A Legal Guide for Factory Owners: How to Avoid Egyptian Labor Law Violations?

Introduction:

Industrial enterprises are key drivers of the national economy; therefore, they shall be subject to a precise legal and regulatory framework aimed at governing the labor relations and protecting the rights of all parties.

The Egyptian Labor Law is at the forefront of this legislation, serving as a fundamental reference for defining the duties and rights of both factory owners and their employees. Full compliance with the Labor Law law’s provisions is crucial for industrial establishments from a legal, economic, and social perspective.

The Labor Law protects workers from exploitation, such as excessive working hours or unfair wages, and guarantees rights including leave, health insurance, and compensation for injury or unfair dismissal. Furthermore, it ensures a safe working environment by requiring businesses to implement occupational safety and health measures, thereby reducing workplace accidents and injuries and fostering stability and productivity. Ultimately, this contributes to a stable and productive work environment, preventing labor disputes and legal penalties that could threaten the continuity and growth of these establishments.

Therefore, understanding and applying the Law’s provisions properly act as a strong deterrent against legal violations and ensure smooth operations.

The most prominent legal violations that factories fall into:

Factories in Egypt face many challenges related to compliance with the Labor Law and may fall into various legal violations, most notably:

Violations related to labor contracts and conditions:

• Failure to draft written labor contracts or to include the legally required basic data.
• Failure to comply with new labor contract forms issued by the Ministry of Labor in accordance with recent amendments.
• Failure to include new work patterns approved by the amended law, such as remote work and job sharing.
• Attempting to force a worker to sign Form 6 (resignation form) before or during employment.
• Failure to comply with the minimum wage set by Law.
• Failure to pay the periodic bonus, which must be at least 3% of the insured wage according to the latest amendments.
• Forcing the worker to do work that is not agreed upon in the labor contract.
• Unjust dismissal of a worker without a legal basis.
• Failure to grant the worker their legal entitlements upon termination of contract, such as the end-of-service bonus and vacation allowance.

Violations related to working hours and vacations:

• Employing workers for hours exceeding the designated working hours stipulated by Law, without obtaining approval from the competent authorities or paying overtime wages.
• Failure to give workers the daily and weekly rest periods.
• Failure to enable workers to take their annual vacations.
• Failure to reduce the working hours of pregnant women by at least one hour from the sixth month of pregnancy and prohibiting their overtime work during pregnancy and up to six months postpartum.
• Failure to grant workers the right to alternative leave for public holidays worked, in addition to overtime pay.

Violations related to occupational safety and health:

• Failure to provide a safe and healthy working environment for workers.
• Failure to provide the necessary personal protective equipment for workers in hazardous work.
• Failure to provide necessary training to workers on safety and risk prevention procedures.
• Failure to conduct comprehensive periodic medical examinations for workers exposed to occupational hazards.
• Failure to take the necessary precautions to prevent fire and industrial accidents.

Violations related to the rights of working women:

• Discrimination against working women in wages or promotions, as recent amendments emphasize anti-discrimination and impose penalties on violating businesses.
• Failure to provide nurseries for the children of working mothers in businesses with more than 100 workers or failure to subsidize the costs of external nurseries.
• Firing or terminating a working woman during her maternity leave, which is explicitly prohibited by law.

Violations related to the employment of labor:

• Employing underage children or in jobs that are prohibited for them.
• Failure to comply with the legally prescribed employment rates for people with disabilities.
• Discrimination between workers in wages or working conditions on the basis of gender, religion, or any other unlawful reasons.
• Employing foreign workers without obtaining the necessary permits or in violation of permit conditions, reflecting a trend towards stricter procedures and prioritizing Egyptian workers.

Procedural and organizational violations:

• Failure to maintain the records and books stipulated in the Labor Law and the related ministerial decisions.
• Failure to notify the competent authorities of changes in the businesses or their employees.
• Obstructing the work of Ministry of Labor inspectors or failing to provide them with the required data.

Penalties for violations:

The Egyptian Labor Law provides for a variety of penalties to be imposed on factory owners if they commit violations of its provisions. These penalties range from:

• Fines: This is the most common penalty, and its value varies depending on the type, severity, and frequency of the violation. The fine may be doubled if the violation is repeated within a certain period.
• Imprisonment: In serious cases posing a risk to worker safety or public health, the law may stipulate imprisonment in addition to a fine.
• Closure of the business: In extreme cases where serious violations are repeated or pose an imminent danger, the competent authorities may decide to close the buisiness temporarily or permanently.
• Criminal Liability: In some cases that result in injuries or fatalities due to negligence or non-compliance with occupational safety and health rules, the factory owner or officials may be subject to criminal liability.
• Damages: In addition to the penalties stipulated in the law, the court may require the factory owner to pay compensation to the injured worker as a result of the violation.

Legal tips to ensure full compliance with the provisions of the Labor Law as per the latest amendments:

To avoid violations of the Egyptian Labor Law and ensure full compliance with its provisions, the following legal guidelines are recommended:

1. Deep understanding of Labor Law: Factory owners and administrators which are responsible for employee affairs must be fully familiar with the provisions of the Labor Law, its executive regulations, and relevant ministerial decisions.
2. Keeping legal knowledge up to date: Follow up on any amendments or new laws issued in the field of labor and update the businesses’ internal policies and procedures to comply with them.
3. Draft clear labor contracts: Written employment contracts should be prepared for all employees, clearly outlining all essential data and working conditions, including job type, wages, working hours, vacations, and other rights and duties.
4. Commitment to wages, working hours, and vacations: Adhere to the minimum wage, pay wages on time, do not exceed the legal working hours, and give workers their due rest periods and vacations.
5. Providing a safe and healthy work environment: All necessary measures must be taken to provide a safe and healthy working environment for workers, provide personal protective equipment, conduct periodic medical examinations, and adhere to occupational safety and health rules.
6. Training and awareness: Training programs must be provided to workers on their rights and duties, and awareness sessions on occupational safety and health must be conducted.
7. Maintaining required records and documents: All records, books, and documents required by the Labor Law and ministerial decisions must be maintained and updated regularly.
8. Cooperate with Ministry of Labor inspectors: Cooperate fully with the Ministry of Labor inspectors, provide them with the required data and information, and facilitate the performance of their duties.
9. Settle labor disputes amicably: If any labor dispute arises, it is preferable to try to settle it amicably through negotiation or mediation to avoid resorting to the judiciary.
10. Regular legal counseling: It is recommended to hire a specialized legal consultant periodically to review the business’s labor policies and procedures to ensure that they comply with the provisions of the law and avoid any potential violations.

Therefore, we emphasize the critical importance for factory owners to adhere to the provisions of the Egyptian Labor Law and its ongoing updates as a fundamental step towards avoiding legal violations and ensuring a stable work environment.

At Shura Law Firm, we are fully prepared and ready to provide specialized legal consultations to factory owners on all matters related to the Egyptian Labor Law and how to avoid its violations. We are also prepared to handle all necessary procedures, provide comprehensive consultations, and defend their rights in any labor disputes.