New Labour Law issued in Egypt

After years of anticipation, the new Labour Law no. 4 for 2025 (the New Labour Law) was published on 3 May 2025 in the Egyptian Official Gazette to replace the current Labour Law no. 12 for 2003 (the Current Labour Law). The New Labour Law, which will enter into effect on 1 September 2025, aims to overhaul outdated regulations and align Egypt’s labour framework with modern economic and social developments. In a big step forward, as well as various statutory changes it also introduces separate specialised labour courts which is a welcome change that is expected to expedite the resolution of labour disputes.

The New Labour Law introduces contemporary concepts designed to support both workers’ rights and investor interests, marking a significant step forward in the evolution of labour relations in Egypt. It ensures consistency and alignment with other applicable laws, reinforcing a more coherent and integrated legal system.

In this article, we have highlighted below the main changes made to the Current Law as well as the new concepts introduced under the New Labour Law, as follows:

Transition from current labour law:

• The New Law will come into effect on 1 September 2025. The specialised labour courts established under the New Labour Law will begin operating as of 1 October 2025.
• Employers must submit a comprehensive statement to the Ministry of Manpower within 30 days of either (i) the New Law coming into effect or (ii) the commencement of operations by the establishment—whichever is applicable. The statement should include details on the number of employees, their qualifications, job titles, ages, nationalities, genders, and the wages they receive.
• The intention behind the three-month gap period until the New Labour Law enters into force is to give employees and employers adequate time to prepare for the changes.
• It is important to note that the New Labour Law does not impact any rights granted to the employees under the provisions of any laws and regulations prior to its enforcement.

Annual salary increase:

• Employees are now entitled to an annual raise amounting to no less than 3% of the employee’s social insurance salary. This annual raise is due one year after the employee's appointment date or from the date of entitlement to the previous raise, whichever is applicable.

Training fund fees:

• The contributions payable to the Training and Rehabilitation Fund have been reduced under the New Labour Law. Establishments are now required to contribute 0.25% of the minimum social insurance wage (instead of the previous annual payment of 1% of net profit) on a monthly basis. The contribution is required by entities with 30 employees or more as opposed to the previous threshold of 10 employees. 
• Possible exemptions (subject to the approval of the Minister of Manpower) regarding payment of the training fund fee may be given to establishments that provide training programs to their employees.
• More importantly, the New Labour Law terminates all current pending cases which have not yet been finally adjudicated between the Training and Rehabilitation Fund and establishments provided that the dispute is related to the collection of the previously required 1% contribution.

People of determination:

• Establishments with 20 or more employees are required to employ 5% of their workforce from people of determination. The New Labour Law now requires employers to maintain a digital or physical register for people of determination.

Maternity leave:

• The maternity leave period has been increased under the New Labour Law to 120 days as opposed to the previous 90 days under the Current Labour Law. Female employees may take maternity leave for a maximum of three times (which is an increase to the previous limit of two times).
• The New Labour Law also obliges employers to reduce the working hours for pregnant women by one hour daily starting from the sixth month of pregnancy and prohibits them from working extra hours throughout the pregnancy and for six months after giving birth.

Paternity leave:

• Male employees are entitled to paternity leave on their child’s day of birth for a maximum of three (3) times per employment.

Unpaid leave for childcare:

• Female employees may take unpaid leave of up to two years to care for their child, with a maximum of three times (up from two times under the Current Labour Law) during her employment, provided that the employee has been employed with the employer for at least one year. 

Employment contracts: 

• Employment contracts must be in Arabic and prepared in four copies (one copy to be kept with each of the following): the employer, the employee, the Social Insurance Authority, and the competent administrative body.
• If the employee does not speak Arabic, a bilingual or translated employment contract may be prepared in their native language. However, the Arabic version of the contract will prevail in case of a dispute.

Payment of salaries:

• Although it is common for employers to pay employees their salary by way of bank transfers, the Current Labour Law stipulated that the employer’s liability would not be released except when the employee provides their signature confirming receipt of their salary. 
• The New Labour Law now officially allows employers to pay wages through bank transfers without the need for the employee to confirm receipt of the same in writing.

Annual leave:

• Employees are now entitled to receive up to 15 days of annual leave in their first year of service, and 21 days of annual leave for each of the following years.
• Employees employed for more than 10 years or who are above the age of 50 are still entitled to 30 days of annual leave as stipulated under the Current Labour Law.
• People of determination are entitled to 45 days of annual leave.

Emergency leave:

• Employees are now afforded 7 days of emergency leave (up from 6 under the Current Labour Law), with a maximum of 2 consecutive days at a time. Emergency leave is calculated from the employees’ annual leave days.

Gross misconduct

• The New Labour Law maintained most of the reasons defined as gross misconduct  previously stipulated under the Current Labour Law which, if committed by any employee, are considered grounds for summary dismissal. The minor relevant change is that an employee’s absence without justification is no longer considered as gross misconduct, but rather considered as a voluntary resignation by the employee.

Termination of definite v. indefinite term contracts:

Indefinite Term Contracts:

• As is the case under the Current Labour Law, employees are entitled to receive an amount not less than two months’ salary for each year of service in case an indefinite term employment contract is ended without a legitimate reason by the employer. 
• The New Labour Law also standardised the notice period for indefinite term contracts to be 3 months regardless of the duration of employment for the employee. 

Definite Term Contracts:

• Under the New Labour Law, employees are entitled to a gratuity equal to one month's salary for each year of service to be paid if the employer ends a definite term employment contract pre-maturely.

Resignation:

• As a change to the Current Labour Law, employee resignations must now be approved by the competent administrative authority. Also, the New Labour Law entitles employees to withdraw their resignations within 10 days of being notified of the employer’s acceptance (up from 7 days under the Current Labour Law).

Harassment and bullying: 

• One of the new concepts under the New Labour Law, is the introduction of strict regulations on sexual harassment, bullying, and workplace violence. Employers are also obligated to maintain a safe and non-hostile work environment.

New work models:

• The New Labour Law recognises emerging work patterns / models, such as remote work, part-time roles, flexible arrangements, and job sharing.
• This is basically a formal acknowledgment of flexible work models, although they were already recognised under the Current Labour Law as an employment relationship was created as long as the employer exercised control and supervision over the employee and the employee received compensation for the work provided (regardless of the employment arrangement / model).

As the New Labour Law comes into effect, attention now turns to the anticipated decrees and supplementary regulations that will provide much-needed clarity on its practical application.

In the meantime, establishments are encouraged to proactively seek guidance to fully understand their obligations and prepare accordingly. Staying informed and engaged during this transitional period will be key to ensuring compliance and minimising disruption.