Labor Law

Egyptian Law 137 of 1981, as amended the “Labor Law”, together with Articles 674 to 698 of the Egyptian Civil Code (1948), contain the most significant rules governing the relationship between employer and employee in Egypt.

Work Certificates and Permits

All Egyptian workers (with some exceptions, such as those performing “ casual jobs” taking six months or less to complete) must obtain a work certificate. Under Law 231 of 1996, Egyptians working in representative and branch offices of foreign companies need only notify the entity to be determined by the Ministry of Interior by registered mail within one month of their appointment. A work permit from the Ministry of Interior is no longer required. An expatriate who wishes to work in Egypt must obtain a work permit form the Ministry of Manpower and Training. Work permits are usually granted for a period of ten months, and may be renewed.

Employment Contracts

An employment contract must be in writing, drawn up in Arabic in three copies, one copy of each for the employer, the employee and the Social Insurance Office. The employment contract must include certain information specified in the Labor Law. If an employee is hired on probation, the employment contract should indicate the probationary period, which cannot exceed three months. A contract may be drawn up for a definite or indefinite or indefinite period of time. A fixed term contract, if renewed, will thereafter be construed as indefinite. (This rule applies to Egyptian nationals only.)

Working Hours

An employee shall not work more than eight hours in one day, or 48 hours a week. However, the number of working hours may be increased to nine hours a day in certain circumstances. Every employer must grant employees a weekly rest, which cannot be less than twenty- four hours.

The employer is exempt from these provisions in certain situations; for example, where the added work is intended to prevent a serious accident or to cope with an unusually heavy workload. In such situations, the employee must be paid overtime.

Leave and Holidays

An employee is entitled to annual paid leave of 21 days after a full year of service. This annual leave must be increased to one month after the employee has spent ten consecutive years in employment whether or not in the service of the same employer.

Every employee shall be entitled to full pay for holidays designated by the Minister of Manpower and Training (such holidays do not exceed thirteen days per year). An employer may use the services of employees during these holidays if work conditions so require, provided that employer pays double-time.

The Labor Law also contains liberal provisions with respect to employee sick leave, with up to six months sick leave per year with pay between 75% and 100% of the employee’s normal wage.

Health Care and Pension Payments
All companies in the Egyptian private sector must provide free health care for their Egyptian employees either through the Medical Insurance Plan of the Ministry of Social Insurance or privately. Every company in the Egyptian private sector must also contribute to the Pension Insurance Fund of the Ministry of Social Insurance.

Dismissal and Termination

An employee cannot be dismissed unless a grave fault has been committed. Article 61 of the Labor Law sets out a list of such faults.

As a general rule, an employer cannot lawfully dismiss an employee unless the matter has first been brought before the local Conciliation Committee at the Ministry of Manpower and Training and a hearing has been held. The Conciliation Committee seeks to help the parties settle their dispute.

The Egyptian labor courts have discretion in assessing an employment dismissal compensation award on the basis of their review of the facts of each particular case. An employee is usually entitled to thirty day’s notice of dismissal or one month’s salary in lieu of the 30 days’ notice. In addition, previous court decisions have awarded an ‘unjustified dismissal’ payment which could be between one to three months’ salary for each year of employment. The Labor Law sets out a number of grounds of termination without notice, including expiration of the contractually fixed period, retirement or resignation of the employee, or the death of the employee or the employee’s total incapacity to work.