It would be impossible to enter any aspect of domestic or international commerce such as agency, import, export, brokerage and commissioning, unless the needed human resources are supplied. A valid concern of capital owners, and of course a potential problem of investors, is skillful management of employer-employee relations which would enable them to make use of skilled, seasoned workforce and minimize risks arising from financial rights of employees, insurance, work accidents, dismissal of workforce and etc.
Therefore, one of the essential and important aspects of doing investment in Iran is being aware of Iranian labor laws and doing affairs in accordance with them. It should be noted that most of the legal issues concerning employer-employee relationships are governed by the Labor Act which was ratified in 1990, however, there are also some other laws and regulations such as Social Welfare Act, which obliges employers to insure employees, the Law regarding Iranian Administrative Justice Court, etc. that help create the labor legal system of Islamic Republic of Iran.
In order for every private business to employ an employee, it is necessary to conclude an employment agreement. The expression “employment contract” means a written or verbal agreement based on which a worker undertakes, in return for remuneration, to perform work for an employer for a definite or an indefinite period of time.
As regards the term of the agreement, it should be noted that employment contracts for noncontiguous jobs can be concluded for a specific term. However, as for continuous jobs, if the contract is not limited by term, it shall be treated as a permanent contract. Therefore, it is crucial to make a distinction between different natures of the work in terms of continuity.
Furthermore, As most employer to employee obligations such as the salary, working hours per day, holidays, insurance of employee, etc. are set to support the employees, they are mandatory and any agreement against them, is null and void. In this regard, it would not be possible for the employer to change the title of the contract in order to avoid the mandatory provisions in this regard.
According to the regulations, the essential parts of any employment contract that must be addressed in the agreement are as following:
In addition, an employment contract shall be terminated by any one of the following events:
Partners and associates at Bayan Emrooz International Law Firm can assist investors by offering comprehensive employers’ packages, consultation, drafting contracts, participation in dispute resolution commissions, procuring work licenses and securing residence/work permits for foreign employees.
Bayan Emrooz Law Firm was founded in 2008 under the registration No. 23211 in Tehran, and renders legal consultation and attorneyship services to foreign or domestic legal and natural persons. Our approach and main purpose is to expand the culture of utilizing legal consultation in civil and commercial matters in order to prevent high personal or social costs spent on resolution of disputes before judicial and non judicial authorities.
No. 36 (U 5), Kish St., Nelson Mandela Blvd. (Jordan) Tehran – Iran 15118814716