Regulations
on Employment of Workforce, Insurance and Social Security
Decreed and Amended by the High Council of Free Trade - Industrial Zones:
June 6, 1994, No. K25T/33433-
Jaunary 21, 1995, No. H397T/65076 -
August
2, 1995, No. K 18434T/61379
January 1, 1996, No. K 16004T/52099
Chapter
one: Generals
Article
I
In
these regulations, the following terms are used in lieu of the corresponding
phrases:
Country:
The Islamic Republic of Iran.
Zone:
Free Trade Industrial Zone of the Islamic Republic of Iran.
Secretariat:
The Secretariat of the High Council of Free Trade - Industrial
Zones.
Regulations:
Regulations on the Employment of Human Resources, Insurance and Social Security,
subject of Article 12 of the Law on Administration of the Free Trade - Industrial Zones.
Employcc:
A person who works in any capacity under the order of an employer in
return for wages or a salary.
Employer:
Is a natural or legal person under whose order an to his account and employ
works in return for wages or a salary.
Workplace:
Is a place, such as industrial, agricultural, mining, construction,
passenger Iransport, services, trading, manufacturing, public establishments or
the like, where an employee works under the order of an employer or his
representative.
Wages:
An amount in cash or kind or a combination of both which is paid to cut employee
in return for performing a task.
Fixed
Wages: The total sum of wages and fixed fringe benefits paid as by virtue
of the profession concerned.
Salary:
Whenever wages are set and paid on a monthly basis, they
are categorized its salary.
Work period: The period during which an employee
places his energy or time at the disposal of an employer for performing some
task.
Article
2
All the employees, employers and workplaces in the Free Zone are suhject to the provisions of this decree.
Note
Persons falling under the scope of the National Employment Act and a employment laws and regulations, as well as workers employed in frmily workplaces whose work is performed exclusively by the owner, his/her spouse and first - degree family members, are exempt from the provisions of these regulations.
Article
3
Supervision over the implementation of the provisions of this decree, upholding the rights of the employers and employees, and the discharging of obligations in connection with employment contracts shall he vested with the Zone Authority. For The purpose of fulfillment of obligations by employers vis‑a‑vis their employees, the Zone Authority is empowered to obtain necessary guarantees and, in the event of non‑performance of such obligations by the employers, to fulfill the employers' obligations or the awards issued by legal or judicial authorities and courts, by way of utilizing such guararitces.
Article
4
In cooperation with, and the participation of, employer and employees, the Zone Authority shall provide welfare benefits, needed by workers, such as housing, sport facilities, health and medical services and facilities for the procurement of foodstuff and basic necessities.
Article
5
The Ministry of labor and Social Affairs shall, in cooperation with each Zone Authority, establish a Labor and Employment Services Office in each Free Zone. This office shall regulate the labor market and supervise matters relating to work safety and health and other related insurance issues.
Note
I
The head of Labor and Employment Services Office shall be appointed by the Minister of Labor and Social Affairs, upon proposal by the lone Authority.
Note
2
The head of labor and Employment Services office is obliged to dispateh every Three months it report on the performance of the said office to the Ministry of Labor and Social Affairs.
Article
6
Labor inspectors shall inspect the workplaces subject to this decree. Employers and the Zone Authority are obliged to take measures at prescribed intervals for redressing shortcomings in matters relating to safety and security of the work environment and put into force the legal recommendations of the labor inspectors.
Chapter Two: Employment Contracts
Article
7
An employment contract is a written contract according to which an employec performs certain tasks for an employcr for a fixed or unfixed time in return for a specified amount of wages.
Note
1
Whenever the work period is not fixed, the date of the completion of it work or project or the activities of the workplace, shall be considered the expiry date of the contract, taking in to account the nature and type of the Work concerned.
Note
2
In cases where the work by its nature is permanent and the work period is not specified in the contract, it shall be considered permanent.
