Egypt: Labour and Employment Comparative Guide

1 Legal framework

1.1 Are there statutory sources of labour and employment law?

The sources of labour and employment law in Egypt are as follows:

• the Labour Law (12/2003), with numerous ministerial decrees serving as its executive regulations;
• the Child Law (12/1996);
• the Rehabilitation of the Disabled Law (10/2018);
• Articles 674 to 698 of the Civil Code (131/1948), primarily covering labour and employment issues;
• the Law on Social Insurance and Pensions (148/2019);
• the Law on the Entry, Residence and Exit of Foreigners from the Territories of the Arabic Republic of Egypt (89/1960);
• Minister of Manpower and Immigration Decrees 305/2015 and 485/2010 concerning work permits for foreigners;
• the Trade Union Organisations and Protection of Unions Organisation Right Law (213/2017);
• the Data Protection Law (151/2020); and
• the Rights of People with Disabilities Law (10/2018).

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

There is no specific system for contracts; the only applicable sources are those mentioned in question 1.1.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Employment contracts are used at all levels. The documentary and content requirements that apply to employment contracts under Article 32 of the Labour Law are as follows:

• The employment contract should be concluded in writing in the Arabic language.
• The employment contract must include:
• • the employer's name and address;
  • the job title, a job description and the nature of the role (full time or part time);
  • the employee's qualifications, profession or craft;
  • the employee's social security number and place of residence; and
  • the salary and benefits.
• It is recommended that the contract also include:
• • the duration of the contract;
  • a confidentiality clause; and
  • non-compete and non-solicitation provisions.
• Three Arabic or bilingual copies of the contract must be signed: one for each party and the third to be filed with the Social Security Office.
• The employer can forgo signing an employment contract if the employee has signed to indicate acceptance of the offer letter, which contains all of the data that the employment contract must include under the Labour Law. The offer letter must also be:
• • written in Arabic;
  • signed by the employee; and
  • presented to the Social Security Office.

Article 148 of the Civil Code recognises implied clauses, stating that a contract is not merely limited to the obligations stated therein, but also encompasses obligations in accordance with the law, custom and justice according to their nature. The Egyptian courts have also accepted the notion of implied clauses by examining the intentions of both parties and all relevant circumstances, in accordance with Article 90 of the Civil Code.

Article 76 of the Labour Law provides that an employer may not:

• deviate from the agreed terms included in the employment contract or in an applicable collective labour agreement; or
• assign to the employee work that is not agreed upon, except:
• • where this is necessary to prevent an accident or repair the results of an accident; or
  • in the event of force majeure, provided that this is done on a temporary basis.

An employer may also assign the employee work that has not been agreed upon if it does not differ fundamentally from that which has been agreed upon, provided that the rights of the employee are not prejudiced.

In addition, implied terms are regulated in relation to the termination of two types of employment contracts that can be renewed implicitly: fixed-term contracts and specific-purpose contracts. In this regard, fixed-term contracts, according to Article 105 of the Labour Law, can be renewed if the term of the contract has elapsed and the parties continue working together without a formal written renewal agreement; in this case, the contract will be renewed for an indefinite term. Respectively, specific-purpose contracts, according to Article 108 of the Labour Law, can also be renewed implicitly for an indefinite term if the parties continue working together without a formal written renewal agreement after the purpose of the contract has been achieved.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

At both a local and a national level, Egyptian law only regulates maternity leave rights for female employees.

2.2 How long does it last and what benefits are given during this time?

Article 91 of the Labour Law entitles a female employee to 90 calendar days' maternity leave with full compensation equal to her salary (including the period before and after delivery), provided that the employee has spent 10 months in the service of her current employer or any previous employer. However, some jurists suggest that Article 70 of the Child Law implies that this 10-month requirement is no longer necessary, and that a female employee is entitled to maternity leave for a period of three months after delivery of her child (and not just 45 days, as per Article 91 of the Labour Law). In this regard, according to Article 91 of the Labour Law, the 90-day period can start to run before delivery; but in any case, a female employee cannot work in the 45 days subsequent to delivery. Furthermore, the employer cannot fire an employee or terminate her service during maternity leave. Article 50 of Chapter 3 of the new draft Labour Law, entitled "Women's Employment", further protects female employees, stating that a female employee has the right to maternity leave for four months after delivery of the child, thus extending maternity leave for one further month.

