Pursuant to the amendments introduced by Law No. 141 of 2019 to the Egyptian Investment Law No. 72 of 2017, companies in Egypt with foreign direct or indirect investment contributions, irrespective of percentage, must comply with specific reporting obligations as regulated by Prime Ministerial Decree No. 2731 of 2019.
General Overview:
On May 3, 2025, the new Egyptian Labor Law (“The new Law”) No. 14 of 2025 has been issued, officially replacing the long-standing Labor Law No. 12 of 2003. After more than two decades without major changes, this new law comes at a crucial time, aiming to modernize how work relationships are regulated in Egypt. It introduces a number of important amendments that reflect today’s labor market realities and respond to both employer needs and employee rights. Instead of changing everything from the ground up, the new law focuses on amending provisions and sections on specific areas that caused confusion or disputes in the past. These amendments mark a step toward building a more balanced, transparent, and fair legal framework for work in Egypt.
The new Law selectively amends critical provisions, many of which have been flashpoints in courtrooms and boardrooms alike. These changes, while technical in nature, have deep implications for job security, employer authority, and the evolving balance between flexibility and fairness in the Egyptian workplace.
Definite Employment Contracts:
The most controversial amendment is the explicit rejection of the long-standing judicial assumption that renewing a definite contract multiple times, deems it automatically converted into an indefinite contract. For years, Egyptian courts have protected employees by interpreting repetitive renewals as evidence of an ongoing employment relationship, regardless of the contract’s formal label.
The new Law asserts that a definite contract remains as such, no matter how many times it is renewed, unless the parties agree otherwise. From an employer’s perspective, this provides welcomed predictability and workforce flexibility, especially in project-based or seasonal industries. But from the employee’s perspective, it risks normalizing perpetual precariousness. Without the conversion safeguard, some employees may spend years in the same role without ever attaining the protections that come with permanent status.
On a related front this gives employers more control over employment terms and allows them to meet fluctuating demands without fearing legal reclassification. However, this amendment may weaken job security and is likely to provoke debate over potential employees’ exploitation in certain sectors.
Maternity Leave and Women’s Night Work:
The new Egyptian Labor Law extends maternity leave from three to four months, available up to three times during a woman’s employment, represents a socially progressive move that aligns with global standards on work-life balance and gender equity. This amendment better reflects the dual roles many women fulfill as both employees and caregivers.
In addition, the absolute ban on night shifts and overtime for women has been lifted. Instead, women may now work outside standard hours, provided their health and safety are not at risk. This marks a departure from paternalistic protectionism and instead promotes inclusive participation by women in sectors such as healthcare, hospitality, and retail, where nontraditional hours are commonplace.
Annual Leave Entitlements:
Another notable reform is the adjustment to annual leave entitlements. Employees now earn their 21 days of paid leave after six months of service, rather than waiting a full year. This is especially relevant in sectors with high turnover or shorter contract cycles, where employees often left before becoming eligible for any leave at all.
Working Hours, Overtime, and Holidays
The new Law also addresses long-standing ambiguities in wage calculations by providing clearer and more prescriptive guidelines on overtime and holiday pay. Although these entitlements existed under the previous law, they were often vaguely defined and unevenly enforced. The updated wording ensures that employers compensate additional work hours appropriately, minimizing legal disputes over underpayment or misinterpretation. This clarity supports better compliance, particularly for HR and payroll departments.
Employment of Youth
The new Law strengthens protections for young workers. Stricter limitations are now in place regarding permissible working hours, rest periods, and the types of tasks assigned to workers under the age of 18. This amendment reaffirms Egypt’s obligations under international child employment conventions. Nevertheless, successful implementation will depend on more robust enforcement mechanisms, especially in informal or rural economies where regulation remains challenging.
Probationary Period
The new Law addresses a loophole in the probation system that some employers previously exploited by re-hiring the same employee under a new contract, resetting the probation clock each time. The new Law now prohibits multiple probation periods with the same employer, limiting the probation term to a maximum of three months once per employee. This provision safeguards against abuse while preserving the legitimate purpose of probation as a trial period for assessing employee suitability.
Resignation Procedures
The resignation process is now more clearly defined to reduce disputes. Employees must submit their resignation in writing, and if the employer fails to respond within ten days, the resignation is considered accepted. This removes the ambiguity that often surrounded whether a resignation was properly communicated or acknowledged, streamlining exit procedures for both parties and reducing the potential for legal uncertainty.
Dismissal and Procedural Fairness:
While the fundamental protections against wrongful dismissal remain intact, the new Law places greater emphasis on documentation and justification. Employers are now required to maintain clear records and provide valid reasons for termination. This helps mitigate arbitrary dismissals and reinforce judicial oversight. By prioritizing procedural fairness, the new law encourages more formalized and defensible dismissal practices, benefiting both employer risk management and employee rights.
Collective Bargaining and Labor Representation
The new Law also reaffirms the legitimacy of organized labor. Employers are now legally obliged to engage with unions and respect collective agreements at the sector level. Although the broader framework for union law remains unchanged, this provision strengthens the role of collective bargaining and institutionalizes dialogue between employers and labor representatives.
Final Thoughts:
Finally, new Law introduces a series of practical and legally significant reforms without dismantling the foundations of the ELL. The new framework seeks to balance flexibility for employers with improved protections for employees and addresses long-standing legal uncertainties with clearer statutory guidance. Ultimately, the new Law’s success will depend not just on what is written, but on how it is applied by courts, by employers, and by the workforce itself.
While the new Law is a step in the right direction, it is necessary for the Egyptian legal framework yet to keep evolving and adapting to the continuously changing employment relationships and conditions, such as, the hybrid and work from home format.
In sum, this bill is a meaningful step toward a more modern labor framework in Egypt. Whether it becomes a milestone in labor justice, or a missed opportunity, will depend on the institutions tasked with bringing its provisions to life.
Additional Resources
- Egyptian Ministry of Manpower and Immigration – The official government ministry responsible for labor affairs
