Sources of regulation
The Labour Code of 20 November 1990 (LC) is the main source
of labour legislation in the Islamic Republic of Iran. In addition, the
Constitution states that all persons have the right to freely choose an
occupation provided that it is not incompatible with the principles of
Islam or the public interests and does not violate the rights of other
persons.
Scope of legislation
The LC applies to all employers and workers as well as
workplaces and production units, industrial establishments and agricultural
services. Secs. 2, 3 and 4 of the LC define the terms “employer”,
“worker” and “workplace”.
Contracts of employment
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. The contract may be concluded for a definite
or indefinite period (permanent contract).
The maximum duration of a definite period shall be determined
by the Ministry of Labour and Social Affairs and approved by the Council
of Ministers (sec. 7, note 1, LC). Where no period is specified
in a contract for work which is permanent by nature, the contract shall
be deemed to be permanent (sec. 7, note 2, LC). The validity of
an employment contract shall be subject to fulfilment of the following
conditions:
- the
subject matter of the contract must be lawful;
- the
subject matter of the contract must be specified clearly and accurately;
and
- 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.
An employment contract shall also specify the following
information:
- the
type of work or occupation in which the worker will be engaged or the
duties that he or she must discharge;
- the
basic salary or wage and any supplements thereto;
- working
hours, holidays and leave;
- the
workplace;
- the
date of signing the contract;
- the
duration of the contract, if it is for a fixed term; and
- any
other matters required by custom and common practice in relation to
the job and the locality concerned.
When a contract of employment is concluded in writing,
it shall be drawn up in four copies: the first copy should be deposited
with the Labour Office, the second is retained by the worker, the third by the employer and the fourth
by the Islamic Labour Council.
The parties may agree on a probation period by mutual consent
and such agreement must be specified in the employment contract. The maximum
duration shall be one month for unskilled and semi-skilled workers and
three months for skilled and specialized workers.
Termination of employment
An employment contract may be terminated, other than at
the initiative of the employer, by any of the following events (sec.
21, LC):
- the
worker’s death;
- the
worker’s retirement;
- the
worker’s total disability;
- the
expiry of the period specified in an employment contract concluded for
a fixed term;
- the
completion of the work under a contract concluded for a specified assignment;
and
- the
worker’s resignation.
Dismissal
During the probation 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, he or she shall be required to pay remuneration
for the whole probation period (sec. 11, LC).
Where an employment contract is concluded for a fixed term
or for piecework, neither party may unilaterally terminate the contract
(sec. 25, 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, provided that the Islamic Council
is in agreement, be entitled to pay to 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).
If the employer refuses to reinstate the worker after a
period of suspension, such refusal shall constitute unlawful dismissal
(sec. 20, LC).
Notice and prior procedural safeguards
Termination of employment for continued violations of disciplinary
rules requires previous written warnings. Moreover, termination on this
ground or for negligent performance requires the agreement of the Islamic
Labour Council. In units where there is no Islamic Labour Council, the
employer must secure the agreement of the Guild Society.
Severance pay
Upon expiry of an employment contract for a specified period
of time or for piecework, the employer shall pay to each worker an amount
equal to his or her last monthly wage for each year of service (sec.
24, LC).
In the event of termination of employment as the result
of force majeure or an unforeseen event, the employer shall be obliged
to reinstate workers in the same reconstituted units in which they worked
before the operations of the workplace were interrupted (sec. 30,
LC).
Avenues for redress
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. Where no compromise can be reached, the dispute may
be referred to, examined and settled by the Board of Inquiry (sec.
157, LC).
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).
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).
Where there is unlawful dismissal, 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 (secs. 20 and 165, LC).
Further information
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