A female employee is not, however, entitled to more than three periods of maternity leave in total (ie, nine months) during her full tenure of employment, as per Article 70 of the Child Law. Nevertheless, Article 94 of the Labour Law states that if an employer has at least 50 employees, a female employee has the right to take unpaid leave for up to two years to take care of her child. This right can be exercised only twice during her entire tenure of employment.

2.3 Are trade unions recognised and what rights do they have?

Yes, trade unions are recognised in Egypt. In 2017, the Trade Unions Law was replaced with the Trade Union Organisations and Protection of Union Organisation Right Law, which recognises and regulates trade unions in Egypt. Article 14 of the law states that trade unions aim to:

• protect the legitimate rights of their members;
• defend members' common interests;
• improve their working environment and conditions; and
• carry out activities of a social, scientific, sporting or health nature.

Further, under Articles 4 and 5 of the law, employees have the right to establish trade unions, and are free to join or leave a trade union whenever they wish, provided that the union is not established on a religious, ideological, partisan, ethnic or political basis.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

The Data Protection Law (151/2020) governs the protection of employees' data. Article 2 states that personal data may not be collected, processed or disclosed by any means except:

• with the express consent of the data subject; or
• in cases authorised by law.

Article 2 grants data subjects the following rights:

• to be aware of, access or obtain their personal data held by any holder, controller or processor;
• to rescind their prior consent to retain or process their personal data;
• to correct, modify, delete, add to or update their personal data;
• to allocate processed data within a specific scope;
• to be aware of any breach or violation of their personal data; and
• to object to the processing of their personal data or its results when this conflicts with their basic rights and freedoms.

Moreover, Article 3 of this law states that the collection, processing and retention of personal data must meet the following conditions:

• The personal data must be collected for legitimate, specific and declared purposes;
• The personal data must be correct, sound and secure;
• The personal data must be treated in a lawful manner and must be appropriate for the purposes for which it was collected; and
• The personal data must not be kept for a period longer than that which is necessary to fulfil the specified purpose.

Therefore, the Data Protection Law generally:

• preserves the privacy rights of employees to a great extent; and
• imposes a number of obligations and conditions on employers when collecting their employees' personal data.

2.5 Are contingent worker arrangements specifically regulated?

Article 1 of the preamble to the Labour Law defines three contingent work types under Egyptian law:

• temporary work – that is, work which by its nature is included within the employer's activities and which requires a specific period for completion, or which is focused on a specific project and ends with its completion;
• casual work – that is, work that does not, by its nature, fall within the employer's normal scope of activities and does not take more than six months to complete; and
• seasonal work – that is, work that takes place during customary periodic seasons.

Therefore, contingent work falls within the scope of the Labour Law as indicated above. As a result, contingent workers generally have the same rights and obligations as other workers. However, for temporary, casual and seasonal employees to fall within the scope of the Labour Law, they must work for a wage for an employer and under its management or supervision, according to Article 1 of the Labour Law.

It could be argued from the above definitions that contingent work contracts may be considered as either fixed-term, unlimited term or specific-purpose contracts, depending on the agreement between the employer and employee. For instance, a specific-purpose contract, under Article 107 of the Labour Law, is terminated upon the conclusion of the purpose of the contract, as in the case of temporary work defined above. In such cases, both parties must abide by the contract's specific termination conditions, as per Chapter 7 of the Labour Law, entitled "Termination of the Work Relationship".

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

According to Ministerial Decree 57/2021, the new minimum wage, effective from 1 January 2022, is EGP 2,400 for the private sector.

