Egypt: Egypt's New Labour Law

Last Updated: 5 July 2018
Article by Youssry Saleh & Partners

Egypt's government has completed the amendment of the new Labor Law including the Laws of Labor and Trade Union Organizations, in a way consistent with the current economic conditions of the country and its social reflections on all workers sectors as the Egyptian workers are considered the cause behind the real development, which will build the homeland and work on its prosperity; such workers bear the economic decisions issued in 2016, where the government ensured that such Laws will have a final and effective solutions for the workers issues in Egypt especially those between the employer and the employees.

As of May 2018, the new Egyptian Labor Law legislation and amendments are being discussed by the parliament to be issued, where such new amendments were prepared by full consensus between the parties to the production process. Such new legislation aims at handling and making the best effective remedies to the negative aspects of the current law which is Law No.12 of the year 2003, as one of the highlighted points in the new draft is encouraging youth to be engaged in the private sector, through developing fixed guarantees for the termination of the employment relationship.

On the other hand, the new Labor Law draft included the establishment of Specialized Labor Courts for achieving speedy justice in the labor cases, it also considered violations arising from application of the provisions of the laws and regulations governing labor relations, the rights of insurance to workers, their beneficiaries and Trade Union Organizations.

"The Form 6"

  • The new Draft Law abolished what is known as "Form 6", which is one of the barriers towards working in the private sector, where "Form 6" is a form submitted by the employer for the insurance or government agencies to prove the end of the worker service, some businesspersons force youth to sign such form before signing the Employment Contract. The new Labor Law Draft amended the regulations of such form, as it requires to be approved by the Ministry of Manpower. The resignation of the worker must be approved from the Competent Administrative Authority whereby this guarantees the issuance of prior resignation will be eliminated.

The Foreign Workers

  • The new Draft includes a complete chapter concerning employment of foreign workers in Egypt, whether it is a subordinate job, a profession and working in domestic service. It stipulates that all Private Sector Enterprises, Public Sector Units, Public Business Sector, Public Bodies and the Administrative Body of the State shall be subject to the provisions of this chapter putting into consideration the reciprocity clause.
  • Article 65 of the New Draft prohibits the work of a foreigner within the country without a license. In its first paragraph, it states: "A foreigner may not work within the country unless he obtains a license from the competent ministry, where he is authorized to enter the country and reside there for business purposes. Foreigners only operate after obtaining this license. "
  • Article 63 of the New Draft states: "Work in applying provisions of such chapter means any subordinate work or a profession including the Domestic Service".
  • In other words, the provisions for the foreign workers have not been changed.

The Contract Duration

  • The new Labor Law will eliminate the previous employment contracting duration to become at least 6 years instead of One year. Such amendment is considered the most appropriate solution that was reached between the Union Organization and the Employers in the new Labor Law Draft.

The Annual Bonus

  • The employees to whom the provisions of such law apply, shall be subjected to a periodic annual bonus of not less than 7% of the insurance remuneration. The Supreme Council of Wages, explaining that the provisions of the law do not apply to employees of state agencies, including local administrative units, public bodies, domestic service workers and the like.

Working Hours for Pregnant Woman

  • Article 50 of the New Draft unlike its preceding Law provides for the working hours of a pregnant woman which will be reduced by at least one hour starting from the sixth month of pregnancy and is not entitled to any additional working hours within the duration of pregnancy and until the end of six months from the date of pregnancy.

The Supreme Council for Social Dialogue

  • The law provides for the establishment of the Supreme Council for Social Dialogue and its branches in the governorates.

The Execution of the Employment Contract

  • The new law obliges the employer to conclude the contract of employment in Arabic, and make four copies; where the employer keeps a copy and another for the worker, a third for the social insurance office and the fourth for the competent administrative authority (The Competent Ministry for Labor Affairs) instead of three copies stated for in the old law

As concluded from the new aforementioned legislations and amendments, the new Labor Law with all the differences between it and the old law will be more beneficial for the employee from many perspectives, where it will eliminate some harsh articles that were used by the employer against the employee's interests, like "Form 6" that was used to end the worker's employment contract, the employment contract duration becoming at least 6 years, amendments in the working hours of the pregnant women. In addition, the new draft is addressing problems in the private sector which is a main cause for the high unemployment rate as a result for the abusive manner practiced by the employers in the Private Sector towards the employees which in turn has led youth to avoid working in the private sector.

As for the employers, it will not be as beneficial as for the employees, where it will significantly limit his powers in the employment relationship. Therefore, the new Labor Law is meant to close the gaps and deficiencies of the old law, putting an end to the abusive practices of the employers and promoting the national economy in Egypt.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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