Economy, Domestic Economy

New Bill Seeks to Refine Labor Contracts

New Bill Seeks  to Refine Labor Contracts
New Bill Seeks  to Refine Labor Contracts

The ministry of cooperatives, labor, and social welfare is studying a bill that gives employers the right to fire an employee anytime, but, at the same time, makes them responsible to shift all their labor contracts from temporary to permanent, MNA reported on Wednesday.

The bill, which is expected to bring about drastic changes to the domestic labor market, as MNA reports, is aimed at ameliorating the present situation in favor of the employees.

In real terms, the lack of balance between supply and demand for jobs as well as the large number of jobseekers has turned the tide against most employers. Presently, 95 percent of the contracts are short-term, while it seems plausible to design permanent or at least five-year contracts (extendable to 10 years) since there are lots of long-term jobs on the supply side.

In a bid to evade pressure from the labor law and pay their employees less than the minimum wage, employers have resorted to interim contracts, which allow them to fire or replace employees easily. However, responding to the question on the reason of their tendency toward short-term contracts, the majority of employers put the blame on unsustainable economic conditions and the unpredictability of the changes to the market.

In its latest report, the labor ministry has announced that almost all of the written contracts are short-term (between one-month to one-year) and the situation calls for urgent measures to be taken to step out the current situation.

Accordingly, in one of its proposals, the ministry, on the one hand, has granted employers all the rights and power to cancel the contracts and, on the other, has called for changing all the short-term contracts to long-term or permanent ones. The ministry regards its act as a “win-win” deal, which encourages both the employees’ representatives and employers to sit at the negotiating table.

It is noteworthy that the ministry aims to reach its target of organizing the job market via modifying the current labor law. “Under the current circumstances, when the supply and demand sides do not match, the government’s duty is to shore up the labor force,” labor minister, Ali Rabiee said.   

However, it remains to be seen how the ministry’s latest decision would impact the job market.  

Lack of required infrastructure in the job market, negative economic growth during the past two years, US-led sanctions, economic mismanagement, and a lack of long-term planning by the previous governments for improving youth employment are among the factors affecting both the employment and job security of youth in Iran, especially of those born in 1980s.

The Rouhani administration is trying to improve the economic conditions and overcome stagnation in a way that the unemployment problem will be resolved, and men as well as women would benefit.

The Statistical Center of Iran (SCI) puts the number of unemployed at 2.5 million. The SCI’s seasonally-adjusted report for the second quarter of this year (June 22-September 22) puts unemployment at 9.5 percent, which shows that the rate has gone down 0.9 percent compared with the summer of 2013.