3.2 Is there an entitlement to payment for overtime?

According to Article 85 of the Labour Law, employees are entitled to payment for overtime work according to what has been agreed in the employment contract. Such payments must not be less than the employee's original salary for overtime hours plus 35% for daytime working hours and 70% for night working hours (ie, any hours worked between sunset and sunrise).

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

As per Article 47 of the Labour Law, employees are entitled to annual leave; however, the number of leave days differs as follows:

• An employee with at least one year of service is entitled to 21 working days of annual leave. For workers who are at least 50 years old or who have spent at least 10 years working for any employer, this period is extended to 30 working days.
• If the employee's term of service is less than one year, he or she will be entitled to a period of time off at work, provided that he or she has spent at least six months working for the employer.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

As per Article 54 of the Labour Law, the number of days of sick leave that an employee can take is not determined by the law. In this regard, the appropriate medical authority makes a decision based on the individual circumstances.

3.5 Is there a statutory retirement age? If so, what is it?

According to Article 125 of the Labour Law, the employer cannot set the retirement age for employees at anything less than 60.

According to Article 41 of Law 148/2019, the intention is to gradually increase the retirement age to 65 years by 1 July 2040, as follows:

• For those born before or during 1971, the retirement age is 60 (2030);
• For those born between 1972 and 1973, the retirement age is 61 (2032);
• For those born between 1974 and 1975, the retirement age is 62 (2034);
• For those born between 1976 and 1977, the retirement age is 63 (2036);
• For those born between 1978 and 1979, the retirement age is 64 (2038); and
• For those born in 1980 or thereafter, the retirement age is 65 (2040).

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

As per Article 35 of the Labour Law, it is forbidden for an employer to discriminate between its employees with regard to salaries and compensation on the basis of gender, origin, language, religion or belief. In addition, Article 120 states that the termination of an employment contract based on colour, gender, marital status, family responsibilities, pregnancy, religion or political opinion will not be considered legitimate and the employee will have valid grounds to bring a claim for discrimination.

4.2 Are there specified groups or classifications entitled to protection?

Aa a general rule, Article 53 of the Constitution states that discrimination on the basis of religion, belief, gender, origin, race, colour, language, disability, social class, political or geographical affiliation or any other grounds is forbidden.

The law further offers some measure of protection for the disabled. In this regard, Article 20 of the Rights of People with Disabilities Law (10/2018) states that the government is obliged to guarantee disabled persons equal opportunities for work according to their academic qualifications. Article 22 further states that for governmental and non-governmental agencies and all employers with at least 20 employees (whether working in one place or in separate places, and whatever the nature of their work), workers with disabilities must comprise at least 5% of the workforce, as nominated by the Ministry of Labour Affairs and its affiliated administrative authorities.

Women are also specifically protected in several cases under the law. Article 88 of the Labour Law states that all provisions regulating the employment of workers will apply to working women without discrimination if their working conditions are the same, thus indicating that men and women must be treated equally under the law. In addition, Article 92 states that pregnant women may not have their employment contract terminated during maternity leave. Moreover, women are generally protected under the Constitution. Article 11 provides that the state:

• Guarantees the achievement of equality between women and men in all civil, political, economic, social and cultural rights; and
• Works to ensure the adequate representation of women in Parliament, as determined by law, and their right to assume public and senior positions in the state and to be appointed to judicial authorities without discrimination.

Further, the state must protect women against all forms of violence and ensure that women can handle their family duties along with their work requirements. Finally, the state is committed to providing care and protection for mothers and children, breadwinners, the elderly and women with the greatest needs.

In addition, there are several specific protections for children under both the Labour Law and the Child Law. For instance, Article 99 of the Labour Law prohibits the employment of children before they complete their primary education or the age of 14, whichever is greater. However, they may be trained once they reach the age of 12.

4.3 What protections are employed against discrimination in the workforce?

According to Article 247 of the Labour Law, if an employer discriminates against workers with regard to wages, they can be fined up to EGP 500.

4.4 How is a discrimination claim processed?

Article 70 of the Labour Law states that if a dispute arises between the employer and the employee regarding a discrimination claim, either party may request, within 10 days of the dispute arising, that a labour committee settle it amicably.

