Observation (CEACR) - adopted 2007, published 97th ILC session (2008)

Protection of Wages Convention, 1949 (No. 95) - Iran (Islamic Republic of) (Ratification: 1972)

Further to its previous comments, the Committee notes the Office report following the mission to the Islamic Republic of Iran undertaken from 26 October to 1 November 2007. The six-day mission was scheduled as a follow-up to the discussion concerning the application of the Convention that took place in the Conference Committee on the Application of Standards in June 2007. As requested by the Conference Committee, the conclusions of the ILO mission relating to the application of Convention No. 95 are reproduced below.

The Committee notes that the main purpose of the ILO mission was to obtain a better sense of the nature and extent of the problem of wage arrears, principally by collecting concrete figures on wage arrears and the number of affected workers as well as up to date information on measures taken by the Government in order to tackle the problem of delayed payment of wages. It also notes that the mission included a senior statistician from the ILO Bureau of Statistics with a view to evaluating any available statistical data relating to the non-payment of wages and advising the Government on how to improve the collection of such data.

The Committee takes note of the main findings and conclusions of the ILO mission concerning the problem of wage arrears which read as follows:

IV.           Main findings

117. The mission had a full range of intense and instructive meetings with government officials and representatives of other public institutions, employers’ and workers’ organizations, and civil society associations. Three major issues were addressed in a series of joint or separate group meetings: (i) the application of Convention No. 95 with special reference to wage arrears; (ii) the application of Convention No. 111 with special focus on gender equality and the protection of ethnic and religious minorities; (iii) freedom of association issues including the situation of employers’ and workers’ organizations in the country. The Government once again fully cooperated with the mission enabling it to complete its work. The dialogue was frank and information was forthcoming.

1. The problem of wage arrears

118. The principal purpose of the mission was the collection of statistical information on the problems of non-payment or delayed payment of wages in industries experiencing financial difficulties. In this regard, the mission obtained a significant amount of information and data allowing a better understanding of the socio-economic context in which the phenomenon of wage arrears persists. The Islamic Republic of Iran has embarked on an extensive programme of privatization and therefore its national economy is clearly in transition. Most of the problems it is currently facing are structural and are not expected to disappear in the immediate future. International competition and the country’s current political context heavily impact on its export trade and further deepen the crisis in the textile industry. The Government has continued to inject billions of dollars in the form of financial aid to enterprises in difficulty due to the social implications for employment and unemployment as well as the increasing demographic growth rate.

119. At present, statistical standard forms or labour inspection procedures are not designed to capture specific information on wage arrears (e.g. sectors or regions affected, delay in weeks or months, etc.) and the only available data that can provide a rough idea of the extent of the problem come from the number of individual or collective complaints filed with the dispute settlement boards. Concrete proposals were made in this respect to the officials of the Statistical Centre and of the Labour Market Information and Statistics Centre of the Ministry of Labour and Social Affairs and reassurances were given that wage arrears would be better monitored in the future.

in the Islamic Republic of Iran

Scale of wage arrears
Estimated 85,000 workers (out of total workforce of 7 million) experiencing delay in the payment of their wages in the last 12 months
Labour inspection activities (results between March–September 2007)
Number of total inspection visits				179 584
Number of inspections on wage issues (10 per cent of all inspection activities)				18 450
Available remedies
Legal decisions		No. of cases			No. of workers concerned
Inquiry boards		28 240			32 777
Dispute settlement boards (following the appeal of 10,206 inquiry board decisions)		7 870			9 700
Financial assistance provided to enterprises in difficulty
Amount of subsidies	7 037 831 million rials (approx. US$755 million)
Number of jobs saved	422 360

120. Based on the number of cases filed with and settled by the inquiry boards and dispute settlement boards, it is estimated that approximately 85,000 workers were affected by wage arrears in the last 12 months. The largest number of complaints (4,936) were filed in Esfahan province and the lowest number (83) in North Khosaran province. The 2007 statistics represented a 23 per cent decrease as compared to the number of complaints filed in 2006 and a further 11 per cent decrease as compared to those filed in 2005. With respect to enforcement, 10 per cent of all labour inspection activities concerned wage issues, mostly cases referred by the dispute settlement boards for follow-up action. Out of a total 10,200 plants in the textile sector, around 100 plants reported occasional difficulties with the payment of wages. In the last 12 months, the situation improved in certain provinces, such as the Qazvin province, but problems persisted elsewhere. The mission was provided with general information that other branches of economic activity, such as the sugar cane industry, are experiencing pay problems, but it was not possible in the time available to obtain any concrete information on the situation in sugar cane factories.

…

V. Conclusions

Protection of wages

137. Based on the oral and written information obtained, the mission concludes that, although the Government is continuing to take action to support enterprises experiencing difficulties with wage arrears, the problem continues to affect large numbers of textile workers. Other industrial sectors, such as the sugar industry, are most probably experiencing similar problems. The Government admits the existence of the problem but maintains that it is a limited and unfortunate side-effect of expanding privatization, low productivity and competitiveness of the domestic textile sector and negative external factors. The mission is mindful of the continued efforts of the Government to keep enterprises afloat and save jobs by massively subsidizing enterprises that are experiencing difficulties. The mission believes, however, that the Government must address the structural deficiencies of the national economy with a long-term strategy for strengthening the productivity and sustainability of private enterprises. It must bolster and speed up the current privatization efforts on the way, providing economic space for enterprises and continue to strengthen democratic institutions, in accordance with article 44 of the Constitution of the Islamic Republic of Iran and article 145 of the Law of the Fourth Economic, Social and Cultural Development Plan, 2005–09, which was enacted on 1 September 2004. The mission reaffirms the importance of closely monitoring the evolving of the situation with respect to wage arrears, and, in this connection, emphasizes the need for reliable statistics. The mission therefore encourages the Government to continue to avail itself of the technical assistance of the Office in relation to data collection.

Having duly examined the Office report, the Committee notes that the discussions with government officials, public institutions and employers’ and workers’ organizations were once more open, direct and constructive and helped to further clarify the situation with regard to wage arrears experienced in certain sectors of the economy of the Islamic Republic of Iran. While noting that action is being taken by the Government to address problems faced by enterprises experiencing wage arrears, the Committee remains concerned about the fact that the problem of unpaid wages continues to affect tens of thousands of textile workers. It also notes that the problem would appear to occur in other branches of economic activity such as the sugar cane industry. Noting that the situation is at present inadequately monitored as standard documents used by the labour inspection services are not designed to capture information on wage arrears, the Committee requests the Government to take the necessary steps to ensure that the ongoing situation of unpaid wages is kept under close supervision and constant assessment through the systematic collection of relevant information. The Committee also requests the Government to continue to provide detailed information on the evolving of the situation as well as on any new measures taken or planned with a view to settling all outstanding payments and preventing the recurrence or expansion of the problem that clearly contravenes the letter and the spirit of Convention No. 95.

[The Government is asked to reply in detail to the present comments in 2008.]