Executive Summary

The new labor law went through a lengthy drafting phase that began in 2014 and culminated in its passage in 2025, reflecting what appears to have been a period marked by caution. On the one hand, there was an effort to move forward through careful steps involving limited amendments aimed at calming the various parties awaiting legal reform in line with their expectations, while also aligning with International Labor Organization (ILO) standards and relevant domestic legislation. On the other hand, the authorities also sought to adopt measures intended to “control” society.

The provisions of the new law reflect the complex context in which the articles relating to new forms of work, social dialogue, women’s employment, wage systems, employment contracts, and strikes were drafted, in addition to the imposition of mandatory drug testing. This took place in light of the three considerations mentioned above, which may at times be contradictory.

Introduction

In mid-April, the Egyptian House of Representatives passed the new labor law after a full 10 years of work on drafting it, during which it went through multiple versions and successive periods in which debate over it was frozen.

The bill’s long trajectory began in 2014, and its drafting took around three years before it was issued by the government in 2017. It was then referred to the House of Representatives, where it was examined by the Manpower Committee and forwarded to the plenary session for a vote in the same year, before discussion of the bill was suspended at the plenary level.

This “winding” path was also linked to the 2018 amendments to the Egyptian Constitution, which established the Second Chamber of the Egyptian Parliament, the Senate.¹The Senate is the second chamber of the Egyptian parliament. It was reestablished under constitutional amendments in 2019 and began operating in 2020. It plays an advisory role in reviewing draft laws, public policies, and development plans before they are referred to the House of Representatives, but it does not have binding legislative powers. Accordingly, the bill was referred to the Senate in the subsequent parliamentary session, approved by it, and then referred back to the House of Representatives,²Beesan Kassab, “New labor law, same pro-business bias”, Mada Masr, 23 November 2024, available at https://www.madamasr.com/en/2024/11/29/feature/politics/new-labor-law-same-pro-business-bias/ (Kassab, "New labor law" ) before its discussion was halted for a second time, based on instructions from the President of the Republic. The government announced the withdrawal of the bill in January 2023 in order to work on new amendments. Thus began a third “cycle” in this winding process of drafting the bill.

This law primarily applies to private sector workers, at a time when the role of this sector in employment is expanding. In this context, the Prime Minister reviewed a report documenting 500 reforms aimed at strengthening the role of the private sector in Egypt during the period 2022–2024, in 2025. ³Kassab, "New labor law" ,⁴The private sector’s average contribution to job creation rose to 81.3% in 2023, compared to an average of 76.3% during the previous decade (2013–2022).

Its particular importance at this time stems from the political system’s adoption of a declared policy aimed at “empowering the private sector,” according to the government’s repeated formulation.⁵inistry of Planning and International Cooperation, “During the conference ‘Development Finance for Private Sector Empowerment… Economic Growth and Employment,’ the Regional Director of the European Bank for Reconstruction and Development reviews the partnership with the government to expand renewable energy projects and efforts to empower the private sector”, 16 June 2025, available at https://moic.gov.eg/news/2302 This policy is clearly reflected in the authorities’ discourse, which extensively highlights the measures taken to support the private sector, in a manner that aligns with Egypt’s commitments to the International Monetary Fund (IMF) under the current agreement.

The International Monetary Fund (IMF) considers that the private sector should play a leading role in driving Egypt’s economic growth. ⁶International Monetary Fund, “IMF Executive Board Completes Fourth Review Under Agreement with Egypt Under Extended Fund Facility, Approves Request for Agreement Under Resilience and Sustainability Facility, and Concludes 2025 Article IV Consultations”, 12 March 2025, available at https://www.imf.org/en/news/articles/2025/03/11/pr-2558-egypt-imf-completes-4th-rev-eff-arrangement-under-rsf-concl-2025-art-iv-consult This means that it is not sufficient for the Egyptian economy to achieve reasonable rates of growth in gross domestic product (GDP); rather, this growth must be driven by the private sector. This has required the government to exercise great caution in publicly showcasing its efforts in this regard, especially in light of the difficulties encountered by the agreement whenever there are indications of the state’s reluctance to implement its commitment to what the Fund describes as “Reducing the State’s Footprint in the Economy.”⁷International Monetary Fund, Press Briefing Transcript: Julie Kozack, Director, Communications Department, 24 July 2025, available at https://www.imf.org/en/News/Articles/2025/07/24/tr-07242025-press-briefing-transcript-julie-kozack-director-communications-dept-july-24-2025

This article seeks to understand and deconstruct the changes introduced by the new labor law compared to the previous situation under the repealed labor law, by analyzing its stipulations through a number of “lenses” that represent recurring patterns in public policy: Compliance with standards and legitimacy; a tendency toward gradualism and slow steps; and avoiding the polarization of stakeholders, which may even result in amendments that have no practical effect or that obscure any real change; in addition to the pursuit of “controlling” and dominating society.

The conflict among these multiple drivers of public policy – each of which was present, in its own way, in both the agenda-setting process and the drafting of the new labor law – helps explain why the law took 10 years to be adopted and redrafted.

Through the lens of compliance with standards and legitimacy, the provisions on “new forms of work” and “social dialogue” can be readily understood, as can the provisions that were amended in the law – by comparison with the previous law – for the purpose of aligning with the requirements of the Egyptian Trade Unions Act, Law No. 213 of 2017. All of this fundamentally comes in line with the policies of the International Labor Organization (ILO).

While the lens of gradualism, slow steps, and avoiding the polarization of stakeholders appears valid for understanding the texts related to women’s employment – despite the reforms included in the new text – this is in light of their likely weak impact on the extremely low levels of women’s employment. The same applies to the provisions related to wage policies and job security.

Wage policies in the new law represent a case of inertia, perhaps even reaching the point of “non-policy,” despite the necessity of addressing the erosion of real wages that has accompanied the currency liberalization policy, which has led to runaway inflation.⁸World Bank, “Inflation, Consumer Prices (Annual %) – Egypt, Arab Rep.”, n.d., available at https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?end=2024&locations=EG&start=2003

The same applies to job security with regard to employment contracts, some of whose details have indeed been amended, but without the amendments affecting their core substance, which continues to allow for the termination of open-ended employment contracts.

On the other hand, this “control” lens can be used to understand the provisions on “strikes,” as the new law has entrenched the same approach as the previous law by imposing severe restrictions that amount in practice to a ban, ⁹The new law retains the highly restrictive provisions on the exercise of the right to strike contained in the repealed law but adds a vague provision prohibiting its exercise in so-called exceptional circumstances, without defining what these are. in addition to provisions mandating compulsory drug testing for workers.