Employment Contracts in Egypt

1. Minimum Requirements

The law requires that the employers conclude employment contract in writing in Arabic. However, in the absence of a written contract, and in case of dispute, the employee can prove the existence of an employment relationship as well as the content of the employment contract by any mean of evidence. On the other hand, the employer can evidence the employment relationship only by virtue of written means.

The contract must include the employer’s name and address; job title, job description and nature (full or part time); employee’s qualifications, profession or craft; his social security number and place of residence; and the salary and benefits.

2. Fixed -term/Open-ended Contracts

Three types of contracts may govern an employment relationship: fixed term, unlimited period contract and contract for performance of specific tasks. Deciding the type of the contract depends on employer’s policy as well as the relevant work market. However, the practice is to sign a one year fixed term contract with a new contract signed every year.

A fixed term contract terminates with the expiry of its term. There is no minimum term provided under the law. If the duration of the fixed term contract expires but both parties continue to perform the contract, this will be deemed as an automatic renewal of the contract for an indefinite period.

3. Trial Period

A probation period does not exist unless clearly stipulated in the employee’s contract. It must not exceed three months.

The employer can only appoint the employee under probation once, even if he contracts for a probation period of less than three months. In such case, the employer cannot conclude a new contract for the remaining period. However, the employer may hire the employee with a second contract subject to probation, if the job is different.

The period is suspended during the illness of the employee. Probation is also considered successfully finished if the employee is called to military service during such period.

During the three-month probation period, the employer can terminate the employment without any liability. No statutory notice is required in this case.

4. Notice Period

It is extremely difficult for the employer to terminate a limited period employment contract before the expiry of its term without being viewed as wrongful termination and consequently be held liable for compensation, usually in the value of the gross salary for the remaining duration. In this case, notice periods are those stipulated in the contract.

In case either party wishes to terminate an indefinite period contract, he must give not less than:

  • Two months’ notice, if the employee’s period of service is less than ten years; and
  • Three months’ notice, if the employee’s period of service is 10 or more years.

However, the employer cannot terminate indefinite period contracts, unless the employee has committed a fundamental breach such as those listed in the Labour Law. Recent court judgments show Egyptian courts approving the dismissal of employees for causes that are not mentioned in the Labour Law. However, the reasons of dismissal must show a flagrant breach on the part of the employee backed up with evidence. These grounds in practice are very difficult for the employer to establish, except in the most clear-cut cases.

The Labour Law stipulates that the decision of dismissal is to be taken exclusively by the Labour Court (not by the employer). Therefore, even if the employee committed one of the grounds for termination, the employer must report this to court to issue the dismissal decision.

For more information, please contact L&E Global.
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