      - In case of agreement by and between both parties (labourers and management) in respect of the required and redundant workforce, the redundant workers will be laid off by payment of two months' aggregate salaries and benefits for each year of service for the factory concerned or through any other way to be mutually agreed upon. The laid off workers will be covered by unemployment insurance according to the criteria described in Sub-clause (a) of Article 7 of the Unemployment Insurance Act approved on September 16, 1990.
      - In the absence of agreement between the parties, the dispute shall be referred to a committee consisting of representatives of the government and the Social Security Organization as well as higher organizations of employers and workers, in order that the said committee lays off the redundant workers and pays them the amount of severance pay set forth in the Labour Act (= 1 month per year of service).
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 2 month(s)
    • tenure ≥ 2 years: 4 month(s)
    • tenure ≥ 4 years: 8 month(s)
    • tenure ≥ 5 years: 10 month(s)
    • tenure ≥ 10 years: 20 month(s)
    • tenure ≥ 20 years: 40 month(s)

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2010    

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    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    No compensation in lieu of reinstatement: when the dismissal is unlawful, the worker shall be reinstated and the employer shall be ordered to pay his or her remuneration as of the date of his or her dismissal.

    Remarks:
    • Secs. 20 and 165 LC.

    Reinstatement available: Yes

    Remarks:
    • In the case of unlawful dismissal, the worker shall be entitled to apply to the Board of Inquiry within 30 days. If the employer is unable to prove that the dismissal is based on a valid reason, the employer shall be obliged to reinstate the worker in his or her job (sec. 20, LC).

    Preliminary mandatory conciliation: Yes

    Remarks:
    • In the event of a dispute between an employer and a worker, a settlement shall, in the first instance, be sought by direct compromise between the parties (sec. 157 LC).

    Competent court(s) / tribunal(s): labour court

    Remarks:
    • Where no compromise can be reached, the dispute may be referred to, examined and settled by the Board of Inquiry (sec. 157, LC).
      Note that a worker who is to be dismissed in accordance with the decision of a Board of Inquiry shall be entitled to appeal the decision to the Disputes Board (sec. 158, LC).

    Existing arbitration: No