A new era for labor relations in Egypt: Insights into the 2025 Labor Law

On May 3, 2025, the New Egyptian Labor Law No. 14 for the year 2025 was published in the Egyptian Official Gazette (the “New Labor Law”), replacing the long-standing Labor Law No. 12 of 2003 (the “Previous Labor Law”).  

The New Labor Law will enter into force at the beginning of the month following the lapse of ninety days from its date of issuance, with the specialised labor courts commencing operations as of 1 October 2025. 

In alignment with Egypt’s Vision 2030 for inclusive economic development and a fair labor environment, the New Labor Law represents a significant shift from the Previous Labor Law and a major advancement in aligning the interests of both employers and employees. It effectively strikes a balanced approach to labor relations, addressing key concerns on both sides. Overall, the introduction of this legislation marks the achievement of several important objectives aimed at fostering a more equitable and modern labor framework. 

1. A Closer Look at New Labor Law: Key Changes 

(i) Employment Contracts 
Despite the several circulated drafts of the legislation proposing limits on the number of renewals for fixed-term contracts, the final version of the New Labor Law confirms that such contracts will continue to be treated as fixed-term, provided they are duly renewed before their expiration. 
(ii) Notice Period 
Notice period applicable to the termination of indefinite-term employment contracts has been unified to three months, irrespective of the employee’s length of service. 

2. Harassment and Bullying

Employers are strictly prohibited from engaging in or permitting any form of forced labor. In addition, the New Labor Law mandates that all forms of harassment and bullying are unacceptable. Accordingly, employers are required to ensure a safe and respectful work environment that is free from harassment, bullying, and violence and implement appropriate preventive measures and policies to safeguard employees against such misconduct.

3. Resignation

Under the New Labor Law, the employee’s resignation may be submitted either by the employee personally or through a representative and must be authenticated byte competent administrative authority. This represents a departure from the Previous Labor Law, which allowed resignations to be submitted directly without official authentication.

Furthermore, the New Labor Law extends the period during which an employee may revoke a submitted resignation. Employees now have ten days from the date they are notified of the employer’s acceptance to withdraw their resignation, an increase from the seven days permitted under the previous framework. Notably, the revocation must also be authenticated by the competent administrative authority. 

Another notable development under the New Labor Law is the reclassification of unjustified absences. Unlike the Previous Labor Law, which treated excessive absenteeism as a disciplinary offense, the New Labor Law introduces the concept of presumed resignation. Specifically, if an employee is absent for more than twenty non-consecutive days within a calendar year, or for more than ten consecutive days, such absence is now legally considered a presumed resignation, rather than a disciplinary violation. 

4. Wages and Payment Method

The New Labor Law introduces a significant development in wage payment practices, allowing employers to pay employee wages through bank transfers as an alternative to the traditional method of payment at the workplace.

5. Occupational Training Fund

The New Labor Law introduces a long-awaited amendment to the employer contributions to the Occupational Training Fund. Under the New Labor Law, establishments employing thirty employees or more are now required to contribute 0.25% of the minimum social insurance wage per employee on an annual basis. This contribution is subject to a minimum of EGP 10 and a maximum of EGP 30 for each employee per year. Additionally, the law grants the competent minister the authority to issue a decree specifying the conditions under which employers may be exempted from this contribution, provided they offer training programs to their employees.

Importantly, all ongoing court disputes concerning the previous contribution regime (i.e., 1% of net profits) will be dismissed, unless the employer elects to proceed with the litigation. 

6. Modern Working Patterns

In recognition of the increasing adoption of diverse and non-traditional work models, the New Labor Law establishes a regulatory framework to govern modern employment relationships. It introduces the concept of a “new work pattern,” defined as any non-conventional form of employment carried out by an employee under the direction or supervision of an employer, in return for remuneration of any kind. The law expressly includes the following arrangements within this category (i) remote work conducted through digital platforms, (ii) part-time employment, (iii) flexible working arrangements, (iv) job or work sharing; and (v) any additional work patterns that may be designated by ministerial decree issued by the Minister of Labor.

