At a glance: termination of employment in Egypt

Termination of employment

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

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.

If an employee is unwarrantably dismissed, he or 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 salary for the remainder of the contract period.

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of 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. The employer may provide pay in lieu of notice.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

An employer may not dismiss an employee without prior notice or payment in lieu of notice.

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

The Social Insurance Law (Law No. 79/1975) establishes the right to severance pay upon employees reaching the age of 60. 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 salary paid to the employee.

Are there any procedural requirements for dismissing an employee?

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 Bureau or the Labour Court (articles 69 and 71 of the Labour Law).

In what circumstances are employees protected from dismissal?

The Labour Law only protects an employee from unwarranted dismissal and, during the life of the employment contract, gives the employee the right to sue the employer for his or her rights and benefits that have not been duly provided by the employer.

Are there special rules for mass terminations or collective dismissals?

Collective labour relationships are addressed under Book 4 of the Labour Law (articles 145 to 201). An employer is allowed to terminate activity of the establishment 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 salary for each of his or her first five years of service and one-and-a-half month’s salary for each year of service after the first five years.

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Collective actions are allowed by law where an employer's abuse relates to a group of employees. At the same time, individual actions against the employer are also allowed.

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

The retirement age by law is 60 years. Continuation of the employment after reaching the age of 60 is at the discretion of the employer until the end of the ongoing project.