Labor law and Social Security in Iran

The current Iran Labor Law has been ratified after Islamic Revolution on September 24th, 1989. The Iranian labor law consists of twelve chapter as follows:

 

Chapter one of the Iranian Labor Law

The first chapter is dedicated to the general definitions and principles. The technical definition of an employer, employee and work place.

Who are subject to the Iran Labor Law?

According to Article one of the Iran Labor Law, the employers, employees and work places in all of the industries (in private section) in Iran is subject to the Iran Labor Law. It is worth mentioning that the state and government employees are not subject to the Iran Labor Law.

The definition of an employee in accordance to the Iran Labor Law

An employee is a natural individual who is employed by the employer and works at the request of the latter against receipt of salary. According to the above definition, in Iran, it is not possible for a legal entity to enjoy from privileges of an employee.

The difference between an employee and a contractor in Iran

Labor Law & Social Security

Labor Law & Social Security

The difference between the concepts of an employee and a contractor is a controversial topic in Iran law which has led to numerous lawsuits in Iran. There are lots of employers in Iran who are not willing to conclude an employment agreement with their employees in order to avoid relevant costs and liabilities such as obligatory insurance, minimum wage and etc. Considering the fact that the difference between these two legal terms has not been clarified in Iranian laws and regulations, it is important to consult with the lawyers who are specialist in the field of labor law in Iran to prevent from any unpleasant consequences.

The definition of an employer in accordance the Iran Labor Law

An employer is a real individual or legal entity that the employee works at his request against receipt of agreed salary. According to the Iranian labor law, the managers, directors and supervisors of the work place shall be considered as the representatives of the employer and therefore, an employer is also responsible regarding the actions of the above-mentioned representatives towards the employees.

The definition of a work place or work shop in Iran Labor Law

A work place or a work shop is a place in different types of industries where the employees perform their tasks and duties. The concept of a work place in Iran’s law could be varied from a small crafts workshop to a very prestige office.

 

Chapter two of the Iranian Labor Law

The subject of chapter two of the Iran labor law is employment agreement. According to the definition, an employment agreement in Iran could be concluded orally or in writing for a temporary or indefinite time. Considering the complexity of the process of dismissal of an employee in Iran, nowadays, the vast majority of the employment agreements in Iran have been drafted based on temporary formats.

Termination of an employment agreement in Iran

According to Article 21 of the Iran Labor Law, an employment agreement will be terminated in one of the following situations:

  1. Death of employee;
  2. Retirement of employee;
  3. Permanent total disability of employee;
  4. Expiration of the employment agreement;
  5. Fulfillment of the task (only applicable for agreements for specific tasks), and
  6. Resignation of employee.

 

Chapter three of the Iranian Labor Law

Chapter three of the Iran Labor Law explains the working conditions including fees and salaries, extra payments, withholding taxes, fees or charges which should be deducted from employee’s salary, working hours, overtime, leave days and holidays, working conditions of women and working conditions of juniors.

 

Chapter four of the Iranian Labor Law

Chapter four of the Iran Labor Law discusses the technical protection and health issues at work place. The chapter defines the High Council of Technical Safety for observation of the mandatory rules and regulations of technical safety and the Ministry of Health and Medical Education for observation of the provisions related to health and environment hygiene.

There is also one department in the Ministry of Labor and Social Affairs named Department for Inspection which is authorized to control the work places over the health and hygienic issues.

 

Chapter five of the Iranian Labor Law

Chapter five of the Iran Labor Law outlines the rules and regulations of internship and training and the general rules of employment. The law defines the training centers which are mainly responsible for training of unskilled employees. It is also possible for the trainees to be assigned by the employers to be trained through performing of actual work.

Part three of the chapter five, specifically clarifies the rules and regulation of the employment of foreigners in Iran.

According to the Iran Labor Law, the foreigners who are willing to work in Iran should initially obtain the entry visa with the right of employment. In the second step, the applicant should apply for the work permit.

 

Chapter six of the Iranian Labor Law

This chapter is dedicated to the different organs which should be set up in accordance to the provisions of the Iran Labor Law in governmental organizations and also in each work place.

 

Chapter seven of the Iranian Labor Law

Chapter seven of the Iran Labor Law is about collective labor agreements. The purpose of the collective labor agreements is to solve the problems and issues of the employees in the same fields through collective negotiations.

 

Chapter eight of the Iranian Labor Law

Welfare and social security of the employees is targeted by this chapter. According to the Iranian law, employers are obliged to insure their employees in accordance to the provisions of Iran Social Security Act.

 

Chapter nine of the Iranian Labor Law

This chapter discusses the specific dispute resolution councils of employment disputes. Any dispute arises out of the implementation of Iran Labor Law, shall be heard and studied only by two special councils as the dispute resolution organs of the Ministry of Labor and Social Affairs.

 

Chapter ten of the Iranian Labor Law

Chapter ten of the Iran Labor Law describes the Iran’s High Labor Council or the Supreme Labor Council (the “Council”). The Council is set up at the Iran Ministry of Labor and Social Affairs. The main duty of the Council is to determine the minimum salary and financial benefits of the employees at the beginning of each new Solar year.

 

Chapter eleven of the Iranian Labor Law

Chapter eleven of the Iran Labor Law describes the violations and penalties relating to the employment relationship. The penalties have the vast variety from financial fine to imprisonment.

 

Chapter twelve of the Iranian Labor Law

The miscellaneous provisions are gathered in the twelve chapter of the Iran Labor Law. The Subjects such as service certificate which is required to be issued by the employer at the end of the employment agreement or the situation of the work places which are exempted from the Iran Labor Law.

 

Social Security in Iran

The main authority who is responsible regarding Social Security in Iran, is the Social Security Organization (the “SSO”). SSO provides different types of coverages for employees of the private sectors and their families. According to the Iranian Social Security Law, it is an obligation for the employers to pay for the social security fees of their employees. The insurance services provided by the SSO is the most popular public insurance in Iran, around 70% of people are enjoying From SSO insurance.

 

The amount of Social Security Fees in Iran

The total amount of SSO fees in Iran is 30% of the salary of the employees. 23% of this amount shall be paid by the employers and 7% is the contribution of the employees which should be deducted from their salaries and pay to the SSO directly by the employers.

 

The services which are covered by the Social Security Insurance in Iran

The following items shall be covered by the Social Security Insurance in Iran:

  1. Pension for retired and old-aged employees;
  2. Compensation for disability or death of the employees;
  3. Unemployment coverage;
  4. Coverage of medical services, accidents and injuries, and
  5. Mothers’ coverage;

 

The Social Security Law in Iran

Iran’s social security law has been ratified in 1975. The law has 12 chapter as follows:

  1. Definition
  2. Organization and governmental organs
  3. The financial resources of SSO (contributions)
  4. Financial provisions
  5. Accidents, sickness, pregnancy and confinement
  6. Disability
  7. Retirement
  8. Death
  9. Marriage grants and family allowance
  10. General provisions for coverages and benefits
  11. Criminal provisions
  12. Miscellaneous provisions

 

The labor law and social security law in Iran should be divided into following topics:

  1. Employment contracts
  2. Child labor
  3. Working conditions
  4. Health and safety
  5. Minimum wage
  6. Hours
  7. Dismissal
  8. Retirement Benefits
  9. Disability Benefits
  10. Dependents Benefits
  11. Survivors Benefits