Law on Trade Union Note on Article 87

Law on Trade Union System Note on Article 87

Executive By-Laws on How to Grant and Renew Business Licenses and How to Track Trade Union Members in Cyberspace (Subject to the Trade Union System Law's Notice of Article 87)

Article 1- Definitions:

a- An online shop is a business unit managed by a real or legal person that sells merchandise (goods or services) directly or indirectly to wholesalers, retailers, and customers in cyberspace, in whole or in part.

b- Network marketing is a form of retail distribution in which a legal person hires people from far away to act as marketers, using social media to sell his or others' goods directly to consumers. Through adding other marketers and creating multi-level sales, each marketer will broaden and increase his sales.

c- marketer: any individual apart from the network marketing company who receives a reward or commission (a percentage of the sales of products) either through direct sales of products to the customers or through increasing the sales by training the marketers and supporting them.

d- Profitability plan: a plan on how to market, calculate, and pay the commission of the marketers against selling the products of the network marketing company.

e- consumer: any individual who receives a product in response to paying money with non-commercial purposes and only personal reasons.

f- highly-used goods: products and services that are included in the basket of a wide range of people of the society or are bought at least four times a year.

g- Business licensing authority source: National Trade Union

h- The symbol of electronic trust: is a sign that is granted by the Ministry of Industry, Mines and Trade in accordance with the regulations to the website of internet business and network marketing and its validity will be in accordance with the validity period of the business license.

i- Trades system: Electronic system for issuing guilds licenses at https://iranianasnaf.ir/

Article 2- Online shop:

Article 2- By linking the guild system and the e-commerce development center system, the Iranian Guilds and Merchants Center and the e-Commerce Development Center are expected to provide the entire process of issuing a virtual store license and granting an electronic symbol in compliance with Article (3) of this regulation. To allow concurrent access to the applicant's documents in the systems specified. The confidence symbol of the virtual store will be awarded after the business license is issued, without the need to seek re-certification from the applicant.

Article 3- stages of getting a license of online shop

a- The claimant must establish an online website in compliance with the E-Commerce Development Center's check list.

b- The applicant must register his or her application (identity, job, and product information) in the E-Commerce Development Center's system (referral of the application immediately to the guild system based on the list of the Guilds and Merchants Center of Iran).

c- Within a period of fifteen days, the union must classify the candidate, complete the file in compliance with Article (4) of this regulation, and submit a response. (Failure to express an opinion within the stated time frame is regarded as approval of the request.)

d- Within three months of approving the application, the applicant must upload the documents mentioned in Article (4) of this regulation to the guild system.

Note: The union is expected to request information from all of the bodies mentioned in Article (4) of this regulation at the same time.

e- Within a period of fifteen days, issuing and applying the business license to the applicant (after completing the file and comparing the uploaded documents with the original one).

f- Within three days of acquiring the business license, the E-Commerce Development Center will award the sign of electronic trust.

Article 4- Conditions and documents for issuing an online shop license:

A. General

1. The applicant's office or legal residence is recorded by a certificate of possession or a contract.

2. Individual competency certificate from the Islamic Republic of Iran's police departments.

3. Based on the payment of the final tax debt, a certificate from the appropriate tax administration is issued (subject of Article "186" of the Law on Direct Taxes).

4. Certificate of completion of labor and business laws training courses (subject of Article "30" of the Trade Union Framework Regulation, paragraph (n)).

5. The Electronic Commerce Creation Center has given its approval to the website (subject of Article "3" of the Statute of the Electronic Commerce Development Center)

6. For Iranian residents, a photograph of their identification card and national card; for foreign citizens, a photograph of their passport and work permit is needed.

7. For men under the age of fifty, a picture of their conscription system end-of-service card, permanent medical exemption, or certificate of employment is required.

B. Exclusive

1. From health clinics, obtain a medical test card and a certificate of health qualification (for classes subject to the amendment of Article 13 of the Food, Beverage, Cosmetics and Hygiene Law)

2. Specialized and professional licenses, technical diplomas, or related university diplomas, or the introduction of an individual who meets the requirements (for classes subject to the note of Article 13 of the Law on Trade Union System).

3. The board of directors' permission to grant a business license in the name of the managing director or one of the board members, in compliance with the articles of association and the most recent advertising of the company registry in the official newspaper (for legal entities).

