• Who is the worker? As stipulated in article 1 of law no.12 of 2003 that any natural person works in return for a wage with and under the management or supervision of the employer. However, the law excludes the following categories:

•  a public servant of any entity, that includes the local government unit and the publicity department.
•  The domestic servant’s 
• employees’ family members.
• Who is the employer?  Article 1 of labour law defined him as any natural or judicial person employing one or more workers in return for a wage.

 After clarifying the parties of the employment contract and specifying the categories that fall under this law, the law provides regulations to protect the weakest party.

What does labour law cover?

As we mentioned above, Labour law is responsible for stipulating regulations to govern the relationship between the employer and employee. However, the parliament has agreed to amend articles to protect the employees. At first, the law started from drafting the contract and it regulated all the processes that the worker went through until the termination of the contract. In other words, there is no relationship between the employee and employer.

Here are the newest amendments that were issued on the 1st of January 2022:

Contract:

The contract is the foundation of any binding agreement that occurred between the employer and the employee. As everything is drafted in the contract for example the rights and the obligations of them. The employment contract is required to be written in Arabic and printed out in three copies to be given to the employer, employee and the social office.

The contract must include the following:

– Name of the employer and the address of the place of work. 

– Worker’s name, qualifications and profession or craft, social insurance number and home address.

 – work the subject of the contract. 

– Agreed upon wage and method and time of its payment, as well as any other benefits in cash and in-kind as agreed upon. 

– A probationary period of no more than three months.  

The new amendment states how fixed-term employment contracts turn into open-term contracts. The new law provides that a fixed-term contract (usually lasting for one year, but sometimes for two years) may be converted to an indefinite contract if the staff member continues to perform his or her duties after the expiration of the contract. If approved, the new law will provide that any employee who contracts for the same employer for four years (i.e., under four consecutive contracts of one year or two consecutive contracts of two years duration each) shall automatically enter into an open-ended contract.

Working hours:

The new Labour Code provides that the employer shall set the working day for each employee at a maximum of eight hours per day, or 48 hours per week, except for rest periods (which must be at least one hour). It also provides for employees to have at least one paid rest day per week. The bill also provides for companies to deduct at least one hour from each working day for pregnant women in the last trimester of pregnancy, and prohibits women’s overtime from the beginning of their pregnancy until the end of the second trimester of pregnancy.

Minimum wages:

The Egyptian legislator defined wages as everything that the worker obtains in return for his work, whether fixed or variable, in cash or kind. This includes commission, performance-based percentages, increments, bonuses, allowances, workers’ profit share and tips. Before the new amendment, the legislator stated that the minimum wage was 1200 pounds in a month but the new amendment has exceeded the minimum wage to 2400 Egyptian pounds. For the workers who are working in the private sector.

wages and annual bonuses:

The Egyptian legislator states the minimum percentage of the annual bonuses shall be equal to 3%of the basic wage based on which social insurance contributions are calculated, under article 12 of the law. The current law sets the annual bonuses at a minimum of 7% of the employee’s base wage.

Vacations :

• Annual leave:

After a full year’s employment, they will remain the same (21 days per year), but the new amendment sets a minimum annual paid leave balance of 15 days for those who have not completed a year of work. Employees who have spent 10 years or more in the civil service receive 30 days annually and employees over 50 years and persons with disabilities receive 45 days’ paid leave annually

• Maternity leave:

The new amendment issued an increase in the duration of paid maternity leave to four months before and after delivery, instead of three months in the current law. Article 50 stipulates that at least 45 days of total leave must be after childbirth. The law also sets the number of maternity leave for each working woman at a maximum of three for the duration of her service, rather than two in the current law. The new draft law also eliminates the requirement that an employee spends at least 10 months with the employer to be entitled to maternity leave.

Article 27 of the new amendment requires companies with 25 or more employees to grant two years’ unpaid extended leave to new mothers. However, The current Labour Code requires the company to have 50 or more employees to enjoy the new mothers. Lastly, the parliament rejected the proposed article that would have granted the new father a 10-day “paternity leave” within the six months following the birth of the child. 

Termination of contract:

The legislator stipulated several cases to terminate the contract:

• Two months’ notice in case of non-renewal of the contract:

The new amendment allows employers to decide not to renew a fixed-term employment contract – provided that they have the legal reasons to do so – provided that at least two months’ written notice is given to the other party, under article 131. However, if the employer decides not to renew the employee’s employment contract, he or she shall provide termination indemnity equivalent to one month’s wages for each year of service. The workers are also required to provide two months’ notice before leaving a fixed-term contract. This article will reduce the period of notice from three months to two months provided for in the current law.

