Latest Insights

Interested in starting a new business in Egypt?

Read this brief legal guide

Soliman, Hashish & Partners is constantly in the media spotlight!

Read more

Scholarship for studying the Master of Laws in International Trade Law at International Training Centre of ILO

Read more

Covid-19 Legal Alerts

Soliman, Hashish & PartnersInsightsBriefingsEmploymentAn overview of the Egyptian Employment Law

Ehab Yehia Partner

  • +20225162131 Ext. 116
  • +201123333243

An overview of the Egyptian Employment Law

Briefings Employment

The Egyptian Employment Law issued by Law No. 12 of 2003, as amended (the “Employment Law or the Law”), enforced as of the 8th of July, 2003 is the General Law which stipulates and organizes the relation between any employer and his employees. However, the Egyptian Parliament is currently discussing amending the Employment Law or issuing a new employment law, it is important to highlight the main characteristics of the current Employment law in order to look into the amendments or the new legislation that is expected to be issued soon. 

At first sight this Law is subjective towards the employees in all its rules, this can be justified by the employee as deemed to be the weakest party in this relation and in need to be secured. This subjectivity is clearly observed in all the rights granted to employees under this Law. As articles of issuing the Law expressly states that the rules of the Law shall not prejudice to the employees’ granted rights under any previous law or regulation.

Moreover, the Law stated that any condition or agreement violating the rules of this Law shall be null and void if it’s against the employee’s rights. On the contrary, any agreement prior to the issuance of the law, on interest or condition in favour of the employee shall continue valid. The Law even secured the rights of employees by giving it a privilege among other debts by other creditors, these rights shall still be due in case of employer’s bankruptcy, liquidation or closure. Companies’ Mergers and acquisitions too shall not affect the employment relation.  In addition to granting employees exemption from judicial fees in case of claiming any employment rights.

The Law is characterized also by being general in its definitions, employee is defined as any person who perform work inconsideration of remuneration, as well as employer who is defined as any natural or juridical person who employ an employee in consideration of remuneration. Remuneration itself has a broad definition as everything the employee receives in consideration to his work, whether fixed or variable, in cash or in kind. This definitions aim is to include all the categories of employees, employers and remuneration to be subjected to the Law.

Focus on the most raised Employment claims to Employment Courts and legal issues:

1- Employment relation proof

The case where an employee claims proving his employment relation with an employer who denies such relation including all the rights which arise from such relation. 

The reputation of this claim is a result of a wrong tradition among small size business; that the non-existence of an employment contract between the employer and the employee is an advantage for the business, as employees shall not be able to complain in case of dispute. In addition, the employer may be entitled to solely terminate the employment with the employee without any liability at any time.

According to the law, it is the employer’s responsibility to draft an employment contract with his employees, both the employer and the employee shall have a copy of said contract and a third copy shall be submitted to the social insurance authority.

Moreover, the employment contract shall include the job description, the remuneration, including the salary and any other options like wages and allowances, and the employment’s duration.

As the legislative is aware of this tradition, and as mentioned before that the Employment Law is legislated in favor of the employee, the Law stated that in case of lack of a written contract, only the employee shall have the right to proof the employment relation by any means of proof. Proving the employment relation includes proving its type, remuneration and duration. Such factors are the essential factors in the determination of any compensation the employee may be entitled to.

Consequently, the drafting of an employment contract which determines all the rights and obligations of both the employer and the employee is the right procedure, not only important for the employee, but for the employer as well. 

2- Wrongful termination

This case is the one raised from an employee against the employer for terminating the employment in an unlawful way, claiming compensation for such illegal termination, and usually the annulment of the employment termination.

In regard to claiming the compensation, the law generally specified the reasons of employment termination, by which the employer shall not terminate the employment except in case the employee commits a major fault or is convicted with a felony or imprisoned for a dishonored crime. The law stipulated some forms that shall be deemed as a major fault, the most important of them are submission of forged documents, subsequential illegal absences, disclosure of confidential information and competing the employer in the same business.

