Middle East Report Winter 2006
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A Lose-Lose Game
To mollify the critics, the Ministry of Labor submitted draft amendments of the 1990 labor law in 2006. The new draft seems, however, to be strongly influenced by the discourse of the free market. According to neo-liberal economists, the main conflict in worker-employer relations is not so much between labor and capital as between the employed and unemployed: It is not labor in a titanic battle against capital, but one good for labor against another good for labor. Such rhetoric holds that Iran's labor law offers a high degree of protection to employed workers in the form of job security and fixed remuneration unrelated to productivity and, accordingly, advises more intense competition between the employed and unemployed in the labor market. If a modified labor law loosens restrictions on employers, allowing them to dismiss workers more easily, employed workers may lose their job security, but unemployed workers will be better able to find jobs.
Rooted in such theory, the draft amendments propose several changes giving carte blanche to employers seeking to get rid of employees. The suggested changes to sections 21 and 27 of the labor law are quite important. According to section 21, which has to do with termination of employment contracts, an employment contract may be terminated only by such events as the worker's death, retirement, total disability and resignation. The proposed draft, however, adds two other possibilities: a decrease in the firm's productivity, firm restructuring or technological updating, and a decrease in the physical power of the worker leading to a decrease in firm productivity.
According to section 27, "where a worker is negligent in discharging his duties or if, after written warnings, he continues to violate the disciplinary rules of the workplace, the employer shall, provided that the Islamic Labor Council is in agreement, be entitled to pay to the worker a sum equal to his last monthly wage for each year of service as a length-of-service allowance, in addition to any deferred entitlements, and to terminate his employment contract." The new draft would alter section 27 so that the employer can terminate an employment contract with a worker after two written warnings, without any need for the approval of the Islamic Labor Council. These changes to sections 21 and 27, if passed, will allow employers to dismiss workers much more easily.
If employers are to obtain such an advantage, is there any advantage accruing to workers in the draft amendments to the 1990 labor law? A glance at chapter 6 of the existing law shows that it does not allow for the existence of any independent worker organization, except the Workers' House, which is really a channel for government control over workers. According to section 130 of the chapter, "in order to propagate and disseminate Islamic culture and to defend the achievements of the Islamic Revolution," workers in industrial, agricultural, service and craftsman's establishments may establish Islamic associations whose duties, powers and functions shall be drawn up by the Ministry of the Interior, the Ministry of Labor and Social Affairs and the Islamic Propagation Organization, and approved by the Council of Ministries. Moreover, according to note 4 of section 131 in the chapter, the workers of any given unit may establish only an Islamic Labor Council, a guild society or workers' representatives, which in practice means that workers are not allowed to set up anything, since Islamic Labor Councils already exist in every workplace of any size. All these provisions remain in the draft, in which a single section has replaced six sections of the 1990 law, but with the same consequences for workers. According to the new section, "in order to propagate and disseminate Islamic culture and to protect the legitimate and statutory rights and interests of workers and employers and to improve their economic situation, in a manner guaranteeing the protection of the interests of society as a whole," workers subject to the labor code and the employers of a given profession or industry may establish Islamic associations, Islamic Labor Councils or elect their own representatives. At least as far as workers' demand for having independent organizations is concerned, the changes made in the draft give no advantage to the workers. The new draft proposed by the Ministry of Labor under Ahmadinejad seems to be a lose-lose game for workers: Employers get the right of expedited dismissal, without workers gaining any right to form independent trade unions.
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