• In case the employer wants to dismiss the employee:

Article 133 of labour law states that if the employer wants to dismiss an employee who works for him on an indefinite contract for a valid reason, the employer shall notify the employee for three months. However, The employer is exempt from this requirement to give notice in the event of a termination bonus equal to the employee’s salary for the period of notice. In case the employee who is working with an indefinite contract must also give three months’ notice before resigning.

• Illegal termination of the employment contract:

Article 142 from the new law stipulates that the employee terminates the employee with no illegitimate reason. Here, An employee shall be entitled to compensation equivalent to two month’s wages for each year of employment. The illegal reason for dismissal could be an employee being active in a trade union, filing a complaint or legal action against the employer for failing to meet the latter’s employment requirements; taking the permitted leave; or based on sex, race, socioeconomic status, religion, political opinion or pregnancy. What we understand is that if an employee on a fixed-term contract is dismissed without a valid reason, the employer must pay him the total salary that the employee would have received if he stayed in his job until the termination of the contract period.

Rights of disabilities under the new article in Labor law:

The law prohibited the following. “Any act, conduct or action which may make a distinction or distinction between persons in the terms or conditions of employment or the rights. duties arising from the contract of employment on grounds of religion, creed, sex, origin, race, colour, language, disability, social level, political, trade union or geographical affiliation; or any other reason for breaching the principle of equality and equal opportunities”.

Child labour:

The legislator stipulates in the new amendment of article 57 that anyone who does not reach 18 years old is considered a child. Moreover, the child is prohibited from work who does not reach 15 years, however, they can be trained at the age of 14, without preventing them from attending school. under article 58.

In conclusion, the Egyptian legislator tried to fulfill the missing parts and try to protect the employees by raising the minimum wage due to the pandemic that the world is facing.

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This new Amendment is an attempt to accelerate the employee\’s entitlement to the periodic bonuses, granting a special allowance to employees who aren’t subject to the Civil Service Law, increasing the additional incentive for state workers, deciding on a special grant for workers in public sector companies and the public business sector, and increasing the civil pensions.

The state will bear the cost of the early disbursement of the periodic bonus to those who are subject to the Civil Service Law and the special allowance for those not subject to it, in addition to the early disbursement of an additional incentive of 6.8 billion EGP as of the first of April, in addition to the cost of raising the percentage of the periodic bonus for those who are subject to the Civil Service Law, to be (8%) instead of (7%), and the special bonus for those not subject to it to be( 15%) instead of (13%),  at a total value of 1.2 billion EGP.

Law no.16 of 2022

Important Provisions of the New Law Explained

Article 1: Employees subject to the provisions of the Civil Service Law promulgated by Law No. 81 of 2016

The employees who are subject to the provisions of this law, as an exception, their entitlement to the periodic bonus shall be accelerated to be due on the first of April 2022, and this bonus shall be at the rate of (8%) of the job wage for each of them, on 31/3/2022, with a minimum of (100) EGP per month.

This bonus is considered as a part of the employee’s job wage from the 1^st of April 2022, without prejudice to the entitlement to the annual periodic increment established in accordance with the text of Article (37) referred to on its 1^st of July 2023.

Article 2: Employees who aren’t subject to the provisions of the Civil Service Law

1. The employees who are entitled to the periodic bonus, who aren’t subject to the provisions of the aforementioned law are accelerated, to the 1^st of April 2022, and as of this date, these workers are granted a special bonus of (15%) of their basic wage, for each of them, on 3/31/2022 or on the date of their appointment for those who are appointed after this date at a minimum of (100) EGP per month, and this allowance is considered as a part of the worker’s basic wage and is added to it as of 1^st of April 2022.
2. This special bonus which is stipulated in the first paragraph of this article doesn’t apply to public service bodies, economic public bodies and other public legal persons that pay the annual periodic bonus to their employees at a percentage of no less than (8%) of their job wage. If that allowance is granted at a rate of no less than (8%) of the basic wage, then these workers are granted as of 1/4/2022 a special allowance calculated on the basis of the difference between the percentage stipulated in the first paragraph of this article and the percentage on the basis of which the annual periodic allowance is calculated and includes the value of the special bonus for the basic wage for each of them.
3. The provisions of the aforementioned two paragraphs of this article don’t prejudice the entitlement of the annual periodic increment determined for the workers stipulated therein in accordance with the laws, regulations and special decisions regulating them from the 1^st of July 2023.

