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Minimum Wage Fixing Convention, 1970 (No. 131) - Egypt (RATIFICATION: 1976)

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In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on wages, the Committee considers it appropriate to examine Conventions Nos. 131 (minimum wage) and 95 (protection of wages) in a single comment.

Minimum Wage

Articles 3 and 4 of Convention No. 131. Operation of the minimum wage system. Further to its previous comment, the Committee takes note of the Government’s indication that: (i) the Council of Ministers adopted the Cabinet Decision No. 2659 of 2020 on the re-composition of the National Council for Wages; (ii) the council set the minimum wage for the private sector in 2022; and (iii) the minimum wage level is adjusted annually taking into account cost of living, price development, geographical and sectorial aspects, levels of productivity, etc. The Committee requests the Government to provide updated information on the activities of the National Council for Wages and, in particular, on the periodic increments of the minimum wage level, in consultations with representative organizations of employers and workers concerned.

Article 5. Enforcement. The Committee notes that the Labour Code does not provide for sanctions for non-payment of the minimum wage. It recalls that measures to ensure the effective application of provisions relating to minimum wages should include adequate penalties (General Survey of 2014, paragraph 305). The Committee therefore requests the Government to provide information on the sanctions imposed in cases of infringements upon the minimum wage and to indicate the relevant legislative provisions.

Protection of wages

Articles 4 and 6 of Convention No. 95. Partial payment of wages in kind. Freedom of workers to dispose of their wages. The Committee notes that in response to its previous comment requesting information on the measures adopted in practice to ensure that allowances in kind are appropriate and that workers may freely dispose of their wage, the Government refers in its report to sections 42, 44 and 45 of the Labour Code. The Committee notes that these sections of the Labour Code do not determine the circumstances under which payments in kind may be made nor do they prohibit employers from exercising any kind of constraint on the use made by workers of their wages. Therefore, the Committee once again requests the Government to consider the introduction of provisions giving effect to Articles 4 and 6 in its legislation and to provide information on the findings of the labour inspectorate and any labour disputes concerning issues related to the payment of wages in kind and workers’ freedom to dispose of their wages.

Article 15(c). Enforcement. The Committee notes that section 247 of the Labour Code provides for a fine if the employer violates provisions on protection of wages of not less than a hundred Egyptian pounds (EGP) and not exceeding five hundred EGP. With reference to its General Survey of 2003 (paragraph 479), the Committee encourages the Government to evaluate whether these sanctions are proportionate to the offences and sufficiently dissuasive to deter violations.

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In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on wages, the Committee considers it appropriate to examine the Convention No. 131 (minimum wage) and Convention No. 95 (protection of wages) together. The Committee takes note of the draft Labour Code transmitted by the Government. The Committee hopes that the Government will take into account the following comments in the finalization of the new legislation.

Minimum wage

Articles 3 and 4 of Convention No. 131. Operation of the minimum wage system. Further to its previous comments, the Committee notes the information provided by the Government in its report on the operation of the National Council for Wages and the re-establishment of its subsidiary bodies. The Committee requests the Government to provide information on the composition and operation of the National Council for Wages and on the results of its work, including any adjustment of the minimum wage and the criteria taken into account in this regard.

Draft Labour Code. The Committee notes that the draft Labour Code provides that, in all cases, the wage received by workers shall not be less than the minimum wage (section 81). It also notes that no specific sanction is established in the draft in case of non-respect of section 81. Recalling that Article 2 provides that failure to apply the minimum wage shall make the person or persons concerned liable to appropriate penal or other sanctions, the Committee requests the Government to consider the introduction of sanctions in case of violation of the minimum wage in the new legislation.

Protection of wages

Articles 4 and 6 of Convention No. 95. Partial payment of wages in kind. Freedom of workers to dispose of their wages. Further to its previous comments on the need to take measures to ensure that allowances in kind are appropriate for workers’ personal use and benefit and that they are fairly and reasonably valued, and that workers may freely dispose of their wages, the Committee notes that the Government refers to the action of the labour inspectorate as well as the possibility available to workers to lodge complaints before the competent bodies of the Ministry of Labour and to resort to avenues for conciliation, mediation and arbitration for the majority of labour conflicts. The Committee requests the Government to provide information on any findings of the labour inspectorate and any labour disputes concerning issues related to the payment of wages in kind and workers’ freedom to dispose of their wages. It also requests the Government to consider the introduction of provisions giving effect to Articles 4 and 6 in the new legislation.

Draft Labour Code. The Committee notes that section 81 of the draft Labour Code contains provisions implementing various obligations under Convention No. 95 (including Articles 3, 12 and 13 on the payment of wages). Recalling that Article 15(c) provides that the laws or regulations giving effect to the provisions of the Convention shall prescribe adequate penalties or other appropriate remedies for any violation thereof, the Committee requests the Government to consider the introduction of sanctions in case of violation of any of the provisions of section 81.