4. Notarized approval from other partners for the issuance of a business license in one of the partners' names.

Note: The things mentioned in rows (1), (2), (6), and (7) paragraph (a) and rows (1) and (2) paragraph (b) of this article are replaced by holders of valid business licenses who are also applicants for virtual business licenses for online sales of their union unit goods.

Article 5 - If the union takes steps to revoke the virtual store's license in compliance with the labor union system's laws and regulations, the e-commerce development center must take action to cancel the electronic sign.

According to the announcement of the e-commerce development center regarding the revoking of the website, the union will also revoke the business license in compliance with the regulations.

Part 2: Network Marketing Company

Article 6- How to Get a Network Marketing Company License:

A- The applicant's application (identity details, as well as a list of goods and a profitability plan) is registered in the guild system.

B- The union reviews the application and delivers a response within a period of fifteen days (failure to announce an opinion within the mentioned period is considered as acceptance of the application).

C- Within three months of approving the application, documents listed in Article (7) of this regulation should be uploaded in the guild system.

Note: The union is expected to request information from all of the bodies mentioned in Article (7) of this regulation at the same time.

D- The secretariat of the committee, in accordance with Article (15) of this law, approves the profitability plan and relevant devices.

E-The applicant registers the organization as a special joint stock company with the subject of network marketing with the letter of introduction of the committee's secretariat pursuant to Article (15) of this regulation after approval of the profitability plan.

F- In compliance with Article (26) of this law, the company's website will be launched.

G- The business license will be issued and sent to the applicant within fifteen days (after completing the file and comparing the uploaded documents with the original).

H- Within three days of receiving the business license, the Center of Guilds and Merchants of Iran bestows the sign of electronic trust.

Article 7- Conditions and documents for issuing a network marketing license:

1- The company's head office's ownership document or lease.

2- Approval of the profitability plan and related software by the committee's secretariat, as required by Article (15) of this bylaw.

3- The board of directors' decision to issue a business license in the name of the managing director or one of the board of directors' members, in compliance with the articles of association and the most recent amendments in the official newspaper of the company registry.

4- Individual certificates of competence for members of the board of directors and the managing director of the Islamic Republic of Iran's law enforcement force.

5- Possessing the requirements and documents mentioned in Article (4), paragraphs (3), (4), (6), and (7), row (a).

6- Holding a production license or a contract representing the producer's sales representative (the contract with a foreign producer or his representative must be sealed with the seal of the Chamber of Commerce and the representative office of the Islamic Republic of Iran in the country of origin).

Note: A network marketing company's business license must be given in the name of the CEO or one of the board of directors, along with the above documents and the address of the company's headquarters. Obtaining a certificate of individual competence for the branch manager (non-marketer) from the law enforcement force of the Islamic Republic of Iran and notifying the secretariat of the committee subject to Article 15 of this regulation is required to issue the relevant letter of introduction in order to establish and register branches in the Companies Registration Office.

Article 8-The following things should be included in your network marketing profitability plan:

A- The commission payment sum as well as the incentive for the number of levels achieved.

B- Determining the monthly purchasing price of the marketer in order to be eligible for commission and compensation.

C- The amount of profit made at the retail level.

D- The business commission is paid on a monthly basis.

E- Restricting the amount of money paid out in commissions and bonuses

Article 9- During the network marketing process, the network marketing company must follow the following guidelines:

A- A strategy for benefit.

B. Selling goods from a catalog in accordance with pricing guidelines.

Note: The Guilds and Merchants Center of Iran allows network marketing companies to publish a list of their goods, their costs, and their warehouse addresses.

C- You are not obliged to buy, spend, or accept money from the marketer in order to enter the marketing network.

D- Do not allow advertisers to purchase more goods than they can sell or consume in a given time frame.

E- The amount of monthly product sales to marketers needed to be eligible for discounts and commissions must be adjustable, depending on the report that the products are stored with the marketer.

F- Goods must be marketed directly to the marketer, and sales to another marketer must be made through the marketer.

G- Marketing fees charged exclusively on product purchases in exchange for higher levels of mutual involvement in recruiting and educating new marketers rather than recruitment.

H- Payment of discounts or incentives to advertisers who are not selling the company's goods.

I- Return of sold items that can be resold and reimbursement of the amount paid for the returned goods minus the shipping cost in the event that the marketer's contract is terminated (maximum within 12 months prior to the date of termination of the contract). Return of product and retail benefit credited to the marketer at a consumer price, as well as non-refundable taxes.

