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ILCCR: Examination of individual case concerning Convention No. 95, Protection of Wages, 1949 Islamic Republic of Iran (ratification: 1972) Published: 2007Description:(ILCCR Individual Observation) Convention:C095 Country:(Iran) Session of the Conference:96 Document:22 Subject classification: Protection of Wages Subject: Wages Display the document in: French Spanish Document No. (ilolex): 132007IRN095 A Government representative stressed the importance of the Convention and the fact that non-payment of wages constituted a threat to the public interest, and had an immediate bearing on the lives of workers. Delayed payment of wages was at times experienced in certain sectors of the economy contrary to the letter and spirit of the Convention. Since the Conference Committee had first addressed this issue in June 2005, the Government had been vigilant in ensuring that every worker in the country received their salary as regularly as reasonably possible and would continue to do so. The Government also emphasized that the Committee of Experts was obviously satisfied with the three-day technical assistance mission to the Islamic Republic of Iran and had reached a better understanding of the labour realities. The mission of April 2006 had been held in a true spirit of openness and good will and had permitted a clear and objective appreciation of the nature, scale and causes of the wage difficulties experienced in certain sectors of the economy. Furthermore, the Committee of Experts had noted that even though irregularities continued to occur, the problem was tackled rather satisfactorily by the Government and the judiciary, and there was no evidence that the country was faced with a widespread wage crisis, or a non-payment of wages culture. The Government further maintained that although globalization offered extensive opportunities for development, it was not progressing fairly and evenly and had caused inequalities within and among nations, threatening employment and living standards in many developing countries including the Islamic Republic of Iran, and leading to a problem of back wages, large waves of job losses and the most regretable closure of plants. Article 3 of the Constitution obliged the Government to plan and implement viable policies to eliminate poverty and deprivation, and provide social security for all. The Labour Code also emphasized fair minimum wages, which were fixed by the tripartite Supreme Labour Council according to article 41. More than 50 articles dealt with wage issues in the Labour Code, thus indicating the importance attached to this issue. The decisive steps to improve law enforcement against violations of the Convention included an effective system of regular and unannounced labour inspections. Some 5,000 wage inspection missions had been conducted in 2006 and over 100,000 regular and 200,000 random inspections had been conducted during the same period to monitor payment of wages. The Ministry had received almost 100,000 complaints and meticulously examined them all; 130 labour inspectors had been recruited in addition to the 624 who already conducted inspections, and another 600 were to be recruited by the end of the year, thus doubling the number of labour inspectors in less than a year. Meanwhile, the Ministry also embarked on a rather extensive integrated labour inspection data collection web-based system, for which it required the most immediate ILO technical assistance. The settlement of disputes was addressed through the Labour Council at enterprise level, and trade unions and legal representatives of workers and employers. In the absence of an amicable solution, the case could be examined and settled in the Reconciliation Council of the Labour and Social Affairs Office. At the discretion of the complainant, the claim could be heard and settled by the Disputes Settlement Board, the rulings of which were binding and executed by courts of justice. Any infringement of the workers' right to payment of wages and other benefits constituted an offence subject to penal proceedings and punishment. Employers who did not implement the ruling of the Disputes Settlement Board were subject to a fine of between 20 and 200 times the minimum daily wage of the worker, depending on their financial condition. In accordance with Article 11 of the Convention, workers were treated as privileged creditors in case of bankruptcy or judicial liquidation of an undertaking, and wages due to them were paid in full before ordinary creditors. The problem of back wages was most evident in the textile sector where more than 64,000 workers were employed in 132 textile mills. Among them some 16,000 workers enjoyed the benefits of early retirement due to the nature of their hard and hazardous jobs. More than 15,000 workers had been made redundant upon their consent with severance pay. Almost 12,000 workers had chosen to rely on the unemployment fund. Almost 5,000 workers had been reinstated after structural adjustment in their plants. In the context of the new bill on tough and hazardous jobs, more than 80,000 workers had asked for early retirement after 20 years of service. Thirty-one per cent of 3,000 affected workplaces had serious financial problems in 2006. In order to ensure their sustainability, retain employment and ensure payment of wage arrears, the Government implemented an integrated policy, including industrial planning and policy advice on human resource strategies, advice and assistance in the area of technological innovation, advice on organizational improvement, planning and improvement of in-service training, allocation of financial resources to