Note
3
With respect to contracts for a temporary period or specific job, neither party is allowed to unilaterally terminate the contract (except in cases provided for in the employment contract). In the event of unilateral termination of the contract by one of the parties, the other party may claim damages through the Board for Settlement of Disputes.
The continuous nature of work shall have no bearing on the permanence of the contracts concluded for a specified period.
Article
9
Observance
of the following conditions is essential for the validity of a contract:
1)The
legitimacy of the purpose of the contract
2)
Explication of the subject of the contract
3)
Absence of legal and religious prohibitions for the
parties
in possession of the property or the
performance
of the job concerned.
Note
All employment contracts are deemed to be valid, unless proved null and void by competent authorities.
Article
10
In
addition to containing the exact particulars and identity of the parties, an
employment contract must include the following provisions:
1)
The type of the work, task or duties that an employee is to perform
2)
The salaries, wages and benefits
3)
Work hours, holidays and leaves of absence
4)
The place where the work is to be performed
5)
The date of signing the employment contract
6)
The duration of the contract; if the work is temporary
7)
Welfare and motivational benefits to be given to the worker
8)
The manner of the settlement of disputes, with due regard to The
provisions of this decree
9)
The manner of the termination of the contract, with due regard to the
provisions of this decree
10)
Other aspects, warranted by existing conditions and circumstances, which the
parties deem necessary to be inserted in the contract.
Note
1
Employment contract shall be executed in three copies, one of which shall be kept by the employee, another one by the employer, and the other by the Zone Authority.
Note
2
The Zone Authority shall prepare The sample of employment contracts required by workplaces in two languages one of which shall be in Farsiand put them at the disposal of workplaces.
Article
11
The employer may fix a period of time, called a probation period, during which either party may, without prior notice or payment of an indemnity, terminate the work relationship. The probation period shall be agreed by mutual consent of the parties and specified in the contract, but it shall not exceed one month for unskilled and semi‑skilled workers and three months for skilled workers. In any event, wages and work benefits accruing to a worker whose work discontinues in the course or at the end of probation period shall be paid for the duration of this employment.
Note
Probation contracts for a specific Job may be entered into only once between an employee and employer.
Article
12
An
employment contract may he terminated as a consequence of one of the Following
causes:
1)
Death of the employee
2)
Retirement of the employee
3)
Total disability of the employee
4)
Expiry of the tenure of an employment contract concluded for a
specified period
5)
Completion of work contracted for specific work
6)
Cancellation of the employment contract by the employer and the employee
in cases stipulated in the employment contract in accordance with this decree
Article
13
Whenever the dismissal of an employee is caused by non‑compliance with disciplinary work regulations, the employee may complain to the Board of Dispute Settlement provided for in this decree. The said board shall adopt a decision based oil the provisions of this decree and the disciplinary regulations applied in the workplace.
Article
14
Any
change in employment conditions is contingent upon having been provided for in
the employment contract and if the circumstances and conditions in the workplace
necessitates such a change. Whenever an employer, without due consideration to
the employment contract and without the consent of the employee, initiates it
change in employment conditions in such a way that the employee suffers in terms
of wages or prestige, the employee is entitled to lodge a complaint with the
Board for Settlement of Disputes and seek relief
Chapter
Three: Conditions of Employment
Article
15
Employment of persons below the age of 15 years is prohihiled.
Article
16
Daily working hours of a worker shall be .decided on by mutual agreement of the
parties concerned; but, in any event, working time shall not exceed 176 hours in
four successive weeks.
Article
17
Day shift work is the work whose duration of performance is from 6.00 to 22.00
hours tile and night shift is the work which is performed between 22.00 to 6.00
Mixed shift work is work performed partially at night and partially during the
day,
Article
18
Intermittent work is that which is not typically performed in successive hours, but is rather done in specific hours of day and night .
Article
19
Shift work is the work that rotates during the course of month in such a way that it is performed in the morning or afternoon or at night.