Note: A network marketing company will subtract the commission charged for returned products from higher level marketers' next commission.

J- Using the country's banking system to perform all financial transactions (such as buying, selling, and paying commissions) in the company's name.

K- Providing each marketer with a quarterly turnover report on his financial operations.

Article 10- Marketers do not have the right to hold meetings outside of their branches. The licensee is in charge of managing the branches as well as the marketers' operations, such as false advertising and adjusting the sales plan.

Article 11: It is illegal to hire marketers under the age of 18, as well as staff of executive bodies and labor unions in charge of supervising network marketing firms.

Article 12- A network marketing company must enter into a contract with a marketer based on a sample contract form based on the Supervisory Committee's model, and issue a photo ID card stamped with the company stamp containing the marketer's name and surname, father's name, national code, Unit code, marketer ID, and company name, as specified in Article (15) of this regulation.

Note: To receive a single code to conclude and cancel the deal, the network marketing company's website must be permanently connected to the guild system.

Article 13- The network marketing corporation is required to hold a free training course for other marketers with the involvement of higher level marketers, including training in this bylaw, network marketing principles, and the company's ethical charter.

Article 14- In the event of liquidation, the network marketing firm must behave in such a way that it fulfills its responsibilities to the advertisers and customers who bought the goods. After liquidation or bankruptcy, the network marketing corporation must apply its business license to the union for revocation within fifteen days.

Part 3: How to monitor

Article 15- In order to monitor the performance of network marketing companies and virtual stores in terms of the provisions of the Trade Union Law, as the case may be, committees composed of representatives of the Iranian Trade Unions and Trade Center (as chairman), e-commerce development center, Ministries of Information, Communication and Information Technology, The police force, the Iranian Chamber of Trade Unions and the trade union related to the following tasks are formed. The committee has a secretariat located in the Center for Trade Unions and Merchants of Iran and is responsible for coordinating and carrying out the required correspondence.

The Supervisory Committee's duties include:

A- Preparing a template form (including the marketing contract and the articles of association of the network marketing company)

B- Publicizing the consumer goods group's list.

C- Reviewing and providing opinions on the applicants' profitability strategies for securing network marketing company licenses, based on the Iranian Guilds and Merchants Center's referral.

D- Deciding the virtual store and network marketing rating parameters.

E- Conducting investigations into the performance and handling of violations by virtual stores and network marketing companies in compliance with applicable regulations.

Article 16- The electronic trust symbol consists of three colors: green, yellow, and red, each of which indicates the license holder's performance status as follows:

Green: The activity's legality.

Yellow: The action is in violation of the law, and you have one month to correct the issue.

Red: Temporary closure for up to six months.

Article 17- It is deemed a breach by virtual stores and network marketing firms if any of the following circumstances occur:

A- Failure to obey the virtual store and network marketing business guidelines.

B. Failure to pay the union's membership fee.

C-Failure to carry out the High Supervisory Board's resolutions and the Committee's decisions as set out in Article (15) of this By-Law.

D- Failure to carry out the trade union units' obligations as outlined in the trade union system legislation and related bylaws.

Article 18- Measures to Investigate Abuses:

A- Deciding and notifying the holder of the business license in cases of breaches.

B- Obtaining the security (the holder of the business license can submit his documented defense within fifteen days from the date of notification).

            Note: If members refuse to pay their membership dues, the Rasa Union will take action in compliance with Article (19) of this regulation.

Article 19- The following steps will be taken in the event of a violation:

A- If it's the first time, a notice and file entry, as well as a 15-day deadline to address the objection.

B- If it’s the second time, the color will change to yellow (in case of repetition)

C- The color will be red for the third time.

The electronic symbol reference may be used to adjust the color of the symbol upon announcement by the supervisory committee or the union (as the case may be and in compliance with the provisions of this regulation). If the union unit's operation complies with the terms of this law, the symbol's color will change to green within three days.

Article 20- In the case of widespread abuses, the Supervisory Committee has the power to close the union unit for a period of six months while concurrently investigating the matter.

Note 1: If the trade union unit closes, the holder of the business license will not be able to establish a new obligation, and if he does not take steps to withdraw the objection or compensation before the end of the specified period, the supervisory committee will be required to cancel it after fifteen days' notice. Send an application for his license via the association.