affected workplaces, allotting 20 per cent of bank loans to small and medium-sized enterprises (SMEs), re-employing workers on unemployment benefit, etc. Because ageing equipment was one of the main problems in many plants, the Ministry along with the Social Security Organization, based on section 1, paragraph 2, of the Unemployment Benefit Act provided legal protection to workers whose plants were under reconstruction and renovation, so that workers of these plants could rely on the unemployment fund until renovation was completed and the workers reinstated. This protective policy had covered approximately 250 production units in 2006 and over 4,000 jobs had been saved. To renovate textile, garment and leather industries, 560 new plants had received aid and nearly 12,000 jobs had been created in 2006. To help textile mills on the brink of total collapse, the Ministry of Industries and Mines had taken a variety of measures to redress their technological problems. Concerning the unemployed, the Ministry in cooperation with the Social Security Organization had provided unemployment benefits to more than 150,000 workers in 2006 only. Out of this number, more than 15,000 workers had been re-employed, almost 30,000 attended retraining courses and almost 4,000 had been sent to adult education schools. Large and medium industrial and agricultural enterprises negatively affected by globalization had also been protected by the Government through a mechanism which might provide them with the required financing or rescheduling of their debts. In 154 enterprises almost 40,000 job opportunities had been retained in 2006. A comparative study within the last two years revealed that while the demand of such enterprises for credit had increased by 18 per cent, the number of their protected workers had been reduced by 31.8 per cent, which was a good indication of the success of the policy. The Employer members thanked the Government for the information provided, including information on the measures taken to apply the Convention, and trusted that the same would be made available in writing. The 2003 General Survey on the protection of wages, they remarked, stated that the purpose of the Convention was to ensure regular payment of wages to workers, so as to afford them a certain level of certainty and security. The Employer members had already stressed the particular importance of regular payment of wages - an issue touching upon several crucial aspects of the employment relationship. If workers were not paid, economic insecurity, increased informality, general deterioration of living conditions and unfair competition could result. They noted with interest the report of the Office's technical assistance mission to the Islamic Republic of Iran in April 2006, which found that the Government was endeavouring to reduce the problem of wage arrears. The mission also concluded that there was no evidence of a widespread wage crisis, or of a non-payment of wages culture - either in terms of the number of workers affected or the duration of the delay in wages owed. They observed, however, that the Government did confirm the persistence of the problem of wage arrears, particularly in the textile sector. In this regard they joined the Committee of Experts in stressing the importance of providing the statistical information necessary for an accurate assessment of the issue. In the light of the positive indications contained in the mission report, they expressed confidence that the Government would make this information available. The Worker members emphasized the essential nature of this Convention for workers' security, the prevention of poverty and the sustainability of their purchasing power. In 2005 this Committee had noted the serious and persistent delays and non-payment of wages in violation of the Convention, and urged the Government to take all the necessary measures to find viable solutions to the crisis and ensure that workers claiming payment of wages were not subjected to threats or violence. The Government had then accepted a technical assistance mission which took place in April 2006. Although it only provided a few points of the mission report's content, the Committee of Experts had expressed some satisfaction on the matter. Nevertheless, the information coming from official press agencies in the Islamic Republic of Iran, or reliable sources either in Iran or other countries in recent months, did not corroborate this as they reported continued non-payment or delayed payment of wages in many institutions. The Worker members listed many specific cases, which illustrated the culture of non-payment and delayed payment of wages and demonstrated that serious violations of the Convention persisted. Moreover, those cases mentioned was only the tip of the iceberg considering the difficulties experienced by the press and the trade unionists. Serious violations of trade union rights were related to the issue under examination in so far as workers claiming their right to be paid on a regular basis were the object of sanctions. The acts of violence these workers were being subjected to, which had already been denounced in 2005, had still not ceased: police repression of strikes, demonstrations and gatherings, and detentions of trade union leaders. This climate of violence had led to the submission of new complaints to the Committee on Freedom of Association which considered that a strike aimed at an increase in wages and payment of wage arrears clearly falls within the scope of legitimate trade union activities. It is true that the present discussion concerned protection of wages, but this was inextricably linked to the exercise of freedom