If settlement is not completed within 21 days of the date of submission of the application, either party may:

• Request that the competent administrative authority refer the dispute to the labour court; or
• Resort to the labour court within 45 days of the expiry of this 21-day period.

This is the case whether the dispute was submitted to a labour committee or not; otherwise, the right to refer the matter to court will be waived.

However, if someone who is not yet an employee is discriminated against – such as where an employer refuses to hire someone based on his or her religious belief or skin colour – that person has the right to process a claim against the employer before the civil courts, based on both material and moral damages due to the employer's violation of both the Constitution and the Labour Law. In this regard, Article 120 of the Labour Law states that the termination of an employment contract based on skin colour, gender, marital status, family responsibilities, pregnancy, religion or political opinion will not be considered legitimate. Thus, failure to appoint someone to a role based on discriminatory basis will be considered valid grounds for processing a claim against the prospective employer. Further, Article 53 of the Constitution states that:

4.5 What remedies are available?

The Labour Law specifies remedies if an employer abusively dismisses an employee, such as on the basis of the employee's skin colour, gender, marital status, family responsibilities, pregnancy, religion or political opinion, or any other discriminatory grounds. In this regard, Article 122 states that if the termination was on the employer's side and without justification, the employee may resort to the labour court to request compensation, which may not be less than two months' gross wages for each year of service. This does not prejudice the employee's right to claim the rest of his or her legally prescribed entitlements (eg, the reminder of his or her available annual leave).

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Article 309bis(B) of the Penal Code forbids bullying and considers this a crime. 'Bullying' is defined in the code as any statement or display of the offender's strength or control, or exploitation of the victim's weakness or situation that the offender believes would offend the victim – such as gender, race, religion, physical description, health or mental condition, or social status – with the aim of:

• intimidating the victim;
• making him or her a subject of ridicule;
• degrading him or her; or
• excluding him or her from his or her social environment.

The same article provides that, without prejudice to any more severe penalty stipulated in any other law, a person who is found guilty of bullying may be punished by imprisonment for at least six months or a fine of between EGP 10,000 and EGP 30,000, or both.

In addition, Articles 306bis(A) and (B) of the code provide that anyone who offends others in a public or private place through sexual or pornographic actions or insinuations may be punished by imprisonment for between two and four years and a fine of between EGP 100,000 and EGP 200,000, or both.

Therefore, any citizen can claim compensation before the criminal courts where he or she suffers from such crimes.

In order for an employee to seek compensation before the labour courts, he or she must have been subjected to harassment or bullying during working hours or for work-related reasons. That is, harassment or bullying during working hours or for work-related reasons incurs both criminal and civil liabilities: the criminal liability is before the criminal courts and the civil liability (compensation) is before the labour courts.

In relation to retaliation and victimisation, the Labour Law protects employees against abusive dismissal by the employer. In this regard, Article 120 of the Labour Law states that the termination of an employment contract based on skin colour, gender, marital status, family responsibilities, pregnancy, religion or political opinion will not be considered legitimate.

Furthermore, Article 122 of the Labour Law states that if an indefinite-term employment contract is terminated by the employer without justification, the employee may resort to the labour court to request compensation of:

• At least two months' gross salary for each year of service for the same employer;
• Payment in lieu of notice – that is:
• • Two months' gross salary instead of statutory notice where the employee has worked for the employer for up to 10 years; or
  • Three months' gross salary where the employee has worked for the employer for more than 10 years; and
• Any unused vacation days in the employee's balance.

On the other hand, compensation for unjustified termination of fixed-term contracts should amount to the gross salary for the remaining period of the contract and any unused vacation days in the employee's balance.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

Fixed-term contracts: In the case of fixed-term contracts, an employer cannot terminate the contract before the fixed term has elapsed unless a valid reason is provided – that is, gross negligence or a fundamental breach.

