Procedures For Terminating the Agreement
Article 69 of the Labour Law provides that an employer is not entitled to terminate an employment contract unless the employee breaches the contract by committing a ‘grave fault’, following referral to a committee with judicial competence. Grave fault constitutes the following:
- An assumption of false identity or the submission of forged documents;
- Continuous violation of safety instructions;
- Absence from work for more than 20 non-consecutive or 10 consecutive days in a given year;
- Disclosure of the employer’s secrets, resulting in material loss;
- Competition with the employer in the same line of work;
- Being in an intoxicated state during working hours;
- Assault of the employer, general manager or any of the superiors; and
- Professional incompetence.
An investigation must be conducted with the employee before dismissal, and then the question of his or her dismissal should be referred to the Labour Court.
Instant Dismissal
If one party terminates an employment contract for no justified reason, the terminating party shall compensate the other party for the damage incurred as a result of terminating the contract. If the terminating party is the employer and the termination is unlawful, the employee shall have the right to claim compensation is not less than two-month wage for each year of service.
Employee's Resignation
The employee may resign at any time without prejudice to the notice period duration and under the conditions that the resignation must be in writing, or it shall not be considered, moreover, the reason for the resignation has to be legitimate and sufficient.
Termination On Notice
A two-month notice of termination must be given before the dismissal of employees whose service period does not exceed 10 years, and a three-month notice of termination must be given before the dismissal of employees whose service period exceeds 10 years.
Termination By Reason Of The Employee's Age
The retirement age by law is at least 60 years. The continuation of the employment relationship after reaching the age of 60 is at the discretion of the employer, provided that the wages entitlement age as provided in the social security law should always be considered and the employer must allow the employee to work until they reach the said age so they would be entitled to their full wages. The employer may not prematurely terminate the agreement.
Automatic Termination In Cases Of Force Majeure
The labour law is silent regarding force majeure cases, but the employer can request to terminate the company’s activity totally or partially or reduce its size or activity.
Collective Dismissals
An employer is allowed to terminate the company’s activity totally or partially or to reduce its size or activity and collectively dismiss employees for economic reasons. In this event, the employer is obliged to pay employees whose employment contracts are terminated for economic reasons a sum equal to one month of the employee’s total wage for each of his or her first five years of service and one and half month’s wage for each year of service after the first five years.
Termination By Parties’ Agreement
The parties may agree to terminate the employment contract upon a written notice delivered to the other party, in all cases both parties must comply with the notice period in case of termination.
Directors Or Other Senior Officers
Terminating/dismissing a senior officer or a director shall be done by the normal means of dismissing/terminating any employee.
Special Rules For Categories Of Employee
There are no special rules for specific category of employees, Labour Law prohibits discrimination.
Specific Rules For Companies in Financial Difficulties
If the employer, for economic reasons, would have to partially or wholly close/downsize his organisation, the employer should present a request of closure/downsizing of the company to the concerned authority. The authorities in coordination with the general federation or trade union, determine the numbers and names of the workers to lay off, in case the employer terminates some working contracts, the employee should take a compensation of one-month total wage for each of the first five years of service, and one and half month for each year to follow. The employer can change some conditions into the working contract and can reduce wages. In this case the employee can end his contract without abiding by a notice period.
Restricting Future Activities
According to the Civil Law, if the employee is engaged in the employer’s business to the extent of knowing trade secrets, and in contact with the employer’s clients, the parties may agree that the employee may not, after the termination of the contract, compete with the employer, nor participate in any project that competes with him.
Whistleblower Laws
Whistle-blowers are not regulated in Egyptian Law.
Special Rules For Garden Leave
According to the Law, if the employer sent a notification to the employee to terminate his employment contract, the employee is entitled in the notice period duration to be absent for a full day in a week or eight hours during the week in order to search for another job, while he is entitled to his wages for the days/hours of absence.
The employee has the right to choose the day or hours of absence, provided that he shall inform the employer one day prior to the absence.
Severance Payments
Severance pay is calculated at the rate of a half a month’s wage for each of the first five years of service and one month’s pay for each of the following years, and the indemnity is calculated on the basis of the last wage paid to the employee.
Special Tax Provisions And Severance Payments
Taxes imposed on employees’ salaries are payable by the employer, including the taxes imposed on employees’ shares of profits under Law No. 91/2005, as amended.
Allowances Payable To Employees After Termination
If an employee is unwarrantably dismissed, he/she is eligible to claim compensation. The compensation is decided and identified by the competent court, but must be at least two months’ full wages for each year of service or, in the event of a definite term agreement, the wage for the remainder of the contract period.
Time Limits For Claims Following Termination
The limitation period for bringing employment claims is one year of the termination or rescission of the employment contract.