of association and the right to bargain collectively. Therefore the Government had to take all the necessary measures to put an end to the culture of non-payment of wages: reply to the requests of the Committee of Experts related to the reinforcement of the legislation and labour inspectorate and the adoption of sufficiently dissuasive sanctions; provide reliable and detailed statistics for examination by the Committee of Experts so they could assess the evolution of the situation; and put an end to the climate of intimidation and fear which existed for workers who sought to defend their rights. The Worker member of the Islamic Republic of Iran said that the textile sector was an ageing industrial sector which had undergone a process of modernization in order to become more competitive. This process had initially led to arrears in the payment of wages. The passing of a law on this issue had brought stability to the situation. Tripartite dialogue should allow the problem to be totally resolved and respond to the challenges of globalization. Private investments also played a major role in easing social tension. The Government had undertaken, along with employers and workers, a search for a practical solution to the problem. As Chair of the Board of the Supreme Centre of the Islamic Labour Council, the speaker declared that as far as he was aware, no trade unionists had been arrested. An observer representing the World Federation of Trade Unions (WFTU) expressed gratitude for the opportunity to address the Committee. He stated that for 18 years he had represented the Iranian workers at the Conference, but in the past two years, that right had been denied him by the Ministry of Labour and Social Affairs; he was also the President of the Textile Workers of Iran. He stated that, in 2005, he had expressed concern with violations of the Convention. The Government representative requested a point of order. He stressed that the subject of today's discussion was the Islamic Republic of Iran's implementation of Convention No. 95, not issues concerning freedom of association. The Worker member of France pointed out that the representative of the WFTU had barely introduced himself before the Government representative had guessed that his statement would concern freedom of association. That was odd to say the least. The Chairperson therefore had to reject his point of order. The observer representing the WFTU clarified that he was introducing himself, prior to addressing the application of the Convention, but first wished to express his support for the Worker members' statement that the protection of wages was directly linked to freedom of association rights in the Islamic Republic of Iran. He stated that he had expressed concern regarding violations of the Convention in 2005, and that the Conference Committee's 2005 conclusions on this subject were more critical than this year's comments of the Committee of Experts. He recalled that those 2005 conclusions highlighted the necessity of supplying full and detailed statistical information on the issue of wage arrears as this year's Committee of Experts comment had also noted. However, the Government had yet to provide the requested information. In 2005 he had also suggested that, on top of back wages owed, fair compensation was due to the aggrieved parties for losses incurred as a result of delayed payments. This suggestion, too, had not been taken up by the Government. He stated that although the measures adopted by the Government had improved the situation to some extent, the problem still persisted. During this year's May Day demonstration, the presence of a large number of textile industry workers was witnessed, including workers of Nassaji Kurdestan, Nassaji Taberestand of Qaiem Shar, Nassaji Mazandaran, and Chiet Sazibehshar. Textile workers from Qazvin province, including workers from Naz Nakh, Farnakh and Mahnakh, had demonstrated in front of the Parliament and the presidential office. These peaceful demonstrations were sometimes met by police brutality, and at times resulted in workplace arrests and the abduction of workers. Offering one example of the country's wage arrears problem, he stated that, in his province of Yazd, the wages of workers of Dorakhshane Yazd Co. and Yazd Fastoon had been in arrears for several months. Additionally, the Baft Balouch company in Balouchestan province, which employed eight hundred workers, had recently shut down without paying its workers their wages for the last four months. He also noted that a dissonance in the relevant law had placed workers receiving forced unemployment benefits in a difficult situation. Some of these workers were owed back wages, and at the same time were unable to retire under the law concerning hard and hazardous labour, as they were receiving unemployment benefits. He called upon the Government to ensure that these workers were fully compensated. He underscored that a great deal remained to be done to address fully the wage arrears problem in the Islamic Republic of Iran. First, the Government's complacent attitude towards this issue must change. Second, funds allocated for the creation of new job opportunities should be diverted to those companies facing financial flow problems. Third, workers who were owed arrears should not only receive back wages but also be duly compensated for the losses sustained as a result of the delays in payment. Finally, the recommendations in the Conference Committee's conclusions, including those of 2005, should be duly implemented, particularly the request that detailed information on the wage arrears situation be provided to the Committee of Experts. The Worker member of Canada