Around 96% of the 70 million Egyptians live
in the Nile Valley and Delta, with 16 million residing in
Cairo and 6 million in Alexandria. Approximately one-third
of the workforce is employed in agriculture. An estimated
47% of Egypt's economic and social establishments are in the
Cairo and Alexandria governorates, which host 25% of the labor
force.
The number of non-Egyptian employees in any establishment
must not exceed 10 percent of the total work force for unskilled
or semiskilled workers. For skilled workers the limit of Egyptian
labor is 25 per/cent. Also total compensation of foreign employees
must not exceed 35 per/cent of the total payroll of the establishment.
The Egyptian labor market is regulated by the new unified
Labor Law No. 12 for 2003. The new Law comprises 257 articles
that address all the legal aspects regulating the Egyptian
labor market. The new law aims at increasing the private sector
involvement and at the same time achieving a balance between
employees' and employers' rights. Amongst the most important
issues that the new law addresses is the right of an employer
to fire an employee and the conditions pertaining to this
as well as granting employees the right to carry out a peaceful
strike according to controls and procedures prescribed in
the new law.
Employment contracts are required to be in writing, in
triplicate and in Arabic language. The employer, employee
and social insurance office each keep one copy of the employment
contract, which must include certain information as specified
in the Labor Law.
A typical labor contract would include:
Name of the employer and the address of the work place.
Name, qualifications, occupation and address of the employee
and the documents required to prove his identity, and his
social insurance number.
Nature and kind of work subject to the contract.
The wage agreed upon and method and time of payment.
If an employee is hired on probation, the employment contract
should indicate the probationary period, which cannot exceed
three months.
An employment contract may be drawn up for a fixed-term
or indefinite period of time. A fixed-term contract with an
Egyptian employee, if renewed, automatically becomes an employee
contract for an indefinite period.
It is necessary that both the employer and employee agree
on essential matters in the law concerning wages, job description,
and contract period.
It is also important to state the kind of work, which the
employee is obliged to do, and the entity to which he/she
is questionable if work is not performed.
Contract Period The legislator regulates a maximum of five years for
a fixed contract. If the employer and employee agree on a
longer employment duration, then the latter has the right
to terminate the contract after the initial five years, without
receiving compensation; however, the employer must be notified
within an agreed upon time period.
The probation period shall be specified in the labor contract
and no employee shall be appointed under probation for a period
exceeding three months, neither shall an employee be appointed
under probation more than once with the same employer.
Working Hours Employees should not work more than eight hours a day
or 48 hours over a six days working week.
Most private sector employees work 5 days a week, usually
Sunday to Thursday. The number of working hours may be increased
to 9 hours a day in certain circumstances.
Employees are entitled to one whole working day off each
week. Certain exceptions apply when work is intended to prevent
a serious accident or to cope with a heavy workload. In such
situations, the employee must be paid overtime.
Article 77 of the Law No. 12/2003 states that the employer
should establish a file for each of his/her employees where
he/she shall detail the employee's name, occupation, educational
degree, his address, military status, social status, date
of appointment, wage and changes in wage, penalties imposed,
leaves obtained, and finally the date of service termination
and the reasons for it.
The employer should also deposit any investigation reports,
any reports by the employee's supervisor concerning performance,
and any other document related to the employee's service.
Moreover, the employee should keep the above-mentioned file
for at least one year after the termination of the labor relationship.
Reasons behind this commitment is to prevent any dispute that
may take place on wages, leaves, firing or dismissal reasons
and to facilitate the employer's administration regarding
accomplishing the Labor Law requirements.
The previously referred to data in Article No. 77 represent
the least amount of data that should be provided in the employee's
file. There are no restrictions to adding any more data such
as: the employee's age, sex (male, female), qualifications
acquired and certificates of experience.
The Labor Law obliges the employer to present the following
records to the Ministry of Manpower and Migration:
Disabled Record
Regarding the employment of disabled individuals according
to Law No. 39 of 1975, which entails qualifications and employment
of the disabled, this law obliges private sector employers,
whose number of workers equals to or exceeds fifty employees,
to employ 5% of the total number of workers from the disabled
as recommended by the Manpower Offices.
The employer also has the right to appoint disabled individuals
he chooses provided they are holding the registry certificate
which proves their disability.
Any employer who hires a disabled worker should send a registered
mail letter with receipt confirmation to the manpower office
in charge during the first fifteen days of the employment
of the disabled worker/employee.
Foreigners' Record
In an attempt to enforce control on employing foreigners,
the ministry obliges organizations employing foreigners to
make a record including the following:
The foreigners name and surname
Birth date
Job title and exact job description
Qualifications
Date and number of his employment permit.