7. Copies of the Employment Contracts

Employers and employees are now required to sign four original copies of the employment contract, an increase from the three originals mandated under the Previous Labor Law. One for each party, one to be submitted to the Social Insurance Authority and one to be submitted to the competent Labor office.

8. Employee’s File

The New Labor Law requires employers to retain employees’ records, whether in physical or electronic form, for a minimum period of five years post the termination of the employment contract.

9. Medical Tests for Employees

One of the most significant additions in the New Labor Law is the provision permitting employers to request medical examinations for employees to detect drug use or infectious diseases. These tests must be conducted in a confidential manner, and employers are strictly prohibited from disclosing any medical information related to the employee

10. Working Hours and Overtime

The New Labor Law largely maintains the same framework for working hours and overtime as set out in the Previous Labor Law. However, a key change relates to the regulation of overtime: employers are now only required to notify the competent administrative authority when employees are asked to work overtime. Unlike under the Previous Labor Law, employers are no longer required to obtain prior written approval before implementing overtime work.

11. Competent Labor Courts

Under the New Labor Law, effective as of 1 October 2025, specialised labor courts will be established to hear labor-related disputes. Notably, in cases concerning employee dismissal, the law mandates that the court must issue a decision on an expedited basis, within a maximum period of three months from the date of the first hearing.

12. Regulations on Ending the Employment Relationship 

• Fixed term employment contract
  The New Labor Law provides that, in the event of termination of a definite-term employment agreement that has been renewed for a period exceeding five years, the employee shall be entitled to end-of-service grant equivalent to one month’s salary for each year of service.

• Indefinite term employment contract
  Unchanged from the Previous Labor Law, if an employer terminates an unlimited-term employment contract without a valid reason, the employee is entitled to compensation of no less than two months’ salary for each year of service.

14. Statutory Leaves 

• Maternity Leave
  Maternity leave entitlements have been enhanced under the New Labor Law, increasing from 90 to 120 days. Employees are now entitled to maternity leave up to three times throughout the duration of their employment, compared to the previous limit of two times under the Previous Labor Law. Additionally, the eligibility threshold has been removed, allowing employees to claim maternity leave from the first day of employment, whereas previously they were required to have completed at least ten months of service.

• Childcare Leave
  Pursuant to the Previous Labor Law, female employees are entitled to unpaid childcare leave for up to two years. The New Labor Law expands this entitlement, allowing female employees to take unpaid childcare leave up to three times during the course of their employment, provided that each period of leave is separated by a minimum of two years and that the employee has completed at least one year of service with the employer.

• Casual Leave
  Under the Previous Labor Law, employees were entitled to six days of casual leave per year for emergency situations. The New Labor Law increases this entitlement to seven days annually, providing employees with greater flexibility to address unforeseen personal circumstances.

• Annual Leave
  Under the New Labor Law, employees are entitled to fifteen days during 1st year of service, then twenty-one per annum, and forty-five days for disabled employees and dwarfs.

• Paternity Leave
  Male employees are now entitled to paternity leave on the day of their child’s birth, for up to three times throughout the duration of their employment. This leave is granted separately from the employee’s annual leave balance and does not count against it.

• Study Leave
  Employees have the right to schedule their annual leave to coincide with examinations at any stage of their education, provided they notify the employer at least fifteen days in advance. Additionally, the actual days of the exams will not be deducted from the employee’s annual leave balance (as compared to the Previous Labor Law), subject to the following conditions: (i) The employee must notify the employer of at least ten (10) days before the exam date; and (ii) The employee must provide proof of attendance for the exams.

The New Labor Law marks a significant milestone in the modernisation of labor relations, establishing a more balanced and equitable framework for the employment relationship. In addition, other key changes introduced and are expected to substantially impact the way businesses operate in practice. 

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