Article
20
In accordance with a concluded contract, whenever the work is performed as shift or night ‑ shift work, benefits paid for these types of work shall be fixed on the basis of the employment contract, mutual agreement of the employee and employer, and the conditions and circumstances of the workplace.
Article
21
Taking of the weekly holiday (Friday), annual paid leave and official holidays shall he subject to the agreement between the parties and, whenever with the agreement of the employee, such leaves are postponed to other days and/or not utilized, due benefits shall be paid on the basis of prior agreement decided by both parties.
Article
22
In addition to the country's official holidays, international Labor Day (May 1st ) shall also be one the official holidays for the workers.
Article
23
In the event of the termination or expiry of the employment contract, retirement, total disability of the employee and/or closure of the workplace, the amount due to an employee on account of unused paid leave shall be paid to him/her and, in the event of his/her death, to his/her inheritors.
Articl
An
employee's annual paid leave, including Fridays, total 20 days; holidays other
than Friday, shall not be counted as leave days. For employment lasting less
than one year, the said leave is computed in proportion to the days worked.
Article
25
Any overtime work performed during a tour week period which exceeds the 176
hours specified in Article 16 of this decree, requires payments of benefits as
contained in the employment contr;tct.
Article
26
The minimum wages paid in the Zones shall not be less than the inininttun legal wages of the country.
Article
27
Equal wages must be paid to men and women for the same work performed under the same conditions in the same workplace. Discrimination in the amount of wages paid by reasons of age, sex, race, etltnicitv and political or religious belief's is prohibited.
Article
28
In cases where, by mutual agreement of the parties, it part of the wages is paid in kind, determination of the cash value for this type of payment must he fair and reasonable.
Chapter
Four: Board of Settlement of Disputes
Article
29
Any dispute between an employee and employer arising from the implementation of this decree and that of the employment contract, shall be settled initially in an amicable manner. Whenever disputes are not settled amicably, the matter shall he referred by either party to the Board of Settlement of Disputes within 10 days
Article
30
The
board mentioned in the above Article is composed of:
•
The employer in question,or his/her fully authorized representative.
•
The employee in question, or his‑her fully authorized
representative.
•
The representative of the Zone Authority.
Note
The Board of Settlement of Disputes is obliged to examine the case and issue its
ruling within 10 clays From the date of the receipt of the complaint.
Article
31
The rulings by the Board of Settlement of Disputes shall be final and enforceable within 10 days after the date of serving notice to the parties concerned, and shall be executed by the judgement execriting section of the justice administration.
Article
32
An employee whose employment contract is terminated by the employer may, within 15 days, refer to the Board and request investigation of the case.
Article
33
Whenever the dismissal of the employee is judged justified by the Board of Settlement of Disputes, tile Board shall confirm his/her dismissal and shall obligate the employer to pay 15 days of salary to the employee for each year of his/her service.
Article
34
Whenever the dismissal of the employee is not judge justiticd by the Board, the employer shall have the option of either reinstating the employee and paying his/her salary for the period of suspension or pay his/her, by way of compensation, 45 days of salary for each year of his/her service.
Article
35
Taking, into consideration the economic and social conditions and circumstances, the Secretariat of the High Council Shall prepare standard labor disciplinary regulations in coordination with tile Ministry of Labor and Social Affairs and each Zone Authority, and shall communicate to the Authorities ofthe Free Zone for implementation.
Article
36
The
employer of each workplace located in a Zone shall prepare labor disciplinary
reguhrtions for his/her own workplace and put the same into force, subsequent to
obtaining approval from the Zone Authority.
Chapter
Five: Training and Recrnitment
Article
37
In coordination with each Zone Authority, the Ministry of Labor and Social Affairs shall compile statistics and data, as may be required, on human resources by obtaining there from workplace and institutes established in the Free Zone.
Article
38
Authorities of the Zones shall provide employment services through issuance of permits for the establishment of non‑governmental employment agencies in the Free Zone,.
