How to write up an employment contract in Iranian law
The method of concluding an employment contract in Iranian law has special rules and regulations which, if not observed, will have various risks for the employer.
Important generalities about Iranian labor code
The method of arranging an employment contract as well as the content and types of employment contracts in Iranian law are subject to the Iranian labor code. The following items must be observed in an employment contract.
An employment contract in Iran can be for a definite or an indefinite period of time. Due to the difficulty of firing a worker under the Iranian labor code, an employment contract is usually concluded temporarily. Nowadays, very few companies tend to enter into a permanent employment contract.
The term of a probationary contract in Iranian labor code is one month at most for an unskilled labor and a maximum of three months for a skilled worker. The two parties can terminate the contract without any reason during the probationary period.
The worker should be covered under social security insurance from the first working day. The premium will be equal to 30% of worker’s salary, of which 23% will be paid by the employer and 7% by the worker. Supplementary insurance is not compulsory in Iranian labor code, but it is accessible in many companies.
It is very dangerous if an employer does not conclude a contract with a worker, because the worker will be considered as a permanent worker in this case. So, it is necessary that every active worker who works, have a contract in advance.
According to Iranian laws, the employer is liable for any damages incurred by the worker to a third party during the work; so, observing safety issues would be very important.
The employer has the criminal and civil liability for any physical damages incurred to worker during the working hours. In contractor agreements, the employer is responsible for controlling the working conditions of the contractor workers and will be liable to compensate for any probable and actual damages.
To have a disciplinary code is very important in Iranian labor law. The disciplinary code must be approved by the Department of Labor, in order to be invoked in Iranian labor courts easily.
Obligatory conditions in Iranian employment contracts
The number of copies of employment contracts in Iran is as follows:
- A copy to the worker
- A copy to the employer
- A copy to the Department of Labor
- A copy to the Labor Council/ Trade Union
According to Article 10 of Labor Law, in addition to the exact particulars of the worker and the employer, the content of the contract must include:
- The start day
- Salary on base pay
- Wage deductions in exchange for the basic labor rights of a worker or employee
- The type of work or profession or task that the worker should get engaged in
- The time and working hours
- Holidays and time off from work
- Workplace
- The date of contract
- Contract duration (if it is temporary)
- Conditions and the manner of termination of employment contract
- Other cases required by the job conditions, work habits, and place
The mutual rights and duties of worker and employer towards each other
On the basis of the contract concluded between the worker and the employer, each of them has some rights and obligations towards each other. Following this, these items are worth mentioning for the obligations that a worker has towards his/ her employer and the work:
- The appropriate execution of work according to the description in job announcement
- Accuracy and detail-mindedness in performing job tasks
- The observance of things given in trust
- The performance of employer executive orders within the limits of Iranian labor code
- The observance of disciplinary regulations based on the manual of disciplinary rules
- Collaboration in group tasks
On the other hand, the following items can be mentioned as some of the obligations that the employer has towards the worker or employee:
- The observance of workplace safety and sanitation standards
- Full and timely payment of salaries and benefits package
- The payment of annual compensation, which is equivalent to one month of salary for each working year
- The payment of legally required benefits such as the right to children, the right to housing, and the right to buy food and goods on the basis of the amount determined by the Supreme Labor Council
- The mandatory social insurance coverage
- The submission of a certificate of performance at the end of the contract
- Ensuring the safety and health of the worker
- The provision of tools and equipment for the worker
- Avoiding the exploitation of the worker
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