stated that the 2006 ILO mission report, referred to in the comments of the Committee of Experts, had expressed satisfaction that the discussions held had permitted a "clear and objective appreciation of the nature, the scale and the causes of the wage difficulties experienced in certain sectors of the national economy". He expressed scepticism with this finding, regretting that he did not have a copy of the mission report to read and assess for himself. He noted that although section 37 of the Labour Code stipulated that workers must be paid regularly and in full on a biweekly or monthly basis, delayed payments to workers had increased in comparison with previous years. According to the Iranian Labour News Agency, 39,424 workers from 114 different production and services units were owed an average of 7.7 months of back wages. Official reports also showed that there were an average of 50 protests every month, and the overwhelming majority of these were staged to protest the non-payment of wages. In Asalouyeh, half of the workers' wages were in arrears for five to six months, even as they continued to labour under harsh conditions. Additionally, reports indicated that there were many cases in which workers chose not to protest delays in payment for fear of losing their jobs. Clearly the non-payment of wages was widespread and not confined to one particular sector of the economy. He stated that the minimum wage was another important issue related to the payment of wages. Official reports indicated that 75 per cent of over 30,000 contracting companies in the Islamic Republic of Iran had paid less than the minimum wage to over one million employees last year. The monthly payments of workers in Ghom Tissue Manufacturing, for example, did not exceed 80,000 Toman (US$80), even though the minimum monthly wage last year was 156,000 Toman (US$156). Several companies contracted by government offices also paid less than the minimum wage, or refused to pay overtime or night work compensation. He remarked that there was a growing and worrying trend of responding to workers' wage payment demands with threats and dismissals. Additionally, in some cases workers were being hired on temporary contracts and asked, as was done in the industrial city of Saveh, to sign blank forms. The speaker asserted that it was impossible to dissociate the lack of respect for the Convention and national laws from the broader issue of freedom of association rights. In this respect, he noted that independent unions in the Islamic Republic of Iran were courageously standing up for their rights, in spite of the efforts of the authorities and illegitimate trade union organizations to repress them. For instance, a teachers' protest was repressed by the authorities, with many of the participants arrested and thrown in prison. The Government representative emphasized that last year's mission to Iran, which some speakers had commented unfavourably upon, was headed by the Director of the ILO's International Labour Standards Department. He remarked that, although he would welcome a discussion on freedom of association, today's deliberations were limited to issues under Convention No. 95. The Worker members stressed that already in 2005, this Committee had made a link between the two elements in its conclusions. The Worker member of Canada offered several other examples of the repression of trade unionists. Mr Mahmoud Salehi, a labour activist, was arrested under murky circumstances and taken to the Sanandaj prison; Mr Salehi suffered from serious kidney impairment and his life was in danger. Additionally, over the last two years, union members employed by the Tehran and Suburbs Bus Company had been subjected to arrests, dismissals, and physical assault. Fifty union activists had been suspended from their jobs for over one year, and union president Mr Mansour Osanloo had been sentenced to five years' imprisonment for carrying out legitimate trade union activities. He concluded by urging the Government to take the necessary measures to bring its law and practice into conformity with Convention No. 95, as well as to ratify and implement Conventions Nos 87 and 98 as soon as possible. The Worker member of France highlighted that the impressive number of statistics provided by the Government representative was surprising, considering that the report of the ILO mission had noted the lack of reliable statistics. The right to regular payment of wages constituted a vital right for workers, which was why sufficiently dissuasive sanctions had to be provided by the legislation and imposed on the offending employers. All sectors were affected by the problem of wage arrears, not only the textile sector but also other sectors including the public sector. The data that had succeeded in leaking out evidenced the persistent and widespread nature of the problem. The conclusion that the problem was limited to the textile industry, which had to confront international competition, was completely unfounded. Workers were paying for the poor management by the Iranian authorities and one wondered how the oil revenues were being used. These should have made it possible to make the necessary investments for the modernization of the enterprises. The situation was serious and persisted while the State had not found any effective solutions, either in law or in practice, which was extremely alarming. The full exercise of freedom of association would allow for genuine tripartite dialogue which would help in finding a more effective resolution of the issue of the wage arrears. The Government representative stated that the statistics he had cited in his previous statement made specific reference