Private Sector Workers in Egypt: Out on Their Own
Al Masry Al Youm –
Hardship forced him to seek employment with a private enterprise. But he was unaware that ineffectual labor laws, poor government oversight, and the difficulty of pursuing legal action would cause him to lose out on many of his rights.
Hani Mohamed Aweys lost part of the fingers on his right-hand while operating machinery at al-Salam Mill, in the industrial area in Kom Oshim in the Faiyum governorate. But he opted not to follow through with the customary legal procedures for such incidents, fearing retribution from his employer.
Even the police report, filed under No. 349 in 2004 at the Tamia central hospital, was only a formality that government hospitals have to go through when admitting injuries. In his statement, Aweys only specified that he was injured at work, but declined to take any further legal action. He justified this by saying, “I was afraid they would cut off my livelihood.”
A month after the injury, Aweys returned to work, this time as a guard at the mill’s entrance, without a contract to safeguard his rights and formally identify his duties. Over the ensuing year, he continued medical treatment which cost him up to 6.000 Egyptian pounds (about $865), most of which he borrowed from relatives.
When his employer did not fulfil his promise and refused to grant him an employment contract and insurance cover, he filed an overdue complaint with the National Organisation for Social Insurance (NOSI), almost two years after the accident. His complaint was deemed valid and he was subsequently assigned an insurance policy (No. 36713593) in the name of al-Salam milling company, which then sacked Aweys.
Aweys’ case is not the only one of its kind. Nearly 47.000 workers have been arbitrarily fired by their employers without the approval of the Labor Court, according to Jabali Mohamed Maraghi, head of the Federation of Egyptian Trade Unions. This figure includes 12.000 workers who were fired after the revolution.
Maraghi said that the federation’s role is limited to negotiating with privately-owned enterprises and forming committees to amicably resolve disputes. However, he said, those resolutions are not binding and cannot compel employers to reinstate sacked workers.
In the end, he said, it is the labor law that is failing to protect workers’ rights in Egypt, and the federation is helpless to do anything about it.
During the past six months, inspectors from the Labor Office recorded 70.449 violations related to uninsured employees, out of a total of 18 million workers employed in the private sector, according to figures from the Egyptian Ministry of Manpower.
Kom Oshim’s Labor Office has recorded labor-related violations by al-Salam Mill, such as a failure to grant workers contracts, register them with social security, and maintain employee records, involving 9 out of 90 employees at the mill.
The violations were reported to the general prosecutor’s office in Tamia, and a court ordered the management of the mill to pay a fine of 1.100 Egyptian pounds (around $175) to the authorities in cases No. 6636 and 6637 of 2009. However, it appears that the court order was never enforced, according to Labor Office records.
Aweys’ lawsuit was brought before the Faiyum Court of First Instance where it was filed under No. 27 of 2006 and included a report by a Ministry of Justice expert. The expert stated that Aweys had worked for the mill since 2004 at a monthly salary of 98 Egyptian pounds (around $14), according to the figure disclosed to social security and to the committee that deals with individual labor disputes, which stated that the complainant had been unfairly dismissed.
There are many people like Aweys, who fear to even disclose their names. They all cite the same reason: fear for their livelihoods.
One employee managed to be amicably reinstated in his position at a privately owned company, after the Labor Court rejected his case.
The man, who declined to be named to avoid problems with the company’s management, said that he worked for 11 years at his job, from July 1, 2000 until March 23, 2011. Then he was laid off “arbitrarily,” in the sense that his employer did not complete the legal procedures in their dismissal, including hearing his response to allegations of negligence brought against him.
The company did not refer him to the Labor Court either, as stipulated by Article 71 of the Labor Law, as the sole entity with the authority to approve a dismissal if it deems an employer’s request valid.
In its ruling, the court explained its dismissal of the employee’s case, stating that “it is widely accepted that the law does not contain a provision that would rescind the severance of an employee and reinstate said employee. Consequently, the decision to end the employee’s service effectively terminates the contract and ends the obligation to pay the employee’s remuneration, even if [the severance is] arbitrary in nature.”