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Articles 3 and 4 of the Convention. Minimum wage fixing machinery and criteria for determining minimum wage levels. Further to its previous comment, the Committee notes the Government’s indication that a tripartite Conference on social dialogue as well as a tripartite Conference of the National Council for Wages are currently being prepared with a view to fixing the national minimum wage. The Committee requests the Government to provide detailed information on the discussions and practical outcome of these Conferences.

The Committee recalls that a national monthly minimum wage was set at 35 Egyptian pounds (EGP) (approximately US$6) in 1984 and remained unchanged at that level until 2010. The minimum wage was not revised for over 25 years, eventually becoming a subject of increasing social tension, despite the creation in 2003 of the tripartite National Wages Council which was mandated to establish a minimum wage floor and revise it every three years. It was only in 2010 that based on a court decision, the National Wages Council was obliged to fix a minimum wage at EGP400 (approximately US$71).

The Committee understands that in June 2011 the Government announced the increase of the monthly minimum wage from EPG400 to EPG700 (approximately US$117) for private sector employees, effective from January 2012, and also indicated its intention to further increase the minimum wage to EPG1,200 (approximately US$200) within the next five years. The Committee also understands that the Government envisages reforming the National Wages Council in terms of modified composition, greater focus on minimum wages and enhanced social dialogue. The Committee further understands that the Government has solicited and received technical assistance from the Office on issues of minimum wage policy. The Committee would be grateful if the Government would keep the Office informed of further developments concerning the readjustment of the national minimum wage and the reform of the National Wages Council. It would also appreciate receiving a copy of the legal text establishing the current minimum wage.

While welcoming the Government’s efforts to shape a coherent minimum wage policy which would be socially fair but also economically sound, the Committee wishes to refer to the Global Jobs Pact, adopted by the International Labour Conference in June 2009, in response to the global economic crisis, which places particular emphasis on the need to strengthen respect for international labour standards and expressly identifies wages-related ILO instruments as being relevant in order to prevent a downward spiral in labour conditions and build recovery (paragraph 14). The Global Jobs Pact further suggests that governments should consider options such as minimum wages that can reduce poverty and inequity, increase demand and contribute to economic stability (paragraph 23) and points out that, in order to avoid deflationary wage spirals, minimum wages should be regularly reviewed and adapted (paragraph 12). The Committee is therefore bound to recall that determining minimum wage levels within an institutionalized framework of tripartite consultations or negotiations is key to establishing a safety net for the workers at the bottom of the wage scale while periodic review and adjustment of minimum wage rates is an absolute prerequisite to the meaningful operation of any minimum wage system.

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The Committee notes the information provided in the Government’s report and the attached documentation, in particular the adoption of the new Labour Code (Act No. 12 of 2003) and of Decree No. 983 of 2003, on the establishment of a National Council for Wages. It requests the Government to supply further information on the following points.

Article 1 of the Convention. The Committee notes that the new Labour Code does not apply to public servants and domestic service workers. In this regard, the Committee requests the Government to specify whether Act No. 53 of 1984, on fixing the minimum wage in the public and Government sectors is still in force, or whether the newly established National Council for Wages is mandated to determine minimum wages also for the public sector. The Committee would also appreciate if the Government would give some indications on the minimum wage applicable to domestic employees who fall outside the coverage of the Labour Code.

Article 3. The Committee notes that, under section 34 of the new Labour Code and section 3 of Decree No. 983, the minimum wages at the national level are set taking into account the cost of living. It asks the Government to give full particulars on how the cost of living is indexed in practice, and also to specify whether other factors, such as productivity or unemployment, are taken into consideration in determining minimum wages.

Article 4. The Committee notes that the National Council for Wages is chaired by the Minister of Planning and includes, among its members, an equal number of employers’ and workers’ representatives. It also notes that the Council’s principal functions are: to set minimum wages at the national level; consider methods and measures to guarantee the balance between wages and prices; determine the structure of wages for the different occupations and sectors to achieve a balanced income distribution at the national level; identify problems and defects in wage policies; formulate the national policy and comprehensive national programmes on wages and on the general level of prices and living standards; and to carry out studies at the national level for reconsideration of the minimum wages and periodic proposals made at least every three years.

The Committee understands that the National Council for Wages held its first meeting in September 2003 but appears not to have as yet determined the national minimum wage. The Committee requests the Government to provide additional documented information on the activities of the Council and any progress made in fixing minimum wage rates.