Note 2- A trade union delegate has fifteen days from the date of notice to apply his or her objection to the closure of the trade union unit to the Secretariat of the High Supervisory Board. In accordance with the rules, the Secretariat is required to process the complainant's complaint within fifteen days.

Article 21- When the validity period of the business license expires, the union is forced to send a one-month notice to renew the license. The color of the electronic trust sign will change to yellow with the declaration of the union, and if the license is not renewed, the union unit will be considered a unit without a license.

Section 4- Certain laws

Article 22- All enquired bodies subject to this legislation are expected to give a final opinion within fifteen days of receipt of the inquiry. The declaration of consent must be clear and without conditions; the opposing opinion must also state and record the legal reasons for its position. Otherwise, if the opinion is not released before the deadline, it will be treated as a constructive comment, and the inquiry bodies' negative comments received after the deadline will not preclude the issuance of a license.

Article 23: Reviewing the license applicants' complaints:

1- If the union refuses or opposes the issuance of a business license, the applicant must be informed in writing by the E-Commerce Development Center about the virtual stores within 15 days, along with the recorded reasons.

2- If the claimant objects, he or she has twenty days from the date of receipt of the response to file a written objection with the Iranian Chamber of Trade Unions.

3- The applicant's objection must be addressed by the Iranian Chamber of Guilds within 15 days, either directly or via the guild chamber of the city where the guild member's office or residence is located.

4- Whether the union or the claimant disagrees with the Iranian Chamber of Trade Unions' view, they have twenty days from the date of notification to express their dissatisfaction to the High Supervisory Board's Secretariat. The High Supervisory Board's Secretariat is expected to consider the plaintiff's complaint and issue a decision within fifteen days.

Article 24- The following are the conditions for renewing a license to open a virtual store and a network marketing company:

1- The applicable tax administration's certificate that the tax debt has been paid in full (subject to Article (186) of the Law on Direct Taxes).

2- Holding a current medical examination card (for classes protected by the legislation amending Article (13) of the Food, Beverage, Cosmetics, and Hygiene Law to include virtual stores).

3- The partners' notarized consent if the previous consent has expired or been withdrawn (in civil partnerships for the virtual store).

Note: After the issuance and renewal of the business license, the competent judicial authorities are responsible for resolving conflicts and legal claims between the parties, both actual and legal.

4- One picture of an advertisement from the Islamic Republic of Iran's official newspaper, in case the organization undergoes any changes (for legal entities).

5- A certificate of completion of labor and business laws training courses (subject to paragraph (n) of Article 30 of the Trade Union System Law).

Article 25- It is unlawful for business license holders to falsely advertise their goods in order to attract buyers. Otherwise, they would be dealt with in compliance with Article (68) of the Law on the Trade Union Structure. The executive regulations of Article (7) of the Consumer Protection Law include examples of false propaganda.

Article 26-The following details must be prominently displayed on the network marketing company's website.Network marketing companies are also expected to acquire the following electronic confidence symbol in the case of internet sales:

A- The legislation governing labor unions, as well as network marketing rules and a benefit plan.

B- Product or service technical requirements and actual functional characteristics.

C- E-mail address, website, phone number, or some other means by which the customer may contact the seller in the event of a problem.

D- The consumer is responsible for all expenses (including the price of goods or services, the amount of VAT and shipping costs).

E- Contract terms and procedures, such as the order and method of delivery, execution, termination, referral, and after-sales operation.

Note: The consumer's cancellation of the purchase of products and acceptance of services must be reported in a recordable and citation manner, such as by sending a letter or sending an e-mail.

F- Inventories’ up to the storage day.

G- Developing a complaint and grievance portal with the ability to assign a tracking code.

Article 27- Any improvement in the virtual store's business operation, as well as the articles of association, benefit plan, and software of the network marketing organization, made in accordance with Articles (4) and (7) of this regulation, is unrestricted.

Article 28- Customers will be told about the legality of trade union units' actions based on the color of the electronic confidence sign and the details obtained by contacting the guild system or the E-Commerce Development Center directly.

Article 29- This bylaw was drafted by the Iranian Chamber of Trade Unions in collaboration with the Supreme Supervisory Board Secretariat and the Ministries of Information, Communication, and Information Technology in order to enact the notice of Article (78) of the Trade Union System Law, which includes Article 29 and Note 13. On July 5, 2015, the Minister of Industry, Mines, and Trade approved the seventh session of the High Supervisory Board.