Ban on Re-Employment of Retirees, Blessing or Curse?

Ban on Re-Employment of Retirees, Blessing or Curse? Ban on Re-Employment of Retirees, Blessing or Curse?

Based on a decree to state organizations, any re-employment of retired workers from this year (started March 21) would be illegal unless endorsed by a top official and approved by a government special committee.

The Social Security Organization (SSO) as the retirees’ main pension provider is also in favor of the initiative but the catch is that the government is already so entrenched with retirees that to simply rid itself of them would mean “organizational suicide.” While the plan looks promising for the youth with more opportunities, pundits opine that the exodus of retirees from state-controlled organizations would hurt the economy as a whole and stall big projects in the oil industry and other enterprises.

 Social Security Law

The ban seems to originate in the social security law which states that all workers who reach the age of retirement should be barred from prolonging their stay through re-employment in any ministry or public sector office. Ali Dehghannia, deputy head of the Retirees’ Association, however, says in an interview with Persian newspaper Shargh, that “to peremptorily implement the law would be to deprive state bodies from the vast experience of veteran employees.”

‘’The 10th clause of the Renewal of Industries Act states that employers can retire their staff after 25 years of work experience but this is while several retirees are still working as advisors in many government offices,’’ Dehghannia says.

 Gradual Layoff

On the other hand, there is concern that the abrupt dismissal of seasoned workers can result in some unfinished projects being halted altogether. Hossein Sasani, head of the Sustainable Development Group Work at the Academy of Sciences advocates a gradual layoff of experienced officials. ‘’Firing retired employees rapidly and replacing them with a young workforce can halt construction projects and reduce efficiency in the public sector,’’ Sasani says. He adds that higher costs and lower quality are some of the immediate consequences of the plan.

Referring to the alarming rate of youth unemployment, Sasani acknowledges that ‘’government has no other choice’’ but to hire young people; but says the ‘’policy should be mitigated by making use of experienced workers as well.’’ Another drawback of the plan is the authority of top managers for preferential treatment in exceptional cases. ‘’This gives the managers the prerogative to issue permission for re-employing some of the retirees which in turn can give rise to nepotism and cronyism,’’ he maintains.  The key is to combine experience with innovation.  


Striking a balance between solving the unemployment crisis and safeguarding the old wisdom of the veterans, experts say, should be the mantra guiding government policies.  

‘’Currently, the aging workforce is capable of executing major tasks and at the same time the government can employ young workers to enhance efficiency,’’ says Mahmoud Jamsaz, an economic expert. ‘’ At the moment we need to preserve the highly skilled workforce to keep the ongoing projects up and running.’’

‘’In the meanwhile, unemployment is a big problem for the current administration,’’ he says. There are over four million unemployed people in the country and if the government cannot create more jobs this figure can double.’’

He traced the reasons for unemployment to the lack of jobs and some jobs being destroyed due to the negative economic growth rate. ‘’During the previous administration, employment rate fell to zero.’’

“ Iran has a bigger  skilled workforce compared to a country like Indonesia but the reason for the lackluster job growth could be traced to lack of advanced equipment that can partly be blamed on the sanctions imposed on the country,’’ he maintained.