On 3 May 2025, Egypt enacted its new labor law No. 14 of 2025 (the “New Law”). The New Labor Law will enter into force on 1 September 2025.
The New Labor Law largely maintains the previously existing rights and obligations of employees under labor law no. 12 of 2003 (“Old Law”) and further recognizes new concepts which had previously not been expressly regulated, some of which require further elaboration under the Executive Decisions which are to be issued by 1 December 2025.
I. New Administrative Requirements:
As part of the administrative requirements under the New Law, employers are required to send to Ministry of Manpower, latest by 30 September 2025, a detailed statement of the number of employees, their qualifications, professions, age groups, nationalities, gender, and salaries.
Employers are also required to execute the employment contract on four counterparts instead of the three, with the additional one to be deposited at the Ministry of Manpower.
II. New Legal Principles
While the New Law widely maintains long-established legal principles that were in the Old Law, it introduces many new legal principles, the main ones are set out in the following:
1. Termination of Fixed Term Employment
While the ambiguity on the specific compensation for an early termination of a fixed term employment from the Old Law still persists, the New Law introduces a new obligation of compensation on employer in case of fixed-term employment contracts that are concluded or renewed for more than five years. In this latter case, its premature termination by the employer after such period would be subject to compensation to paid to employee of one-month’ salary per year of service.
2. Termination of Indefinite Term Employment
The compensation in case of termination of indefinite employment relationship that used to apply if the employer terminates the employment relationship without justifiable cause, now applies under the New Law- if the employer terminates the employment relationship for illegitimate reason, examples of which are provided under the New Law. It remains to be seen whether the intention of the new language is to widen the cases of permissible termination by the employer.
Further, the notice of termination under the New Law is now increased to three months, regardless of the employee’s years of service with the employer’s.
3. Annual Leave
The New Law limits the annual leave entitlement during the first year of employment to 15 days. Starting the second year, the annual leave increases to 21 days, then to 30 days for employees who have served for 10 years with the same or more employers, or who have reached the age of 50. As an exception to the foregoing, employees with disabilities are entitled to 45 days.
While the New Law maintains the pro-rated leaves for employees whose service is less than one year provided that they have served six months in the employer’s service, it provides for the same minimum annual allowance of 15 days, which is strangely the whole entitlement of leave for the first year. This means that the employee who has spent more than six months but less than a year in service will be entitled to the whole leave entitlement of 15 days. This discrepancy did not exist under the Old Law and will need to be clarified.
The casual leave has also increased by one day to become seven days per annum, still subject to a maximum of two days per event, and still to be deducted from the annual leave.
4. Sick Leave
In relation to non-industrial employment facilities, the Old Law foresaw a sick leave for when the employee is proven to be ill, without any further conditions as regards how such sickness affects the employee’s ability to work.
Under the New Labor Law, the illness of injury that entitles an employee to sick leave is the one that prevents him from performing his work, and is determined by the competent medical authority. In that case, is the employee would be entitled to compensation for their salary according to the percentage and duration to be determined in accordance with the provisions of the Social Insurance and Pensions Law. The New Law does not elaborate on whether the employer will also be responsible to compensate the employee’s actual salary based on the same percentages and durations as foreseen under the Social Insurance Law.
5. Overtime
The New Law has substituted the prior authorization of the competent authority for overtime, with a post-notification to the Ministry of Manpower within 7 days from the overtime incident. The cap of 10 actual working hours has been omitted and replaced by a cap of 12-hour presence at the workplace.
6. Digitalization
Electronic Signature: The employment contracts may now be concluded in wet-ink or electronically. The New Law does not address any specific requirements for e-signature in the case of electronic contracts. In any case, the employer and employee are entitled to evidence employment relationship by any means of proof.
Salary Transfer: The New Law now expressly permits evidencing the salary payment by proof of bank transfer.
Digital Records Maintenance: The employees’ files maintained by the employer may now also be in electronic form, and maintenance period is increased to 5 years as of end of employment, for digital and physical files. Employees, on the other hand, are now expressly prohibited from maintaining, or allowing third parties access to, digital copies of employer’s documents.
Electronic Registry and Communication: Reference to registers under the New Law, whether maintained by the employer or the relevant authorities now expressly refers to “paper or electronic registry”. Similarly, employer’s communication and regular data updates vis-à-vis the authorities may include electronic communication.
Nevertheless, the New Labor Law is unclear on whether the electronic means would also be recognized and permitted for resignations, internal rules, termination, disciplinary actions, and leaves. Unless an executive decision would be issued to further regulate this matter, it is expected to be clarified through court practice.