With regard to what constitutes a fundamental breach, as stipulated in Article 69 of the Labour Law, an employee is considered to have committed a fundamental breach if one the following incidents occurs:

• The employee makes a mistake that causes egregious damage to the employer (and the employer reports the incident to the competent authorities within 24 hours of learning of the incident);
• It is proven that the employee has assumed a false identity or submitted counterfeit or forged documents;
• The employee assaults his or her employer or manager, or grossly assaults any manager during working hours or for work-related reasons (the law does not define 'assault', but under Egyptian jurisprudence both physical and verbal attacks are grounds for dismissal);
• The employee is found inebriated, intoxicated or under the influence of narcotics during working hours;
• The employee discloses company secrets or confidential information, resulting in gross or serious damage to the company;
• The employee competes with the employer in the same industry during his or her tenure as an employee;
• The employee accumulates a total of 20 non-consecutive days of unexcused absences in one year (any rolling 12-month period) or 10 consecutive days, provided that he or she is notified in writing with acknowledgement of receipt within 10 days in the case of non-consecutive absences and five days in the case of consecutive absences;
• The employee repeatedly fails to observe and abide by safety regulations put in place to ensure the safety of employees and the workplace, where such regulations have been clearly stated and publicised in an apparent place and the employee has been notified and warned in writing to observe and abide by them; or
• The employee violates the provisions on strikes stipulated in Articles 192, 193 and 194 of the Labour Law.

The law also specifies other instances in which an employee's employment may be terminated, such as the following:

• The employee suffers from a permanent and full disability that renders him or her unable to perform his or her job. In the event of partial disability, the employer is within its rights to transfer the employee to another position that is better suited to his or her abilities if one is available within the company. If such a position is not available, the employer has the right to dismiss the employee;
• A sick employee has exhausted all of his or her sick leave and annual leave, and still has not returned to work (this applies only if the employer has issued written notice 15 days prior to the expiry of the employee's leave); or
• The employee is convicted of a felony or imprisoned for crimes relating to honour, integrity or public morality/decency.

Indefinite-term contracts: An employer cannot terminate an indefinite-term contract unless:

• A valid reason is provided; and
• It is proven that the employee:
• • Is unfit for the job; or
  • Has committed a 'fundamental breach' (see above).

For the employee to be deemed unfit or incompetent for his or her occupation, the employer must prove that the employee is unfit as per the internal regulations in place. In this regard, the Court of Cassation (Decision 12653 of JY 89, 21 February 2021) has held as follows:

The right to dismiss an employee is a right that is exclusive to the labour courts.

5.2 Is a minimum notice period required?

Article 111 of the Labour Law states that a two-month notice period is required if the employee has worked for the employer for up to 10 years. This increases to three months' notice if the employee has worked for the employer for more than 10 years.

This 10-year period is calculated solely with reference to the current employer; any years spent working for previous employers are disregarded. To this end:

• If an employee previously worked for a parent company and then moves to one of its affiliate companies, the 10-year term is calculated from the start of the employee's tenure at the parent company, as the 'employer' in this case is the legal person (ie, the company) and not the individual who directly manages the employee; and
• If a company continues after a transfer of ownership, the employment contract will continue and the 10-year term will be calculated from the start of the employee's tenure at the company before the transfer of ownership.

5.3 What rights do employees have when arguing unfair dismissal?

In case of unfair dismissal, an employee has the right to file a claim with the Labour Office. In this regard, Article 120 of the Labour Law states that the termination of an employment contract based on skin colour, gender, marital status, family responsibilities, pregnancy, religion or political opinion will not be considered legitimate. Furthermore, Article 122 of the Labour Law states that if an indefinite-term employment contract is terminated by the employer without justification, the employee may resort to the labour court to request compensation of:

• At least two months' gross salary for each year of service for the same employer;
• Payment in lieu of notice – that is:
• • Two months' gross salary instead of statutory notice where the employee has worked for the employer for up to 10 years; or
  • Three months' gross salary where the employee has worked for the employer for more than 10 years; and
• Any unused vacation days in the employee's balance.

On the other hand, compensation for unjustified termination of fixed-term contracts should amount to the gross salary for the remaining period of the contract as well as any unused vacation days in the employee's balance.

