OUTLINE
Notice periods in Egypt
Termination of employment in Egypt
Post-termination restraints in Egypt
Waivers in Egypt
Transfer of undertakings in Egypt
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End of employment in Egypt
Every country has certain rules to follow when an employment relationship comes to an end. It’s important for employers to understand the various circumstances in which they can end a contract in Egypt and the specific process they have to follow.
In this section, we’ll cover everything you need to know about the end of the employment relationship in Egypt, including notice periods for employers and employees, reasonable grounds for termination, and the situations when severance pay is needed. We’ll also discuss the various post-termination restraints you can impose on your employees in Egypt, as well as what happens to employees after a transfer of undertakings.
Notice periods in Egypt
Both employers and employees in Egypt must adhere to the proper notice period if they want to terminate their employment agreement. These are defined by labour laws, though collective bargaining agreements and individual employment contracts may provide different conditions. Read on for everything you need to know about notice periods in Egypt.
Notice periods for employers in Egypt
The statutory notice period in Egypt is two months. This is extended to three months for employees who have worked for the same employer for ten years or more. However, there are certain exceptions to notice period rules in Egypt:
- Fixed-term contracts: Fixed-term contracts are expected to continue until the expiry of the term. However, they may contain provisions for notice periods should either party want to terminate the contract early.
- Serious misconduct: Employers can dismiss employees without notice in cases of severe misconduct such as theft or violence.
Notice periods for employees in Egypt
Notice periods in Egypt for employees who want to resign from their position are the same as those for employers: two months for employees with less than 10 years of service, and three months for those with 10+ years of service.
Giving and receiving notice in Egypt
Both employees and employers in Egypt should give notice in writing. Employees are required to continue performing their duties during their notice period, and employers must maintain all contractual obligations including salary and benefits. When an employer gives notice to an employee, they should include their reason for terminating the contract in the written notice. Employees are not required to give a reason for resigning from a position.
Severance pay in Egypt
Employees in Egypt are entitled to severance pay if their contract is terminated without a valid reason as outlined by Egyptian labour laws. Severance pay is calculated as half a month’s salary for each of the employee’s first five years of service, and one full month’s salary for each subsequent year of service. For example, an employee being dismissed without a valid reason after seven years of service would receive severance pay amounting to 4.5 months’ wages.
Probationary periods in Egypt
The point of a probationary period is to give both the employee and the employer a chance to test out the employment relationship before committing for the long term. This allows both parties to assess their suitability for each other. In Egypt, probationary periods are permitted as long as they don’t exceed the statutory maximum period of three months. During this period, neither party has to give notice to terminate their contract.
Termination of employment in Egypt
There are several different ways an employment contract can be terminated in Egypt according to local labour laws. Here are a few of the situations you may come across as an employer.
Termination by mutual agreement in Egypt
An employer and an employee in Egypt can agree to end an employment contract between themselves. This mutual termination must be clearly documented in writing to ensure that both parties understand and agree to the terms of the termination.
Termination of employment for cause in Egypt
Employers in Egypt can terminate employees’ contracts on disciplinary grounds if the employee’s behaviour warrants it. For example, an employee may be terminated for repeated violations of work rules, unexplained absences, incompetence, or negligence. In the most serious cases (gross misconduct), employees may be terminated without notice.
It is also possible to terminate an employee in Egypt if they are convicted of a felony or an offence that offends honour, trust, and public morals. There must be a final verdict in order for this to be a valid reason for termination.
Lastly, employers may terminate an employee’s contract in the event of their total incapacitation that renders them unable to do their job. However, partial incapacitation is not a reason for termination unless there are no other roles suitable for the employee.
Termination due to economic reasons in Egypt
Employers in Egypt may also terminate employees due to economic reasons. In this case, specific procedures apply. First, the employers must submit a formal request to the Ministry of Manpower and Migration, outlining the reasons for termination and the number of employees affected. They must then negotiate with the labour union (if there is one) to ensure the termination procedure is as fair as possible. Lastly, employers must develop objective criteria for selecting employees for termination, such as seniority or performance.
Post-termination restraints in Egypt
Post-termination restraints are restrictions that employers can impose on former employees. In Egypt, these are legal and enforceable as long as they are reasonable and designed to protect the employer’s legitimate business interests.
Types of post-termination restraints in Egypt
As an employer, you may be able to enforce the following types of post-termination restraints in Egypt depending on your specific circumstances:
- Non-compete agreements: These prevent former employees from working for or establishing a competing business, usually within a certain geographic scope and time period.
- Customer non-solicit agreements: These prohibit employees from approaching or ‘poaching’ customers of their former employer after the end of their employment agreement.
- Employee non-solicit agreements: Similarly, these prevent employees from poaching employees from their former employers.
Limitations on post-termination restraints in Egypt
In Egypt, post-termination restrictions are typically only enforceable if they meet strict conditions such as a reasonable scope, duration, and geographic limitation. They must be considered reasonable by Egyptian labour standards. In certain circumstances, employers may also be required to provide compensation to employees during the restricted period.
Waivers in Egypt
In many countries, employees can waive certain rights in the context of a settlement agreement to end an employment relationship. Waivers are enforceable in Egypt, but they can only be used to waive acquired rights, not future rights.
Transfer of undertakings in Egypt
A transfer of undertaking is when one business entity is wholly or partially acquired by another, such as through a sale, merger, or other business restructuring. This impacts the rights and responsibilities of both employees and employers.
Employee rights after a transfer of undertaking in Egypt
Unlike in many other countries, there are no specific regulations governing transfers of undertaking in Egypt. This means that continuity of employment depends on the terms agreed between the transferer and the transferee. Employees may be offered new contracts by the transferee, but this is not required by law and the new contracts may include conditions that are different from the employees’ original terms of employment.
Equally, Egyptian employment law does not require employees to consult with or inform employees or their representatives about an upcoming transfer. This is unlike other jurisdictions where such consultations are mandated to protect employee rights. Without clear legal guidelines, there is a high potential for disputes during a transfer of undertaking in Egypt. It’s best practice for employers to communicate clearly with employees to ensure any such disputes are resolved quickly.
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There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Egypt — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
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