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Employment and Protection of Irregular Workers

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The Ministry of Manpower (“MoM”) issued its decree no. 162 for the year 2019 (the “New Decree”), supplementing its previous decree no. 329 for the year 2015 (the “Old Decree”) (collectively referred to as the “Decrees”), both of which regulate the employment and protection of irregular workers in Egypt.

The New Decree merely emphasizes the obligations and regulations already stipulated in the Old Decree, while providing further details and minor amendments to the said decree.

Below are the highlights of such details and amendments:

Categories of work protected under the Decrees

Both Decrees include a list of occupations that are considered to be irregular work and therefore regulated under the said decrees. Examples of irregular workers include (a) seasonal workers; (b) temporary workers; (c) contractors; and (d) farmers. It should be noted that the New Decree further includes both fishermen and port workers in the aforementioned list and therefore extends any protection and rights to any workers employed in the fishery and ports professions.

Obligations under the Decrees

Pursuant to the Decrees, no irregular worker may be employed by employers (whether governmental entities, companies, unions or any other types of employers) unless through an authority for the employment and protection of irregular workers situated in any of the Egyptian directorates (the “Authority”) and no payments may be received from the irregular workers in exchange for aiding in their employment.

Such Decrees further stipulate that any employment contract must stipulate that such workers were hired through the Authority. The New Decree further obliges the employer to notify the said Authority of the employment of irregular workers within ten days from the date of the commencement of work. Additionally, employers are under an obligation to not pay any due amounts unless they obtain documentation evidencing the settlement of all outstanding amounts relating to irregular workers from the competent directorate.

Moreover, the Decrees oblige all irregular workers to register their information with the Authority and to obtain an ID card.

Inspections under the Decrees

Under the Decrees, labor inspectors are under an obligation to inspect all work premises to ascertain that the Decrees are not violated and that irregular workers are protected. Labor inspectors are under a duty to ascertain, amongst other things, the following: (a) that irregular workers are getting paid for their work; and (b) that the regulations concerning women and children under the Egyptian Labor law are adhered to. In addition to the previously mentioned items, the New Decree further stipulates that inspectors are under an obligation to verify the information provided by employers regarding irregular workers through their inspections and investigate all complaints filed with the Authority.

Committees under the Decrees

Pursuant to the Decrees, a central committee for the oversight of the employment of irregular workers under the supervision of the MoM (the “Central Committee”) should be established, with the New Decree providing further details on the establishment of the said committee. The obligations of the said committee include, amongst other things, (a) furnishing of quarterly reports, (b) providing opinions on all matters related to irregular workers such as upcoming legislation or international treaties that Egypt is planning on adopting; and (c) providing opinions on all complaints related to irregular activities.
The New Decree further stipulates that the Central Committee is under an obligation to coordinate with all competent entities that are under an obligation to examine all issues related to irregular workers. It should be noted that such committee was established by virtue of Decree no.327 for the year 2015.

The Decrees stipulate that a secondary committee are to be established in all governorates to ascertain that the recommendations issued by the Central Committee are respected and adhered to. The obligations of the secondary committees include (a) certification of the final budget; and (b) coordination with all competent entities that are under an obligation to examine all issues related to irregular workers. Moreover, the New Decree stipulates that such committees are under an obligation to improve the standard of services provided and to review the use of all administrative expenses to ascertain that such funds are utilized in accordance with the Decrees.

Obligations of the Authority under the Decrees:

The Decrees stipulate that the Authority is under several obligations including (a) furnishing reports on its activities; (b) receiving applications for work from irregular workers; (c) preparing statistics and studies on the volume of irregular workers in Egypt and the relevant job opportunities; (d) reviewing employment contracts with companies that employ irregular workers and determining the value of the wages that should be earned; (e) preparing electronic records and files for irregular workers; and (f) receiving and investigating complaints.

It should be noted that both Decrees stipulate that certain payments need to be made to the manpower directorates, for the protection and employment of irregular workers in Egypt. An example of such payments includes a payment of 3% of the net wages of the workers. The payments made are utilized for the social and healthcare of irregular workers. Examples of such payments are grants given on official holidays, in cases of death or incapacitation, or the establishment of social clubs and organization of pilgrimage trips for the said workers.

Market Reaction:

Many of the Egyptian governorates are implementing the New Decree. For example, grants have been paid to 5821 irregular workers in Aswan for official holidays. Mamdouh Melad, the Head of the Authority in Aswan, explained that the New Decree offers many benefits and aid to irregular workers, other than the aforementioned grants, such as a grant for marriage and grants for the first and second born children of an employee.