Date and number of his employment license wages
Financial Penalties Record
An employer shall make entry of the financial penalties imposed
on employees in a special register, detailing the reasons
why such penalties were imposed, the name of the employee
and his/her salary. All financial penalties should be delivered
to the Ministry of Manpower as per the new Labor Law.
Duration of Probation
The probation labor contract should not exceed three months
neither shall an employee be appointed under probation more
than once.
A probation contract is a conditional labor contract, in case
the employee proves unsuitable for the job during the allotted
period; thus, allowing the employer to cancel the contract.
Dismissal & Termination
Article 69 of the Labor Law, lists the grounds under which
an employee may be dismissed. An employee may not be dismissed
until the matter is brought before a committee with judicial
powers at the Ministry of Manpower and Migration. The committee
shall decide the request for dismissal brought to it within
(15) days from the date of the first session and its decision
shall be final.
However, the employer may thereafter dismiss an employee
and the employee retains the right to challenge the dismissal
in court.
Egyptian Labor Courts retain discretion in reviewing an employment
dismissal. Compensation awards may be granted to employees
for wrongful dismissal on the basis of a review of the facts
and circumstances of each case.
An employee is entitled to 60 days notice for dismissal if
his period of service does not exceed 10 years and 90 days
if that period exceeds 10 years. (Should the employer desire
to dismiss the employee without giving him the relative notice
period, the employee shall receive two or three months salary
payment instead of such notice).
Court decisions have tended to award payments not less than
the wage of two months' salary for each year of employment
for wrongful dismissal. Throughout the notification period
the labor contract shall remain ruling.
Grounds for legal termination without notice include the
expiry of a fixed-term employment contract, retirement, resignation,
death or the incapacity of the employee to perform the relevant
job.
An employee is entitled to a minimum annual paid leave of
21 days every one full year of service and proportionally
if his period of service is less than one year. This annual
leave is increased to one month after the employee has worked
for 10 consecutive years or is over 50 years old. In addition,
every employee is entitled to full pay for official holidays
designated by the Ministry of Manpower and Immigration, not
to exceed 13 days a year.
If employees are required to work during official holidays,
the employees are entitled to overtime (paid at twice their
normal rate). The weekly days off and the official holidays
shall not be counted as part of the annual leaves.
Accidental Leave
Accidental leave is the leave taken by an employee, as a result
of unexpected circumstances, in which he has no choice except
desisting from work, after that he should inform the employer
with the reasons of desisting.
Article No. 51 of the Labor Law states that desisting from
work with accidental reason should not exceed six days per
year and this leave will be counted from the annual leave
of the employee.
Sick Leave
The Labor Law provides that an employee whose sickness is
established and determined by the concerned medical responsible
is entitled up to six months of paid sick leave annually at
between 75% and 100% of the employee's normal wage.
A worker shall be entitled to benefit from his accumulated
annual leaves in addition to leaves of sickness and he shall
also have the right to request his leaves of sickness to be
transferred to the annual leave balance.
An employer shall not terminate the employee's service due
to sickness unless the employee has utilized the above-mentioned
period.
Official Leaves (Public Holidays)
According to ministerial decree No. 63/1982 official leaves,
which are fully paid, are as follows:
The 1st day of Moharam (Islamic new year)
The 12th day of Rabie the first (Prophet Mohamed's birthday)
The 1st and 2nd days of Shawal (1st Bairum)
The 9th, 10th, and 11th days of Zoelhega (2nd Bairum)
The seventh day of January (Eastern Christmas)
Spring day (Sham El Nessim)
The 25th of April (Sinai Liberation Day)
The 1st of May (Labor Day)
The 23rd of July (Revolution Day)
The 6th of October (Armed Forces Day)
Performing Pilgrimage or Visiting
Jerusalem
Regarding religious respects, Article No. 53 of the new Labor
Law stated that an employee who has spent five consecutive
years in the service have the right to full paid leave for
a period not exceeding one month for performing pilgrimage
or to visit Jerusalem and such a leave shall be enjoyed only
once during the period of service.
Maternity and Child Care Leave
A female having spent 10 months in the service of an employer
shall be entitled to a maternity leave of 90 days with full
wage payment including the period preceding giving birth.
The female employee is not entitled to this maternity leave
for more than twice during her working period.
During the 24 months following the date of child birth, she
has the right to one hour daily rest for breast-feeding her
child.
The Social Security System and
Public Health Insurance
Social security is a public program designed to protect individuals
and their families from income losses due to unemployment,
old age, sickness, or death and to improve their welfare through
public services (e.g. Medical Care).
For Egyptian employees, who must constitute a significant
part of a company's workforce, there is a social security
system under which the employer pays contributions equivalent
to approximately one-fourth of the salary earned, up to a
certain limit of salary.
