March 15, 2006
Esfand 24, 1384
LAWS AND REGULATIONS
- Circular on Minimum Wages and Increase of Salaries
in 1385 ..... Page 1
- Regulation on the Manner of Implementation of Labour
High Council's Decree of February 28, 2006 ..... Page 2
- The Manner of Increasing the Wages of Workers
Under Job Classification Schemes ..... Page 4
BUSINESS AND ECONOMY
- Impacts of High Oil Income on Iran's Economy ..... Page 7
- The Challenge of Privatization ..... Page 8
- The Negative Aspects of WTO Membership for Iran ..... Page 9
- Chinese Cheap Car Manufacturers Swarm the Iranian Market ..... Page 10
- $5 Billion of Financing Credits and $1 Billion Cash
for Expansion of Refineries ..... Page 12
LAWS AND REGULATIONS
CIRCULAR ON MINIMUM WAGES AND INCREASE OF SALARIES IN 1385
The Office of the Minister of Labour and Social Affairs
Circular No.122267 issued on March 6, 2006
In implementation of Article 41 of the Labour Law, the Labour High Council held a meeting on February 28, 2006 in presence of the representatives of the government, the workers and employers to determine the minimum wages in 1385.
The following decisions were adopted by unanimous vote, in the said meeting, with due regard to the interests of workers in order to bring their pay to the level of livelihood by taking into consideration the exigencies governing the economic entities, employers and the economic condition of the Iranian society:
1. From the beginning of the new Iranian year 1385 (March 21, 2006), the minimum wages of workers being subject to the provisions of the Labour Law, to be employed under indefinite agreements (employed for indefinite, unlimited period) shall be fifty thousand rials (Rls.50,000) per day.
Note- The minimum daily wage of the workers employed in accordance with the Labour Law, for a definite and limited period, shall be Rls.60,000 per day.
2. From the beginning of the year 1385, other wage levels shall increase by adding Rls.5,000 per day plus ten per cent.
3. A daily sum of Rls.1,250 shall also be payable to the workers in 1385 if one year has lapsed since their employment or from the date their salary was increased during last year. The said increase shall be known as annuity.
Note 1- The above sum shall be used as annuity also in determining the salaries of the workers working under job classification schemes approved by the Ministry of Labour and Social Affairs. The above figure must be inserted in Group I wages in compliance with the instructions given by the Ministry of Labour in respect of job classification schemes.
Note 2- Seasonal workers' wages in 1385 shall be increase in proportion of the duration of their service during 1384.
4. In order to supply the staple commodities to workers in 1385, a monthly sum of Rls.100,000 must be paid by employers in respect of every worker (whether single or married) to an account to be subsequently announced by the Ministry of Labour and Social Affairs.
5. The regulations on the manner of increasing the wages set forth in Clause 1 of this Circular and the Note appended thereto, as well as in Clause 2 in respect of those jobsites complying with a job classification scheme where the workers receive a compensation in respect of every piece they produce and the manner of increasing their grade, shall be in accordance with the pertinent instructions to be given by the Department General of Supervision of Compensatory Systems of this Ministry.
6. The jobsites being subject to the provisions of the Labour Law, for the purpose of regulating payment of wages and benefits on the basis of efficiency and increased production and in order to create incentives among their workers may, in addition to implementation of this Decree, provide for payment of wages and benefits on the basis of collective agreements with their workers. Such agreements shall enter into force upon confirmation of same by the Ministry of Labour and Social Affairs.
Seid Mohammad Jahromi (Sgd.)
* * *
REGULATION ON THE MANNER OF IMPLEMENTATION OF LABOUR HIGH COUNCIL'S DECREE OF FEBRUARY 28, 2006
Circular No.123191 issued on March 7, 2006
In implementation of the provisions of Clause 5 of Circular No.122267 dated March6, 2006 issued by His Excellency, the Minister of Labour and Social Affairs in respect of a Decree of the Labour High Council dated February 28, 2006, the following provisions are hereby declared on the manner of implementation of the said Decree.
1- The Manner of Calculation of the 10% Increase Set Forth in Clause 2 of the Circular
Compensation made in respect of every piece of production to the workers in 1385 must be increased by adding 10% to the piece work compensation paid to all workers (whether working under an indefinite agreement or under a time contract). Should the said workers receive a fixed amount, in addition to the piece work commission, also the said fixed amount must be increased by 10%.
Note- In cases where the amount of compensation for production of a piece of product shall be determined on the basis of the fixed part of the wage i.e. the piece work commission shall be a percentage of the fixed amount, in such case only the fixed portion of the wage shall be subject to 10% increase (this being due to the fact that in the above case, also the piece work commission shall increase by 10%, ipso facto).
2- The Manner of Including the Fixed Amounts Provided in the Circular in the Wages
In addition to the 10% increase in the fixed amount of wages, the said fixed amount shall further be increased by Rls.5,000 per day. In cases where certain workers shall not receive any fixed amount, then the said daily sum of Rls.5,000 shall be paid to them in the form of fixed wages.
In fixing the above sum in respect of the workers working under definite agreements for a limited period, in 1385, in the workshops (jobsites) having a job classification scheme, actions will be taken according to Circular No.123086 dated March 7, 2006.
