Date: 25 September 2023
Important Update: Starting from March 21, 2023, promissory notes procured by employers will no longer be recognized by law. Employers using these instruments might risk court dismissals if complaints are raised.
A few months ago, Hossein Ali Raeiati Fard, the Deputy Minister of Labor Relations of the Ministry of Labor, informed the public about amendments to certain provisions of the Labor Law. This was primarily geared towards strengthening job security for employees. Crucially, employers are no longer entitled to request promissory notes or checks from their staff in employment contracts.
Shedding light on this subject, senior labor relations expert, Nima Partovi reiterated the importance of this transition by emphasizing that as of March 21, 2023, the legal status of promissory notes obtained by employers would be nullified, and legal ramifications await those who defy this directive.
What would be the Alternative?
In the wake of this change, a viable alternative has been introduced - the backup document. Employers can seamlessly utilize backup documents in place of the traditional checks and promissory notes to secure employment contracts.
A significant portion of employers currently leverage guarantee documents, such as checks and promissory notes, especially when they entrust company assets and properties to their employees. While this shift might seem daunting for some, the backup document promises ease of transition. Not only does it offer the same, if not better, security, but it is also tailor-made according to specific business requirements.
Why the Backup Document?
There are some distinct advantages to the use of the backup document:
1. Transparency and Clarity: Employee obligations to employers are meticulously detailed, ensuring everyone is on the same page before signing a contract;
2. Legal Assurance: With embedded legal guarantees, employees fully understand and acknowledge their responsibilities towards employers;
3. Swift Execution: In cases of contractual breaches by employees, the backup document ensures quick legal action and securing of rights by employers; and,
4. Strengthened Ties: This transition is expected to bolster a more logical and lasting relationship between employees and employers.
In conclusion, as we experience a transition to a new era of employer-employee relations, both parties are presented with the opportunity to navigate the impacts of the replacement of promissory notes proactively and collaboratively. The dawn of the backup document signifies not just an end to an old practice, but the beginning of a more secure, transparent, and beneficial working relationship.