Article 3: Incentive increase

As of the 1^st of April 2022, the additional incentive for employees who are subject to the provisions of the Civil Service Law, and for employees not subject to it, will be increased monthly in cut-off financial categories by:

• 175 EGP for the fourth financial grades and below
• 225 EGP for the third financial degree
• 275 EGP for the second financial degree
• 325 EGP for the first financial degree
• 350 EGP for the degree of general manager/senior
• 375 EGP for the high degree
• 400 EGP for the excellent degree, or their equivalent

 Employees or workers, who are appointed after this date, benefit from this incentive and this incentive is considered as a part of the supplementary wage or the variable wage for each of them.

Article 4: Employees who are subject to this Law

State employees and workers in the application of the provisions of Articles 1, 2 and 3 of this law are permanent and temporary employees and workers with comprehensive remunerations, and those with public positions and fixed wages within the Arab Republic of Egypt whose financial appropriations are included in the budget and whose employment affairs are regulated by special laws or regulations, as well as workers in public service bodies and bodies general economic.

Article 5: The acceleration of the periodic bonus

As of the 1^st of April, companies grant their employees a monthly financial grant from their own budgets equal to the difference between the percentage of the annual periodic bonus assigned to them and the percentage of the special bonus established for workers In the country who aren’t subject to the provisions of the Civil Service Law promulgated by Law No. (81) Of 2016, according to the text of Article two of this law as a maximum, and this grant is calculated according to the same rules on the basis of which these companies calculate the periodic annual bonus for them, and this grant doesn’t include the basic wage and it is paid as a lump sum.

The provision of the previous paragraph of this article doesn’t prejudice the entitlement to the annual periodic bonus for the employees stipulated in it according to the regulations and decisions regulating it from the first of July 2023.

In cases where the total amount that the worker receives in the companies referred to in the first paragraph of this article from the basic wage, bonuses, allowances of all kinds, occasions and other fixed and semi-fixed items in the worker’s comprehensive wage, whatever its name, is less than 2700 EGP per month after applying the increase mentioned in the first paragraph, then the income of the worker shall be increased, to the difference, bringing the total amount the worker receives per month to 2,700 EGP, and the competent ministers set the rules for implementing this paragraph.

Article 6: Exceptions to pensions

1. As an exception from the provisions of Article (35) of the Social Insurance and Pensions Law promulgated by Law No. 148 of 2019 and Article (123) of the Law of Retirement, Insurance and Pensions for the Armed Forces, promulgated by Law No. 90 of 1975, the entitlement to increase pensions for 2022 is accelerated to become on the first of April 2022 for pensions due in 31/3/2022 and by the same rules mentioned therein, without prejudice to the entitlement of the increases that are decided as of the first of July 2023 on the dates stipulated in the two aforementioned articles.
2. The provisions of the increase referred to in the previous paragraph shall apply to the pensions established in accordance with the provisions of the aforementioned Social Insurance and Pensions Law, which are due during the period from 1/4/2022 to 30/6/2022, as of the date of pension entitlement.
3. The Social Insurance Fund stipulated in Article (5) of the aforementioned Social Insurance and Pensions Law shall bear the financial burden resulting from accelerating the disbursement of the prescribed increase in pensions according to its provisions.

Article 7: Cases in which the worker can’t combine the allowance in their pensions

It isn’t permissible to combine the allowance stipulated in the second and fifth articles of this law and the increase that is decided as of the first of April 2022 in the pension due to the worker on his own behalf, 

Taking into account the following:

1. If the worker’s age is less than the age determined for the end of his service, he shall be entitled to the special allowance. If this allowance is less than the increase in the pension, the pension shall be increased by the difference between them.
2. If the worker has reached the age prescribed for the end of his service, he is entitled to an increase in the pension if the increase in the pension is less than the increment, the difference between them shall be due from the entity in which he works.

Article 8: Decisions to implement the provisions

The Minister of Finance shall issue the necessary decisions to implement the provisions of this law, and the ministers, each within his jurisdiction, shall issue the necessary decisions to implement the provisions of Article 5 of this law.

Article 9: Date of application

This law shall be published in the Official Gazette, and shall come into force from the 1^st of April, 2022.

Conclusion

These new decisions from the Government come within the framework of the current developments on the global scene, which require rapid intervention to reduce the burden on the citizens, sending a message of reassurance to the citizens, that the political leadership and the Egyptian state leaders feel the pulse of the Egyptian street, and respond to its needs and aspirations.

Analysts and traders believe that the salary and pension increase starting from the 1st of April will positively affect consumption and economic growth during the upcoming period, ruling out that these increases will significantly affect inflation rates.

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