Contributions in the private sector under social security
regulations are levied only on Egyptian nationals who are
in full-time employment. Contributions are required at the
following rates:
On the monthly basic salary up to LE 650, at 26% and 14%
for employer and employee, respectively; and on any amount
in excess of the basic salary (LE 650), or other allowances
or overtime, up to LE500 monthly, at 24% and 11% for employer
and employee, respectively.
For seasonal and temporary workers employed by construction
contractors, a different system applies, Social Security contributions
by the contractor amount to 18% of the percentage that labor
costs bear to total contract costs. This levy may significantly
increase labor costs on projects.
Benefits provided under the social security scheme are pensions,
disability payments, sickness payments, maternity and death
allowances, and unemployment insurance. These benefits are
not given to non-Egyptians.
All private sector companies in Egypt are required to provide
free health care for their Egyptian employees either through
the Medical Insurance Plan of the Ministry of Social Insurance
or privately. They are also required to contribute to the
Pension Insurance Fund of the Ministry of Social Affairs and
Insurance.
Other Benefits
1. Annual Increment
Employees are entitled to a periodical annual increment of
not be less than (7%) of the basic salary on which the social
insurance subscriptions are calculated. Thus until the National
Council for Wages issues the decisions regulating the payment
of that increment.
2. Overtime Pay
The minimum overtime premiums are 35 per/cent of normal pay
for overtime worked during daylight, 70 per/cent for that
worked at night, and 100 per/cent on rest days and 200 percent
on official holidays. Production incentive bonuses are tax-free.
3. Minimum Wage
Not yet determined by the National Council for Wages.
4. Profit Sharing
Employees of a Joint Stock Company, Limited Liability Company,
or Foreign Branch are entitled to a share in the distributable
profits. The share is fixed at an amount not less than 10%
of distributable profits and not more than the total annual
salaries of the employees. However, Limited Liability Companies
with capital less than LE 250,000 are not subject to this
distribution of profit share.
5. Bonuses
There is no obligation to pay annual bonuses.
Special
Requirements for Foreign Residents #CADDEF
Visas
Tourists and visitors are generally permitted to enter the
country with a minimum of immigration formalities. Except
for nationals from certain countries who must obtain visa
from the Egyptian Consulate in the country where they live,
most visitors require temporary visas to enter Egypt. These
are issued at ports.
1. Tourist Visas
Tourist visas are issued to foreign nationals visiting Egypt
for recreational purposes or to foreign nationals whose stay
in Egypt will not exceed three months. It is possible to renew
this visa for similar durations.
2. Temporary Visas
Temporary visas are issued to foreign nationals who are entering
Egypt for reasons other than recreational purposes and whose
stay will exceed three months but will not exceed one year.
Work Permits
All Egyptian workers, except part-time or temporary staff,
must obtain work certificates.
Foreigners interested in employment in Egypt have to obtain
work permits and follow the corresponding regulations issued
by the Ministry of Manpower and Migration in this regard.
After a work permit is obtained, the foreign national's visa
(whether tourist or temporary) is converted into a work visa,
with the same duration as the work permit.
Work permits are easier to obtain for technical staff than
for unskilled or semi-skilled workers. Work permits are usually
granted to foreigners for a period of one or less than one
year. It may also be issued for a period exceeding one year
after settling the relative fee for the requested period.
Documents Necessary for Obtaining Work And Residence Permits
for Foreigners in Egypt:
Filling the applications forms for work permits of foreigners
willing to work in Egypt. These application forms may be
obtained from the work permit department at the Manpower
and Training Directorate-Tahrir Complex.
Passport for perusal. It is important to apply while
residence is valid.
7 copies of passport size photographs of the foreigner.
2 copies of the company incorporation contract.
2 copies of the Tax ID Card.
A copy of the commercial register.
2 copies of the certificates of academic degrees and
experience of the foreigner.
The license for exercising the profession in the cases
where such license is required.
A memorandum justifying the recruitment of the foreigner
for that job, stating the reasons for not recruiting an
Egyptian as well as the tasks assigned to the foreigner
together with the name of the Egyptian assistant whose qualifications
and experience are consistent with the foreigner.
Approval of the related Authority (e.g. Investment Authority,
Egyptian General Petroleum Corporation … etc.).
A delegation from the company to the person who is going
to apply for the work permit on behalf of the foreigner.
A certificate from a public hospital or a recognized
laboratory such as the vaccination laboratory of the Ministry
of Health, confirming that the foreigner is free of HIV.
The approval of the concerned security authorities. This
can be arranged through the department of work permits at
the Manpower and Training Directorate at Tahrir complex.
Evidence of settlement of the work permit fees.
Fees for issuing the permit are set as follows:
Issuing the permit for the first time or on its renewal
for both Aliens and nationals of Arab countries is L.E.
1,000.
The fee should be due in full for the whole year or its
fractions.