Note- The total amount of fixed wages and piece work compensation for working the legal hours of work in a month (of 30 days) in respect of workers working under indefinite and unlimited contracts must not be less than Rls.1,500,000 and in respect of workers working under definite contracts for a limited period must not be less than Rls.1,800,000.
3- Payment of Annuity
In addition to increase in wages, piece work workers, whether working under job classification schemes or not, shall be eligible to receive the annuity payable to workers according to Clause 3 of Circular No.122267 dated March 6, 2006 of the Honourable Minister of Labour and Social Affairs.
General-Manager, Supervision of Compensatory Systems
* * *
THE MANNER OF INCREASING THE WAGES OF WORKERS UNDER JOB CLASSIFICATION SCHEMES
Circular No.123086 issued on March 7, 2006
The following are the regulations on the manner of increasing the wages of those workers who work in workshops having job classification schemes as provided under Clause 5 of Circular No.122267 dated March 6, 2006 issued by the Honourable Minister of Labour and Social Affairs:
A. Workers Employed Under Indefinite (Unlimited) Employment Agreements
10% of the wage at the end of 1384 plus a daily sum of Rls.5,000 must be added, from the beginning of the year 1385, to the wages of those workers who work in accordance with an employment agreement concluded for an indefinite period, as follows:
The last basic daily wage in 1384×1.1+5000=the basic daily wage in 1385
B. Workers Employed Under Definite (Fixed Period) Employment Agreements
10% of the wage at the end of 1384 plus a daily sum of Rls.15,000 must be added, from the beginning of the year 1385, to the wages of those workers who work in accordance with an employment agreement concluded for a definite and fixed period in a workshop having a job classification scheme.
Note- The salaries and wages of workers to be employed under a contract for a fixed period, after the beginning of the year 1385, in a workshop having a job classification scheme, shall be fixed according to the equation in Clause C below.
C. The Manner of Fixing the Rial Co-Efficient and Table of Wages in 1385
In order to draw up the wage table of workshops having a job classification scheme, the fixed part of wage equation shall be multiplied at 1.1 and 5000 shall be added thereto.
Yn shall mean the wages of group n
a shall mean the last rial coefficient in 1384
Xn shall mean the scores of group n, and
b shall mean the basic and minimum salary of the workshop in the year 1384.
The above wage table, in 1385, shall be the basis and criteria for recruitment, increase of grade, fixing the salary, grade, etc. in the workshop concerned.
Note- Considering that the wages of workers employed under fixed term contracts shall be Rls.10,000 more than the wages of workers employed under indefinite contracts in workshops having job classification schemes, therefore, in fixing the wages of workers employed for a limited period, the amount of 15,000 must be used instead of Rls.5,000 to the fixed part or the minimum wages of a workshop having a job classification scheme, i.e. the workers employed for a fixed period, in the such workshops, shall always receive Rls.10,000 per day more than the workers employed for an indefinite period.
D. Impact of the above Increase on other wage levels
Other items of wages, such as the wage allocable to grade, benefits for retention, annuity, etc. must be increased by 10%, as of March 21, 2006, compared with payments at the end of 1384.
Note 1- Fixing the items of posting benefits, difficult conditions of work, wages of new grade, and retention benefits, in 1385, shall be subject to the new coefficient to be determined for 1385.
Note 2- The base wage payable in 1385 under the Table in Clause E of this directive shall not be subject to the 10% increase.
E. Provision for Enforcement of Note 1 of Clause 2 of the Circular Concerning Base Rate in 1385
The table of base rate in the 20 wage-groups in 1385 shall be as follows:
All personnel who, by March 21 2006 and thereafter shall have a job record of at least one year, or one year has passed since their last promotion, shall be granted one higher group, in proportion with their job category, with the calculation of the rate stipulated above.
Table of Base Rates for Groups in All 20 Wage-groups (Rls. per day)
Group 1 2 3 4 5 6 7 8 9 10
Base Rate 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700
Group 11 12 13 14 15 16 17 18 19 20
Base Rate 1700 1850 1950 2050 2150 2250 2350 2450 2550 2650
F. Provisions for Enforcement of Clause 4 of the Circular Concerning Wages Rises Resulting from Promotion
In all workshops where a job classification plan approved by the Ministry of Labour and Social Affairs is being enforced and implemented, the difference between the wages of the previous group with the new group must be paid at the time of promoting the personnel as a compensation resulting from such promotion. In other words, the wage of the promoted worker, from the date of promotion shall actually be the new wage of the new group. The basic wage of the said workers will be the same wage they were receiving prior to promotion, except in cases where according to the job classification scheme in force, a sum of money will be deducted from the wages of the said individuals due to lower levels of education in which case the wages will be rectified in case the said workers will be able to obtain the required educational certificate due for their group.
Note 1- In the workshops where according to their normal procedure, in addition to the rate of wage of the new group, the rate of the previous group will also be paid, the same normal procedure will be followed.
Note 2- In workshops that are not covered by a yet approved jobs classification scheme, payment of additional wage resulting from promotion shall be made in accordance with the general wage regulations and the norms in the workshop.
A. Karam'beighi; Director General-Supervision of Compensatory Systems
BUSINESS AND ECONOMY