Article
39
In coordination with the Ministry of labor and Social Aflairs (the Organization for Technical and Professional Training ), and with due regard to Article (9) of the Law on the Administration of the Free Trade-Industrial Zones, the Zone Authority shall establish technical and vocational training centers, in consideration of the requirements of the labor market.
Article
40
In cooperation with the Labor and Employment Services Office, as well its the employers, the Zone Authority shall introduce applicants to the technical and vocational training centers.
Note
Rules
concerning the dispatching of such persons for training and the manner of
organizing training courses and the like, shall be adopted by the Zone Authority
in cooperation with the Labor and Employrrrenl Services Office.
Chepter
Six: Employment of Foreign Nationals
Article
41
All the employers of workplaces established in the Zone are obliged, to the extent possible, to satisfy their labor requirements by employing Iranian workers. Nevertheless, in such workplaces, the services, expertise and skills of forelgn experts can be used, subject to the conditions set forth in this decree.
Note
The number of foreign employees shall, in any case, not exceed ten percent (10%) of the total number of persons employed in each Zone.
Article
42
At the discretion of, and upon the request by, the Zone Authority, a work permit shall be issued by the labor and Employment Services Office in the Zone, in accordance with the provisions of Article (41) and the Note thereof.
Article
43
Foreign nationals who work in the Free Zones shall undertake to train Iranian employees in their field of expertise during the period of their employment. The manner in which the expertise of foreign nationals have to be transferred to Iranian employees shall be determined by the Authority of each Zone.
Article
44
At the time of the termination of the employment contract, the employer who had entered into an employment contract with a foreign national as well as the foreign national whose contract has expired, are obligated to convey the matter to the labor and Employment Service Office of the Zone Authority concerned.
Article
45
Workplaces
located in a Zone are required to prepare and communicate to the Zone
Authority's Labor and Employment Services Office, once very six months, a list
containing the name, nationality, expertise,Job and wages of Their
employees.
Chapter
Seven: Social Security
Article
46
The Authority of the Free Zone is required, independently or jointly with the Social Security Organization and/or insurance companies to establish a " Fund " or several "Fund" for the purpose of providing medical services, wage indemnities for periods of sickness, pregnancy, partial or total disability, retirement and other similar cases for employees covered by these regulations in the Free Zones.
Note
In accordance with laws and regulations on social security, the Social Security Organization may also render, independently, the various insurance services to the domestic and foreign employees engaged in the workplaces located in the Free Zones.
Article
47
The employment record of those workers employed in workplaces located in the Free Zone, who, in the past, were subject to the Social Security Act and who had paid social security premiums to the Social Security Organization, as well as the workers subject to the regulations of this decree who have paid social security prerrrirrrns to the fund, shall be maintained and are entitled to transfer such record to their future cmployer.
Note
Rules and guidelines governing the record of this type of persons and the computation thereof shall be prepared by the Zone Authority and Social Security Organization and approved by the High Council of Free Trade Industrial Zones.
Article
48
Foreign nationals working in the Free Zone are entitled to avail themselves of tile benefits of the relevant Fund.
Article
49
Foreign nationals authorized to work or reside in the Free /one Shall he subject to the regulations of the "insurer". In any case, insurance of the Foreign nationals shall be undertaken with due consideration to reciprocal agreements.
Article 50
Rules
and guidelines governing the determination of per capita insurance premiums for
foreign nationals, the manner of establishing a Fund or Funds and regulations
governing thereof: the relations between Funds and the Social Security
Organization and/or other insurance companies, the manner of transferring the
insurance record of foreign nationals to the country, and other related issues
shall be prepared by the Secretariat of the High Council and the Social Security
Organization and approved by the majority of the Ministers of thc High Council
of the Free Zones.
Chapter
Eight: Miscellaneous
Article
51
The
conventions and resolutions of the International Labor Orgcmization shall he
binding in the Free Zones.