Employment law in Iran
Employment law in Iran is primarily governed by the Labor Code of Iran ( قانون کار جمهوری اسلامی ایران ), which outlines the rights and duties of both employers and employees. The law seeks to balance the interests of both parties, ensuring workers are protected while maintaining business operations. This framework covers areas such as employment contracts, working hours, wages, leave entitlements, termination, and dispute resolution.
Here is an overview of the key aspects of employment law in Iran:
1. Employment Contracts
Types of Contracts: Employment contracts in Iran can be written or oral, but written contracts are generally preferred to avoid disputes.
Indefinite Contracts: Most employment contracts are for an indefinite period (open-ended), meaning the employee is hired without a fixed end date.
Fixed-Term Contracts: Fixed-term contracts can be used for specific projects or temporary needs. These contracts have a set end date, typically not exceeding 5 years. If a fixed-term contract is extended repeatedly, it may be considered an indefinite contract.
Trial Period: The Labor Code allows for a probationary period of up to 3 months for both types of contracts, during which the employer can evaluate the employee's performance, and the employee can assess the working conditions.
2. Wages and Salaries
Minimum Wage: Iran has a minimum wage, which is determined annually by the Supreme Labor Council in consultation with labor unions and government officials. The minimum wage typically varies depending on the sector and type of work. In recent years, it has been set at a level to meet the basic needs of workers, but inflation has often eroded its real value.
Payment Frequency: Wages must be paid at least once a month. Most employers pay employees on a monthly basis, although bi-weekly or weekly payments may be agreed upon in the employment contract.
Overtime: Overtime work (any work exceeding the normal 44-hour workweek) is compensated at a rate of 1.4 times the standard hourly wage for the first 4 hours of overtime, and 2 times the standard hourly rate for any additional hours worked.
Bonuses and Allowances: Many employers in Iran provide additional benefits such as bonuses, transportation allowances, or housing benefits, but these are not required by law.
3. Working Hours and Rest Periods
Standard Working Hours: The standard workweek in Iran is typically 44 hours, which is usually divided into 6 working days (8 hours per day). However, the working week can be reduced for certain sectors like retail or service industries.
Rest Periods: Employees are entitled to a 30-minute break after 6 hours of work. This break is typically unpaid unless specified in the employment contract.
Weekly Rest: Employees are entitled to 1 full day off per week, usually on Fridays. If employees are required to work on this day, they are generally entitled to double their regular wage.
4. Leave Entitlements
Annual Leave: Employees are entitled to at least 26 working days of paid annual leave after completing one year of continuous service. For those with less than one year of service, leave is prorated.
Sick Leave: Employees who are ill and unable to work are entitled to sick leave. The first 3 months of sick leave are typically paid at full salary. After 3 months, the employee may be entitled to a reduced salary depending on the duration and the terms of the employment contract. Employees are required to submit a medical certificate to qualify for sick leave.
Maternity Leave: Female employees are entitled to 90 days of maternity leave (around 3 months). This leave is generally fully paid through the Social Security Organization (SSO).
Paternity Leave: Male employees are entitled to 2 days of paid paternity leave following the birth of a child.
Public Holidays: Iran recognizes various public holidays such as Nowruz (Persian New Year), Islamic holidays, and Revolution Day. Employees are entitled to these days off, and if they are required to work, they are entitled to additional compensation (typically double time).
5. Termination of Employment
Dismissal: Employers have the right to dismiss employees for reasons such as misconduct, poor performance, or economic downturns. However, there are strict rules for termination to ensure that employees are not dismissed without cause.
Notice Period: Employees and employers must provide notice before terminating the employment relationship. The notice period generally depends on the length of service:
Less than 1 year: 1 month notice
1 to 5 years: 2 months notice
More than 5 years: 3 months notice
If an employer fails to provide adequate notice, the employee may be entitled to compensation equivalent to the notice period.
Severance Pay: Employees who are dismissed without just cause are entitled to severance pay, which is typically calculated as 1 month's wage for each year of service. In some cases, additional compensation may be owed depending on the reason for termination.
Resignation: Employees who voluntarily resign must also respect the required notice period. If the employee fails to do so, they may be liable to compensate the employer for the notice period.
Redundancy: In cases of redundancy (such as company closure or downsizing), employees are entitled to severance pay and other compensations as outlined in the Labor Code.
6. Employment Rights and Protection
Non-Discrimination: Iranian labor laws prohibit discrimination in hiring, wages, and promotions based on gender, race, religion, or nationality. However, gender discrimination is still prevalent in practice in some sectors.
Harassment and Bullying: Iranian law does not specifically address workplace harassment, but employers are generally expected to maintain a safe and non-abusive working environment. Employees can file complaints with labor authorities in cases of harassment or abuse.
Health and Safety: Employers are required to provide a safe and healthy working environment for their employees. This includes proper equipment, training, and adherence to safety regulations. In the case of workplace accidents, employees are entitled to compensation for injuries sustained while working.
7. Social Security and Benefits
Social Security Contributions: Both employers and employees are required to contribute to the Social Security Organization (SSO), which provides healthcare, pensions, and other welfare benefits.
Pensions: Employees are entitled to a pension when they reach the statutory retirement age (usually 60 years for men and 55 years for women), as long as they have made sufficient contributions to the SSO.
Health Insurance: The SSO provides healthcare benefits to employees, covering hospital visits, medications, and treatment for work-related accidents.
Unemployment Insurance: Employees who lose their jobs due to circumstances beyond their control may be entitled to unemployment benefits through the SSO, but this typically requires the employee to have made prior contributions.
8. Employment of Foreign Workers
Work Permits: Foreign nationals who wish to work in Iran need a work permit. These permits are typically granted to highly skilled professionals or workers in industries where local talent is not available.
Residence Permits: Along with a work permit, foreign nationals may require a residence permit to live and work in Iran legally.
9. Dispute Resolution
Labor Disputes: If a dispute arises between the employer and employee, the case can be taken to a labor court. The Ministry of Cooperatives, Labor, and Social Welfare is responsible for overseeing labor relations and mediating conflicts.
Mediation and Arbitration: In some cases, the dispute may be settled through mediation or arbitration, where both parties attempt to reach a resolution with the help of a neutral third party.
10. Special Regulations for Certain Sectors
Public Sector: Public sector employees have additional regulations and protections compared to private-sector employees, including more job security and specific benefits.
Women and Minors: Special labor laws protect the rights of women and minors, particularly in terms of working hours, conditions, and prohibited work types. Women, for example, are prohibited from working in hazardous jobs and are entitled to maternity leave.
Conclusion
The Labor Code of Iran is designed to protect the rights of workers while allowing employers to operate their businesses efficiently. It covers important areas such as contracts, wages, working hours, leave entitlements, termination, and dispute resolution. Both employers and employees must be aware of and comply with these regulations to ensure fair treatment and avoid legal issues. For more detailed and specific legal advice, it is recommended to consult a local labor law expert.
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