Article 5 and Part V of the report form. While noting the statistical information provided by the Government on the estimates of minimum and maximum wage levels by occupation and branch of economic activity, the Committee would thank the Government for continuing to supply up to date information on the practical application of the Convention, including for instance: (i) the currently applicable national minimum wage rates, as may have been set by the National Council for Wages, including the minimum wage applicable to workers employed in free zones; (ii) the approximate number of workers covered by the minimum wage legislation, or remunerated at the minimum wage rate; (iii) detailed labour inspection results showing the number of inspection visits conducted, violations reported and sanctions imposed; (iv) statistics on the evolution of minimum wage rates in recent years as compared to the evolution of economic indicators, such as inflation, in the same period; and (v) copies of official studies, such as annual reports of the National Council for Wages, related to the minimum wage system.

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The Committee notes the Government’s reports and the observations made by the Federation of Egyptian Industries and the Confederation of Egyptian Trade Unions on the application of this Convention.

The Committee notes that the Government indicates, in reply to its previous comments, that according to the results of the inspections carried out, there are no violations of the legislative provisions respecting minimum wages. The Government adds that the statistics relating to the inspections carried out, as well as those on the number of infringements of the minimum wage regulations and the penalties imposed, cannot be provided due to the fact that the annual statistics cover all types of infringements without any distinction. However, the Government states that the monthly statistics compiled by the manpower offices contain specific data on violations of the minimum wage legislation and will be forwarded to the International Labour Office when they have been supplied by the competent services.

With regard to the level of minimum wages, the Committee notes that the Government refers to the laws establishing them in the public and private sectors, which date respectively from 1984 and 1981. The Government also refers to Regulations No. 230 of 1989 fixing the minimum wage rate in the investment sector, which is set at the minimum wage rate applied outside the free zones. Finally, the Government refers to Law No. 32 of 1977 fixing the minimum wage applicable to workers employed in free zones. With regard to the minimum wage rates in force, the only indication contained in the Government’s reports concerns the minimum wage in the public and government sectors, where it appears to be set at 192 Egyptian pounds. Furthermore, the Government states in one of its reports that there is a new draft Labour Code which will apply the provisions of the Convention.

In its comments on the application of the Convention, the Federation of Egyptian Industries considers that the information requested by the Committee on the application of the Convention in practice has perhaps been sought due to the fact that there is no regular system in the country for the registration of inspection reports indicating whether or not there have been violations of the regulations on minimum wages and which can be consulted by the Committee.

While noting the Government’s statement that it will provide the requested information on inspections as soon as it is able to, the Committee notes that the Government’s reports only reply partially to the points raised previously concerning the application of the Convention in practice. Based on the information provided in the Government’s reports, the Committee understands that the annual minimum wage in the public and Government sectors is set at 192 Egyptian pounds, but it also believes that the latest legislative text fixing the minimum wage in these sectors is Law No. 53 of 1984. In addition, it notes the absence of information on the minimum wage rate in the private sector, where the last adjustment of which it has knowledge was made by Law No. 119 of 1981, and in free zones, where the Law establishing the minimum wage rate dates from 1977. In this respect, the Committee recalls that, under the terms of Article 4, paragraphs 1 and 2, of the Convention, ratification of the instrument carries the obligation not only to fix minimum wages, but also to adjust them from time to time in full consultation for this purpose with the organizations of employers and workers concerned. While noting the Government’s reminder of the existence in the country of social allowances supplementing wages and which also benefit workers receiving minimum wage rates, the Committee wishes to emphasize that the machinery for adjustment which has to be established under the Convention must allow the adjustment, from time to time, of the rates of the minimum wages themselves, over and above the receipt of social allowances. The Committee therefore requests the Government to indicate the manner in which minimum wages are adjusted periodically, in accordance with this provision of the Convention, in both the public and private sectors.

Furthermore, the Committee considers that it is not fully in a position to analyse the manner in which the Convention is applied in practice in view of the fact that it has not been given the information that it had requested previously, and it therefore requests the Government to indicate in its next report: (i) the minimum wage rates in force in all sectors, including the private sector and free zones; (ii) the number and different categories of workers covered by minimum wage provisions; (iii) the operation of minimum wage-fixing machinery; and (iv) the elements taken into consideration in determining the level of minimum wages. The Committee also hopes that the Government will soon be in a position to provide statistical information on the inspections carried out which have reported violations of the minimum wage legislation and the penalties imposed in these cases. Finally, it requests the Government to keep the International Labour Office informed of any progress achieved towards the adoption of the new draft Labour Code referred to by the Government in one of its reports.

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The Committee notes the information provided in the Government's report. It requests the Government to supply, in accordance with Article 2, paragraph 1, of the Convention in conjunction with Article 5 and point V of the report form, general information on the application of the Convention in practice, including: (i) the minimum wage rates in force; (ii) the available data on the number and different categories of workers covered by minimum wage provisions; and (iii) the results of inspections carried out (e.g. the number of violations of minimum wage provisions revealed, the penalties imposed, etc.).