Libyan employment law requires companies to ensure that a certain percentage of their employees are Libyan, which may be as high as three-quarters for some categories of employers. There are also provisions for a minimum wage, social security and protection for participation in trade unions. The law also places notable emphasis on family and on the rights of workers, with employees being entitled to periods of leave on marriage, maternity, bereavement and emergencies.
Issues arising on hiring individuals
All expatriate employees must be registered with the Ministry of Labour, and hold an employment permit and residence visa. As part of the application process, the employees must enter into a valid employment contract. In addition, expatriate employees must have one of a number of specified job titles in order to be permitted to work in Libya. Certain jobs are reserved for Libyan nationals or those granted similar rights by the state.
Employment of Libyan nationals
As noted above, employment is a right of Libyan nationals, and companies are required to ensure that a minimum percentage of their workforce is made up of Libyan nationals. In many cases, this minimum can be as high as 75%, although certain companies are only required to ensure Libyan nationals represent 30% of their workforce pursuant to various exemptions under investment law.
Exceptions to the nationalisation quotas are allowed in certain cases, such as specialist roles, where it is in the public interest to allow a relaxation of the rules. However, this requires a resolution from the Ministry of Labour allowing the reduction in Libyan national employment.
Employment structuring and documentation
All employees must enter into a prescribed form employment contract which is registered with the Ministry of Labour. There are two different forms of the employment contract depending upon whether the employee is a Libyan national or expatriate.
As a general rule, the Libyan Labour Law sets out the minimum employment entitlements and standards. These can be exceeded to the employee's benefit, by agreement between the parties, but cannot be reduced or excluded to the employee's disadvantage.
Contracts may be for either fixed or unlimited terms in accordance with the Libyan Labour Law. The maximum duration for a fixed-term contract is two years, which may be renewed once, after which the employment becomes an indefinite (unlimited) term contract with minimum notice provisions.
Issues arising during the employment relationship
Wages, annual leave and working time
The current minimum wage in Libya is approximately LYD 450 (approx USD 316) per month; however few will work for this rate.
The minimum entitlement to paid annual leave under Libyan Labour Law is 30 working days, which increases to 45 working days for those over the age of 50 years or who have attained 20 years' service. An employee can take 20 days' paid leave to perform Haj once in their employment.
With the exception of certain professions, the maximum normal working hours is 48 hours per week and ten hours per day. Friday is the statutory day of rest each week. Overtime should not exceed three hours per day and is payable with a 50% uplift on the normal hourly wage.
An employee is entitled to two weeks' paid marriage leave once during their employment. A female employee is also entitled to paid leave of four months and ten days, following the death of her husband.
The Libyan Labour Law entitles a female employee to 14 weeks' paid maternity leave, including a compulsory leave following delivery of not less than six weeks. Where the woman has more than one child, the paid maternity leave is extended to 16 weeks. The Libyan Labour Law includes certain protective provisions which prohibit a woman from being dismissed on the grounds of her pregnancy or maternity leave.
Employees are entitled to emergency leave, of up to 12 days in a year, of which no more than three days may be taken on one occasion. An employee may take this emergency leave without obtaining prior approval from the employer, provided that the employee is able to provide justification for the leave on return to work.
There is no social security legislation applicable to expatriate employees. However, an employer is required to make payments to the social security fund in respect of Libyan nationals.
Issues arising on termination of the employment relationship
An individual employed under an unlimited term contract must be given at least 30 calendar days' notice of termination. Where an employee is subject to a fixed term, either party may only terminate the contract where certain specific circumstances arise. In each case, where the reason for termination is not valid, the defaulting party may be liable to pay compensation to the other party, to be determined by the Court.
An employer is obliged to pay an end of service gratuity to expatriate employees who are not covered by the Social Security Fund. End of service gratuity is calculated by reference to length of service.
The Libyan Labour Law contains an exhaustive list of reasons from which either party may terminate employment without notice due to the conduct of the other party
Collective disputes The Libyan Labour Law contains a workforce disputes procedure. In addition, an employee may not be dismissed by reason of participation in a labour association or trade union.
Published in collaboration with L&E Global: an alliance of employers’ counsel worldwide
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