As Egypt is seeking to improve the efficiency of the labor market and create a safe working environment by guaranteeing and achieving a balance between employees' and employers’ rights, the much-anticipated labor law (the “Draft Bill”) is at its mid-stages at the Egyptian Congress, a few steps away from being promulgated.
By way of background, on March 18, 2021, the president of the House of Representatives referred the draft bill to the joint committee on energy, power, and labor as well as the bureau of the constitutional and legislative committee. The said committee held six meetings to examine the draft bill. On November 29, 2021, after approving the amendments added therein by the Ministry of Justice, the president of the House of Representatives referred the said amendments to the joint committee, whereby seven meetings were held to discuss the legislation.
Once promulgated, the draft bill will repeal the currently-in-effect labor law No. 12 for the year 2003 (the “Labor Law”). The draft bill adopts new provisions to cope with international standards, especially concerning retirement pensions, female employees’ rights, foreign employees, individual employment contracts, termination of employment contracts, class settlements, and judicial efficiency in labor disputes.
Based on the latest released version, below are the key highlights of the draft bill:
Rights granted to female employees
Maternity leave is expected to increase by one month compared to what is currently provided under the Labor Law. Pregnant female employees will be entitled to work fewer hours per day, provided they are in the sixth month of their pregnancy. They will not be forced to work extra hours for six months after the delivery.
Individual employment contracts
The Draft Bill has deviated from what is provided under the current Labor Law regarding the distinction between a definite and an indefinite employment contract. For instance, definite period employment contracts that are concluded for a term of more than four years, or several terms with a total period of more than four years, will be converted into indefinite period employment contracts. Under the current labor law, there are no provisions that indicate a specific term after which the definite employment contract shall be converted into an indefinite period employment contract.
Termination of a contract without just cause
Whether the contract has a definite or indefinite term, the Draft Bill gives employees the right to claim compensation from their employers if the latter terminates their employment contract without a lawful reason. For clarity, the Draft Bill has set the perimeter of the compensation whereby it shall amount to the full salary of two months for each year of service in the case of an indefinite employment contract and the full salary of two months for every year of service in the case of a definite period employment contract.
The Labor Law, currently, does not explicitly differentiate between the compensation granted in case of unfair dismissal between indefinite and definite period employment contracts.
Retirement pensions
Further to the provisions of the social insurance law, the Draft Bill extends the scope of the beneficiaries of retirement pensions to include all those who may directly benefit from the said pension following the death of the original beneficiary.
Foreign employees
In a move aimed at monitoring the foreign labor force and asserting security, employers will be obliged to report the escape of foreigners from work. The competent ministry (i.e., the Ministry of Labor and Power or Interior Ministry) will indicate the rules and forms that must be filled out and filed to repo
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