7. Unconventional Work Set-Ups
The New Law now recognizes ‘unconventional’ forms of employment that are subject to the same rights and obligations of traditional work arrangements. These forms include (i) Remote work; (ii) Part-time; (iii) Flexible-hours work; (iv) Job sharing,; and (v) any other forms specified by a minister’s decision.
In such new work patterns, the parties may agree that the employee may work for more than one employer, provided that the employee does not disclose business secrets. It may also be agreed that the employee may be self-employed in addition to working for others. Female employees caring for children with disabilities or dwarfism are specifically entitled to work remotely or with flexible working hours. The internal regulations of the establishment shall include the relevant rules under the female employees’ working conditions.
8. Workplace Mobbing
The New Labor Law now defines harassment and bullying and criminalises harassment, bullying, or practicing of any verbal, physical, or psychological violence against employees whether by traditional or technological means.
Failure by the employers to maintain a safe, non-hostile work environment and to prevent harassment, bullying, and violence, and is also criminalized.
9. Annual Increment
The New Labor Law entitles the employees to a periodic annual increment of no less than 3% of the social insurance salary, which falls due upon the lapse of one year from the date of appointment, or from the due date of the previous periodic increment, as the case may be. In case of economic circumstances, employees must seek approval from the National Wages Council to reduce or waive the increment.
10. Maternal and Parental Rights
Maternity Leave: This is now increased to four months including the period before and after childbirth, provided that the period after childbirth must, not be less than 45 days. The entitlement of maternity leave applies for a maximum of three times throughout employee’s service, but now regardless of her years of services with the employer.
Termination: In addition to the maintained prohibition of termination of the employment relationship during the employee’s maternity leave, the New Law now prohibits such termination to occur immediately after her return from this leave, unless the employer proves that such action was for a “legitimate reason”. What constitutes a legitimate reason, in this case, is not clarified under the law.
Childcare: The New Labor Law now matches the number of childcare leaves under the Childcare Law being a maximum of three times throughout the employee’s years of service. This, however, applies under the conditions that (i) the employee must have been employed for at least one year by the employer and (ii) the period intercepting childcare leaves must not be less than two years.
Paternal Leave: Male employees are now entitled to emergency paid leave on the day of birth of their child, which shall not be deducted from his annual leave balance, up to a maximum of three times throughout the period of service.
11. Resignation Process and Formalities
The New Law now introduces an approval requirement of the employee’s resignation by the Ministry of Manpower before it can be submitted to employer. The employer has 10 days to assess and respond to such resignation, and the employee is entitled to withdraw the resignation within another 10 days from the date on which they are notified of the employer’s acceptance .
Noteworthy is that, the New Law now considers unauthorized absence as deemed resignation bythe employee, subject to the same period thresholds and notice requirements as under the Old Law.
12. Retirement Age and Pension
On the termination of employment for reaching the age of 60, the New Law refers to the pension rights being regulated under the Social Insurance Law. Given that gradual increase of retirement age under the Social Insurance Law, further elaboration is needed on how to address the gap between the retirement thresholds under the two laws.
13. Medical Tests
The New Law allows the employer to request the employee to take a test for infectious diseases and drugs. The consequences of employee’s rejection to take such tests are not addressed.
14. Manpower Supply License
The New Law maintains the possibility to obtain a manpower supply license, with the same thresholds for national ownership and management. It, however, stipulates a higher insurance of EGP one million. The New Law further restricts the practice of manpower supply activities through electronic means, except with prior permission by the Ministry of Manpower.
15. Dispute Resolution
The New Labor Law establishes a specialized “Labor Court” within the jurisdiction of each court of first instance, and court of appeal . The effective date of the introduction of these specialized courts is deferred to 1 October 2025.
In relation to collective employment contracts, the New Law foresees the establishment of a “Mediation and Arbitration Centre” within the Ministry of Manpower to which either party may resort in case of dispute that cannot be resolved by mediation within 21 days.
16. Penalties
Penalties thresholds have generally increased under the New Law and now range from EGP 1,000 to EGP 100,000. This is in addition to imprisonment in case of provision of unlicensed manpower supply services, whereas violation of Health and Safety provisions is no longer punishable by imprisonment.
Finally, the person responsible for the actual management of the establishment shall be subject to the same penalties of employer if they were proven aware of the violation and their breach of their duties has contributed in such violation. The juridical entity, on the other hand, would be jointly liable with such person for financial penalties and compensations
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