But for his part, Aweys did not give up. His case, number 494/2008, was referred to a specialised labor court. On September 27, 2009, the court ordered the employer to pay Aweys 1.000 Egyptian pounds (around $144), basing its ruling on Article 122 of the Labor Law, which stipulates that “severance pay shall not be less than two months’ salaries for each year of service.”
Nevertheless, the court rejected his request for compensation for his accident, arguing that he did not properly “attribute his injury to his workplace in police report No. 349 of 2004,” resulting in a “lack of evidence over the civil liability of the defendant.”
For his part, Azouz Ahmed Awad, CEO of al-Salam Mill, denied responsibility for the worker’s injury. He said that the law had the final say in their dispute, and recalled that the court had ordered his company to pay Aweys compensation. Awad also denied knowledge of the nine violations made by his company, even when the author of this investigation supplied him with the pertinent figures.
Awad claimed that Aweys was not issued a contract and an insurance policy because he was an irregular day labourer at the mill. But according to an official source at the directorate for irregular labor within the Ministry of Manpower, al-Salam Mill did not contract the directorate or notify it about Aweys’ employment.
Mahmoud Abdul-Aziz, head of the directorate, stressed that the Ministry of Manpower issued a decrees in 2007 restricting the employment of irregular labor to the seasonal construction and agricultural sectors, as well as mines and quarries.
However, the CEO of the mill claims that Aweys’ accident occurred at night, outside his official shift, and that he had not been asked to operate the machine that caused the injury, adding that he covered the expenses of his treatment “out of charity,” and not because it was his duty as an employee.
While he refused to mention the amount of money given to Aweys, “so that his good deed was not wasted,” the employer purported to have provided Aweys with another job, but that the latter did not perform it in the manner required of him.
Judge Mohammed Abdul-Aziz al-Banna, President of the Court of Appeal in Tanta, reckoned that “the Labor Law contains flaws, because legislators did not give courts the right to reinstate workers if they are dismissed arbitrarily.”
“This had led some employers to dismiss workers in cases that are not otherwise sanctioned by law,” he added.
Banna said that this was the decision reached by the Court of Cassation in its rulings. He also pointed to the inherent injustice toward workers who are sacked unlawfully, as employers often exploit certain loopholes to preempt court rulings.
For instance, Banna said, some workers lose their court cases after being sacked “because they were given low grades in annual performance reviews.” As a result, he went on to say, “The court cannot rule in their favour, and instead orders compensation to be paid to them, which is often meager.”
Hamdi Mohamed Abdul-Moneim has lived with an amputated arm since 2005, when his hand was caught in a machine for mixing biscuit dough that he was operating at a private firm in the 6th of October industrial zone.
Though his employer covered the cost of his treatment and insured him after his injury, he has not yet received his financial dues, despite completing his case files some eight years ago. Abdul-Moneim is frustrated because the verdict as well as the hearings have been postponed repeatedly since 2005, in violation of the Labor Law.
Judge Dr. Mohamed Osman, head of the Economic Court of the Court of Cairo, and former president of the Labor Court, refused to comment on the case, in compliance with local regulations. But he attributed what he called “protracted litigation in labor disputes” to the slow procedures in referring cases to the specialised expert office.
Osman said, “[Labor] cases are treated like any other, and are not examined until their turn comes, which might take more than two years because of the large number of cases piling up before the small number of experts.”
Osman called for establishing specialised chambers in the Supreme Court of Appeal to look into labor disputes in order to avoid delays. He believes that the provision in the law, which grants 40 days for appeals to be filed against the rulings of the Court of First Instance, also slows down the process.
Osman also reckons that Article 70 of the law may be unconstitutional. The article imposes a statute of limitations on the rights of workers to resort to labor courts, in case they do not report their disputes with their employers to a joint arbitration committee within 10 days.
