 Egypt's labor force has grown steadily in recent years, with upwards of 500,000 new entrants into the labor market each year. As of January 2004, official statistics put the labor force at 20.703 million. According to more detailed data available for 2002/2003, 6.2 million (30 percent) were civil servants and public-sector employees, 5.1 million (24.6 percent) work in the formal private sector, and 6.9 million (33 percent) are in the informal sector. Official statistics estimate unemployment at the beginning of 2004 to be 10.7 percent of the total labor force, while unofficial estimates range between 12 and 20 percent.
The Unified Labor Law (Law 12 of 2003) provides comprehensive guidelines on individual labor relations including organization of work and recruitment and termination of employees in Egypt, in addition to vocational guidance, training, health, and safety. The new law establishes a qualified right of employees to strike, as well as rules and guidelines governing mediation, arbitration, and collective bargaining between employees and employers. Non-discrimination clauses are included, and the law in accordance with labor-related International Labor Organization (ILO) conventions regulates the employment and training of women and eligible children. The new Labor law came into effect on July 7, 2003, and ministerial decrees implementing the law were issued in late 2003. The law creates a national council to discuss wage-related issues and establish a national minimum-wage policy and a national committee that formulates general policies for employment of Egyptians. The National Wage Council met several times in 2004 to discuss the problem of increasing prices and stagnant wages.
According to foreign investors, certain aspects of Egyptian labor law are significant business impediments, particularly the difficulty of dismissing employees. The 2003 law is somewhat more flexible than the previous one, allowing employers and employees to terminate employment contracts under specific circumstances identified by the law and ministerial decrees. There is universal agreement that the government bureaucracy and public sector companies are substantially over-staffed compared to private sector business. Skilled labor in some professions is in short supply. The privatization program in some cases requires a company's new owner to retain all workers. The government has used privatization proceeds to offer early retirement and/or other separation incentive packages to workers in some privatized companies. Foreign companies frequently pay higher wages to attract workers with valuable skills. Millions of Egyptians traditionally have sought employment abroad on both a temporary and permanent basis.
Workers my join trade unions but are not required to do so. A trade union or workers committee may be formed if 50 employees express a desire to organize. Most union members, about 27 percent of the labor force, are employed by state-owned enterprises. All trade unions are required to belong to the Egyptian Trade Union Federation (ETUF). The International Labor Organization's Committee of Experts has emphasized repeatedly that a law requiring all trade unions to belong to a single federation infringes on the freedom of association, but the government has not changed the law.
The new law provides statutory authorization for the rights to strike and to engage in collective bargaining. Workers have the right to strike peacefully, provided the trade union organizes the strike in defense of vocational, economic, and social interests and announces it at least ten days in advance. They must also notify the employer and concerned administrative officials of the reasons and time frame of the strike. The law prohibits strikes in strategic or vital establishments in which the interruption of work could result in disturbing national security or basic services provided to citizens.
Collective negotiation is allowed between trade union organizations and employers or their organizations when attempting to improve labor terms, conditions, and employment provisions; cooperating between labor parties to achieve social development for workers of an establishment; and settling disputes between workers and employers. Agreements reached through negotiations will be recorded in collective agreements regulated by the Labor law.
The Ministry of Manpower and Migration sets worker health and safety standards, which also apply in the export processing zones, but enforcement and inspection are uneven. The law prohibits employers from maintaining hazardous working conditions, and workers have the right to remove themselves from hazardous conditions without risking loss of employment.
In April 2002 Egypt ratified International Labor Organization (ILO) Convention 182 on combating the worst forms of child labor.
The new labor law allows employers to fully or partially close down or downsize their firms for economic reasons. Parliament passed an Emergency Subsidy Fund in June 2002 to compensate employees whose wages are suspended due to partial or complete closure of their firm or due to its downsizing. The law states that financial resources for the fund will come from a one-percent deduction from the base salaries of public, public enterprise, and private-sector employees in firms with over 30 workers. Government contributions and outside donations will also provide support. Press reports indicate the Fund has been used in a number of cases where difficult economic conditions and some privatization deals have resulted in the downsizing of companies labor force.
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