Title: Iran Moves to Reform Corporate Employment Structures, Aims for Greater Equity and Efficiency
In a significant administrative reform effort, the Iranian government and parliament, in coordination with the Administrative and Recruitment Organization, have placed the restructuring of the corporate workforce and the elimination of intermediary service companies at the top of their agenda for the current year.
The Challenge of Intermediary Service Companies
The widespread use of third-party service companies within the country’s administrative system has created numerous human resource challenges. These arrangements have led to a lack of job security due to short-term and unstable contracts, incomplete payment of insurance and benefits for contract workers, and ambiguity in duties and responsibilities due to a duality between the intermediary company and the executive body. These issues have resulted in reduced productivity and work motivation, making the regularization and removal of these intermediaries a serious demand of the workforce and a persistent concern for members of parliament and executive managers.
The Impact on the Workforce
While these administrative service companies ostensibly supply personnel to state bodies, a significant portion of the funds allocated for employee salaries is often absorbed by the intermediary costs of these firms. This system has created an unfair classification between official employees, who enjoy job security and full benefits, and corporate contract workers, who operate under stressful and unequal conditions. This discrimination not only challenges organizational justice but also contributes to a decline in the quality of public services.
Government Proposes Pathways to Reform
For 2024, the Administrative and Recruitment Organization has presented two primary scenarios to address this complex issue:
Scenario One: Direct Hiring by State Bodies
This model proposes the complete removal of intermediary companies, with executive bodies directly contracting with personnel and paying salaries and benefits. This would increase financial transparency and reduce extra costs. While a positive step toward wage justice, a fundamental problem remains as workers would still be employed on a temporary contract basis, leaving job insecurity unaddressed.Scenario Two: Conversion to Labor Law Contracts
This pathway involves hiring personnel under Article 124 of the Country’s Management and Civil Service Law, offering formal work contracts in accordance with the Labor Law. This would grant workers certain legal rights, such as insurance and severance pay. However, implementing this scenario could present significant challenges due to the differing duties and education levels between service personnel and specialized experts.
A Third, Comprehensive Solution
Experts and parliamentarians have put forward a third scenario, which many consider a more fundamental solution. Under this model:
- Contract workers with university education would be directly absorbed into official, vacant posts within executive bodies.
- Job security and fixed rights would be guaranteed for them.
- Intermediary companies would be completely removed from the administrative cycle.
- The disparity between official and corporate employees would be reduced, thereby strengthening organizational justice.
This approach, by providing conditions for formal employment, is projected to not only alleviate job-related concerns but also lead to increased job satisfaction, reduced stress, and an enhanced quality of government services.
Navigating Challenges and Opportunities
The implementation of any reform scenario is accompanied by both challenges and opportunities. Key challenges include the need to amend existing laws and regulations, a potential increase in the government’s financial burden if workers are formalized, and possible resistance from some managers or bodies to structural change.
Conversely, the opportunities are substantial, promising savings from the removal of intermediaries, increased productivity and human resource motivation, and improved organizational justice and public service quality.
This restructuring is poised to have positive socio-legal consequences, including creating stable job security, increasing financial transparency, guaranteeing the legal rights of contract workers, reducing discrimination, and optimizing the use of human resources to enhance service delivery. This initiative stands as one of the most important structural reforms within Iran’s administrative system, aiming to build a more equitable and efficient public sector.