In case of the employer’s unreasonable termination, the employee shall be entitled to compensation not less than the amount of twice his salary for each year of employment in indefinite employment relations, and the rest of the salary for the whole employment period in case of definite employment relations.

The Egyptian Court of Cassation has a clear principal that prevent employment courts from deciding the return of the employee to the terminated work, according to such principal the employer shall not be forced to employ a specific person without his consent, accordingly, in case of illegal termination the courts shall only have the right to evaluate and decide the termination’s legality and the amount of compensation if decided illegal. 

3- Outsourcing

Seconding employees to other companies is a known practice in Egypt, a practice which results having an employee performing his job duties solely for a company without having a clear employment relationship with it, but with being the employee of another company, which perform nothing except seconding him and other employees to other companies to perform their duties. The aim of outsourcing is to avoid the legal obligations accompanied with employment relationship between the employee and the company in which he performs his employment duties to. this method is usually applied by having (i) the Employer which is a company that perform nothing except employing employees to be secondment to other companies, (ii) the Client a company which does not have any employees of its own or have a very limited number of employees, and finally (iii) the Seconded Employee who is the employee of the Employer, who perform his duties solely for the Client in either the premises of the Employer or the Client.

According to the Employment Law, the act of outsourcing is a crime against both the Employer and the Client. This crime is penalized with imprisonment and fine. Moreover, since the Labour Law defines the employee as any person who perform work inconsideration of remuneration for the employer and under the employer’s direct supervision. Accordingly, if the secondee is able to prove the employment relationship with the Client by just proving the elements of employment (as stated in point No. 1 above), the employee will be considered as an employee of the Client. Additionally, the employee will be entitled to claim all his employment rights from the Client.  

4- Annual leave disputes

Claiming compensation for unused annual leaves, where the employee claim for compensation for the unused annual leaves on the basis that the employer did not allow him to use due to work needs, and the employer plea that the employee did not ask for annual leaves and has intentionally reserved those leaves to be compensated for. Most of these claims always ends up with a judgment in favour of the employee.

The Employment Law grants employees 21 days’ annual leave that starts after the elapse of 6 months of employment, the days increases to 30 days once the employee spend 10 years of employment with any employer or reach 50 years old. the annual leaves do not include any public holiday or weekend.

The general rule in the Law is that annual leaves shall be consumable, employers shall determine the annual leaves’ dates for employees according to work needs, and employees shall use these leaves and may not waive their right to use them.

As an exception to this rule, the employer shall compensate the employee every three years or once the termination of employment for the unused annual leaves, the compensation shall be valued by the employee’s salary.

The problem here is that the rules of this law which regulates the annual leaves stipulated the responsibility of the employer to determine the employee’s annual leaves. Accordingly, in case the employer was unable to proof notifying the employee with the determined dates of the employee ‘s annual leaves, and the refusal of the employee to use them, the employer shall be responsible and shall compensate the employee even if the later did not claim to use said leaves or even aims to reserve them.

5- Employment Claim

To raise a claim for any employment rights before employment courts, an employee must do so within seventy-six (76) days as a general well-known long-established rule in the Egyptian Employment Law, that is typically used by the majority of defendants before employment courts, mainly because of the essential and severe result of the elapsing of such duration, which is the loss of right to claim.

In reality, the elapse of an employment claim’s duration plea is usually overruled by court, as this rule, in spite of being stipulated by law, requires some conditions in order to be applied.

The most important condition for applying this rule and accepting its plea is contingent upon the ability of the employee to prove the existence of a dispute with the employer. Dispute here, as the Court of Appeal defines it, is the request of obtaining a right declared from the employee and the refusal of the employer to grant the employee this right. In the case the dispute’s date is not proven, considering that the defined duration of seventy-six (76) days shall be disregarded, the date in which the claim is raised shall be deemed the dispute’s date, which is why it is crucial for employers to know the aforementioned condition of this plea.

Member of