Mohamed Madkour, a lawyer, corroborated the reports about the simplicity of fines stipulated by the Labor Law, which range between 50 and 100 Egyptian pounds ($8-16) for violations of Article 32, that is, when employers fail to issue employment contracts in three official copies, of which one is deposited with social security – subsequently leading the workers to forfeit their right to compensation.
Poor oversight is another factor that undermines workers’ rights, in addition to the flaws in legislation and the difficulties of labor-related litigation.
Alaa Awad, spokesperson for the Ministry go Manpower, acknowledged that there is a “lack of inspectors at the Labor Office, who number 4.000 and whose role is to monitor and report violations related to private enterprises.” According to Awad, private enterprises number 2 million and 346 thousand, including 12 thousand industrial firms. In other words, each inspector is responsible for 538 private firms and 4.200 workers.
As a result of this skewed proportion, only 65 percent of the ministry’s annual inspection plan is implemented, according to Awad. The ministry’s spokesperson also indicated that there is a small number of occupational health and safety inspectors at the Labor Office, which means that only 25 percent of the ministry’s annual plan for monitoring industrial safety in private industrial enterprises is being implemented.
Awad stressed that the labor relations division at the ministry, which is tasked with pursuing amicable settlements prior to litigation, succeeded in settling 85 percent of 8.321 individual and collective complaints received in the second half of 2012.
Ahmed Hassan, director of the Labor Office at the industrial zone in Kom Oshim – home to 120 private enterprises that employ 8.500 workers but only one labor inspector – said that the office’s role includes “receiving complaints from workers and summoning employers, representatives of trade unions to which the workers belong, and representatives of the employers at the Chamber of Commerce,” as part of a so-called tripartite committee.
Complaints are then discussed amicably. In case they remain unresolved, the Labor Office submits a report highlighting the workers’ rights to the Labor Court.
Hassan said that the office recorded violations at 30 private enterprises in the past three months, including failure to issue contracts to 175 employees, and 300 other violations involving failure to insure workers.
The solitary inspector at the office, Abdullah Mansour, issued violation notices against 86 out of 120 private enterprises in 2009. Cases were brought by the Labor Office against the managers of these enterprises for labor offenses involving 2.684 workers.
Violations varied from arbitrary detention, to failure to issue contracts or insure workers. However, the criminal court in Tamia ultimately ordered very small fines in the cases related to unfair dismissal.
Mahmoud Farhat Mahmoud Ali, a worker, was sacked from al-Watania feed and soap factory in 2010, when he dared file a lawsuit to obtain compensation after two fingers on his right hand were severed at his workplace.
Farhat said: “I filed a lawsuit after the management refused to issue an employment contract and compensate me for my injury. I have been waiting for the verdict of the court looking into my case since September 2010.” Farhat worked for five years without a contract or insurance, but he did not want to lose his job.
The company’s director, Maher Shaaban, claimed that no contract was issued to Farhat because he was an irregular worker, and said his injury at work was the result of his “negligence.” He went on to say that he had offered Farhat an alternative job that was suited to his condition, but Farhat refused and heeded the advice of some people who told him that the court would award him a significant compensation.
The company where Farhat worked had also not been in contact with the irregular labor directorate throughout Farhat’s employment period, nor had it notified the directorate of Farhat’s name, according to an official there.
Meanwhile, the brothers Ahmed and Mahmoud Abdul-Moneum Amira are both former employees at a factory producing potato chips in the 6th of October industrial zone. Although they were insured, they were sacked two years into their contract because they asked for a salary raise along with other colleagues at the factory.
Today, eighteen million workers in the private sector may face the same fate as Aweys, whose difficult conditions stopped him from demanding his rights, because he was concerned that he might lose his livelihood. Little did he know that he would end up on the street because of a law that is biased in favour of business owners.
This investigation was conducted with the support of ARIJ – Arab Reporters for Investigative Journalism