5.4 What rights, if any, are there to statutory severance pay?

With regard to severance pay, the amount payable is subject to the type of contract signed.

Fixed-term contract: Severance pay should amount to the gross salary for the remaining period of the contract as well as any unused vacation days in the employee's balance. This does not apply to employees who are still in the probationary period, which has a maximum duration of three months, as per Article 33 of the Labour Law.

Indefinite-term contract: Severance pay should amount to:

• Not less than two months' gross salary for each year of service with the same employer, according to Supreme Constitutional Court Decision 5 of 37 JY, 4 May 2019;
• payment in lieu of notice (two months' gross salary in lieu of the statutory notice period if the employment period up to 10 years and three months' gross salary if the employment period is more than 10 years); and
• any unused vacation days in the employee's balance.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

Employment-related complaints and disputes are adjudicated through optional mediation at the request of either party to the dispute within 10 days of the dispute arising. The mediation panel must include:

• a representative of the competent administrative authority;
• a representative of the relevant syndicate or association; and
• a representative of the employer's organisation.

If the complaint is not resolved within 21 days of filing of the complaint, either party has the right to petition the panel to refer the dispute to the competent labour court.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

Labour disputes usually take one and half to two years to achieve a final resolution.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

There is a clear trend in Egypt whereby employers dismiss employees in the full knowledge that in order for the employee to get what he or she is owed, the employee will have to resort to litigation – a lengthy and expensive process. This sometimes forces the employee to negotiate with the former employer for severance pay in order to cut his or her losses.

Proposed reforms to the Labour Law were approved by the Cabinet in Session 167 held on 2 November 2021 but are not yet in force. The new draft law grants further privileges to all employees and especially to female employees. For instance, Article 50 of Chapter 3, entitled "Women's Employment", states that a female employee has the right to maternity leave for four months after delivery of the child, thus extending maternity leave for a further month and equalising the situation between female employees in the private sector and in the public sector, and those who are covered by the Civil Service Law.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

The employment regime should protect both the employee and the employer. That is, in order for an employer to respect the full rights of employees, it must be satisfied that it also enjoys protection under the Labour Law. For instance, if an employee is not fit for his or her position, the employer will have the right to terminate the employment contract simply by stating the reasons for termination according to its internal regulations, and the employee will have the burden of proving otherwise. In this regard, a 2021 decision of the Court of Cassation grants employers the right to dismiss an employee if he or she has committed gross negligence resulting in serious damage to the employer. This is because the employment contract imposes mutual obligations on the parties; if the employee breaches his or her obligations arising from the employment contract – including the obligation to be transparent and not to derogate from the requirements of the job – the employer has the right to terminate the employment contract and must submit the decision on dismissal to the competent court.

However, this issue should not be left solely to the discretion of employers and the judicial authorities. The Labour Law should thus set out more concrete and definite criteria in relation to 'fit' and 'unfit' employees. For example, an employer could include certain key performance indicators in its internal regulations (approved by the Labour Office), as a detailed reference for evaluating the performance of employees.

In another emerging trend, there is an increasing focus on work-life balance. Employers are striving to provide healthy, non-toxic working and social environments for their employees, with the aim of increasing productivity and fostering both the economic and social aspects of employment. Additionally, there are initiatives aimed at securing menstrual leave for female employees, allowing them to take paid time off when symptoms affect their job performance. Menstrual leave is generally connected to broader discussions on women's health, job performance and gender equality.

Generally speaking, the Egyptian employment regime does not enable employees to take expedient action to protect their rights. Employees who exercise their rights before the labour courts can wait up to two years until justice is achieved – a lengthy process that may deter them from exercising their protected rights under the law. In this regard, it is suggested that the Labour Law should grant the Labour Office the right to unilaterally impose penalties on a defaulting employer until the labour court has issued its decision in the matter. This would empower the Labour Office to take action against rogue employers, which might thus retract their defaulting action instead of going through the lengthy procedures before the labour courts.

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.