Unfair dismissal in accordance with Egypt’s Labor Law

Youssry Saleh & Partners 20 Feb 2023 1462 Views

The Egyptian Labor Law No. 12 of 2003 is primarily in charge of regulating employment matters. Nearly all employment arrangements in Egypt, whether the employer is an Egyptian person or business or includes both Egyptian and foreign employees, are governed by the Labor Law.

For problems not covered by the Labor Law, employment interactions are additionally handled on a larger scale by the Egyptian Civil Code. Furthermore, the Egyptian Social Insurance Law No. 25 of 1977 governs a portion of the work relationship.

The Labor Law sets out a general rule regarding the enforceability of its provisions in which any preferable conditions, in favor of the employees, set by the employer will supersede the provisions of the law. Therefore, if the employees enjoy any preferable conditions, these will prevail over the Labor Law’s provisions.

In light of the Labor Law, employers have many obligations towards both their employees and various authorities. Initially, the employer must pay the employee’s income tax on behalf of an employee by deducting the relevant tax amount from the employee’s salary. Deliver the deducted due amount to the Egyptian Tax Department.

NB:  The employee’s income is also sent to the insurance authority after deductions have been made from the agreed-upon sum in the employment contract in order to protect the amount of the financial pension when he reaches the retirement age, which is defined as sixty years old in the Labor Code (60).

Although, it should be mentioned that the Authority bases the amount of insurance offered on the lengths of time an employee worked for the business. For example, if an employee works for 10 years, the Authority bases the amount of insurance the employee will take over the 10 years.

• Termination of the contract:

NB:  The Egyptian Labor Law states that if the employment contract is terminated by the employer without a valid cause, the court will compensate the employee with at least two-months’ full salary for each year of the employee’s service with that employer, in addition to other entitlements (such as any accrued annual leaves, bonuses, profit share, and so on).

The difference between an employment relationship for a definite period and a contract for an indefinite period is essential when considering the termination of the employment contract by the employer. For both definite and indefinite contracts, an employment relationship can be terminated without compensating the employee in any of the following cases:

1. On the poor performance of the employee provided the required legal measures are undertaken by the employer before terminating the contract.
2. When the employer discovers, during the employee’s contractual probationary period, that the employee is not fit for the job.
3. On redundancy, after obtaining the approval of the competent committees (in this case the employee is entitled to a reduced compensation).

According to the law, it is quite challenging to end an employment contract before the end of its term without having it deemed unjust and consequently being held accountable for compensation. A worker cannot be fired unless they have engaged in one of the fundamental offences outlined in Article 69 of the Labor Law.

NB: The right of the employer to terminate an employee’s employment without cause during the first three months of employment is one of the most essential concepts to acquire. However, that must be disclosed and acknowledged in the employment contract.

Each general rule, meanwhile, has an exception, and if the contract has a provision stating that the employee is entitled to pay or to notification prior to termination during the first three months of employment, that provision must be fulfilled and respected.

• Employees’ options for contesting unjust termination:

The termination will likely be seen as unlawful, and the employer will be required to pay damages if it occurs before the end of the term of an employment contract without one of the fundamental breaches mentioned above being committed by the employee.

The minimum restitution required by law for the wrongful termination of unlimited-term contracts is two months’ gross pay for each year of service. Although this is the legal minimum, courts very rarely decree higher amounts unless there has been egregious injustice.

The employer must also pay the employee an amount equal to his wage for the remainder of the notice period or the entire notice period if the contract is terminated without notice or before it expires.

Courts typically award pay in limited period contracts in an amount equal to the gross salary for the remaining term of the agreement (unless the employee is still under probation).

NB: It should be highlighted that the first action a worker must take to protect his first right is to go to the workers’ office and give a thorough explanation of the circumstances surrounding their separation and the occurrences that have already taken place.

Among what has been approved in the Labor Law no. 12 of the year 2003, Article 69: “It is not permissible to dismiss a worker unless he commits a grave mistake, such as, for example:

• If it is proven that the worker has impersonated an incorrect person or submitted forged documents.
• If it is proven that the worker committed a mistake that resulted in serious damages to the employer, provided that the employer informs the competent authorities of the accident within twenty-four hours from the time he became aware of its occurrence.