to the problem of wage arrears. The Government was aware of the problem and would address it by all means at its disposal. Noting the comments made concerning complaints of back-wages owed, he stated that the Ministry of Labour had indeed compiled a considerable list of complaints in respect of back-wages. In response to this problem, the Government had managed to double the number of labour inspectors. It was aware that delays in wage payments worsened poverty, and thus tarnished the dignity of workers. He maintained that the Government had also allocated over US$100 million for the renovation of industries, including textiles. The overhaul of industries would not occur overnight, however. The process required more time. With respect to the Islamic Republic of Iran's contributions to the ILO, he stated that CHF900,000 had been deposited a month before last year's Conference, but sanctions had nevertheless been imposed on the Government for the non-payment of contributions. He reiterated that the non-payment of wages was a problem the Government admitted to freely and was determined to eradicate. In this respect it welcomed technical assistance from the ILO to assist in the collection of the relevant data, without which differing and incongruous information on the matter would continue to proliferate. The Employer members stated that the purpose of the 2006 ILO mission was to bring attention to the non-payment of wages problem, and that, although a greater awareness of the problem had been generated as a result, this alone was not sufficient. The Government must address the problem actively, and should be supported in its efforts to do so. They noted that, by the Government's own admission, problems in the Convention's implementation persisted. They called upon the Government to produce detailed statistical information to allow for as complete a picture as possible on the back-wages problem. They considered, in this respect, that the Government should not hesitate to make use of ILO technical assistance. The Worker members stated that the discussion had given them the impression that the Islamic Republic of Iran lived in two worlds: the virtual world where wages were regularly paid and free and democratic trade unionism was exercised without hindrance, and the real world where a culture of non-payment of wages and a climate of intimidation and fear reigned for workers who dared to defend their rights, as demonstrated by the imprisonment of two union leaders, Mansour Ossanco and Mahmoud Salehi. The Worker members requested the Government to take the necessary steps to put an end to the culture of non-payment of wages, to provide reliable and detailed statistics to the Committee of Experts, to respond to the requests of the latter with respect to strengthening of the legislation and labour inspection and the adoption of genuinely dissuasive sanctions, and to put an end to the climate of intimidation and fear that reigned for workers who sought to defend their rights.
ConclusionsThe Committee took note of the statement made by the Government representative, as well as the discussion that took place thereafter. The Committee noted that the Committee of Experts had been commenting on matters relating to accumulated wage debts especially in the textile sector. The Committee noted that according to the oral explanations provided by the Government representative, irregularities in the payment of wages continued to occur for a number of reasons, both national and international, but several measures had been adopted to resolve the situation. The Government referred to recent measures to reinforce the labour inspectorate and provided data on inspection visits. The Government also described available procedures for the settlement of wage disputes and indicated that several financial assistance schemes had been set up to facilitate the re-employment or early retirement of workers of enterprises which were undergoing judicial liquidation or restructuring. The Committee was informed of the existence of the report of the technical assistance mission undertaken by the Office in April 2006, following the Committee's previous discussion at the 93rd Session of the International Labour Conference in June 2005. It was informed, in particular, of the report's conclusion that although difficulties persisted in certain sectors as regards the regular payment of wages, the nature and scale of those problems appeared limited and the Government was tackling this situation with responsiveness. The Committee encouraged the Government to pursue its efforts to improve national laws and practices aiming at protecting wage earners from abusive pay conditions and to report to the Committee of Experts on any new developments in this regard. It emphasized, in this connection, the need for reliable statistical information and accordingly requested the Government to collect and submit at the next meeting of the Committee of Experts concrete information on the sectors and types of establishments concerned, the approximate number of workers affected, the overall amount of accumulated wage arrears, the average length of the delay in the payment of wages, as well as detailed particulars on related inspection activities and the results obtained. Finally, the Committee welcomed the Government's request for technical assistance in collecting data and establishing a database on labour inspection activities. The Committee therefore requested that the Office undertake a mission and that the conclusions of the mission be submitted to the Committee of Experts at its next meeting for inclusion in its report. |
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