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Protection of Wages Convention, 1949 (No. 95) - Egypt (RATIFICATION: 1960)

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Previous comment

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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Article 4 of the Convention. Partial payment of wages in kind. The Committee has been drawing the Government’s attention for a number of years to the need to take measures to ensure that allowances in kind, when authorized, are appropriate for the workers’ personal use and benefit and that they are fairly and reasonably valued, as prescribed by this Article of the Convention. In this respect, the Committee has observed that section 32(d) of the Labour Code of 2003, which reproduces section 30(d) of the previous Labour Code, fails to give full effect to the requirements of Article 4(2) of the Convention. The Committee recalls that the obligation to ensure that allowances in kind are appropriate for the worker’s personal use and benefit may be satisfied by exhaustively enumerating the permissible payments in kind, for instance, board and lodging, clothing, use of land or free medical treatment. It also recalls that the obligation to attribute a fair and reasonable value to payments in kind may be met in different ways such as the prohibition to exceed cost price or the ordinary market value, or the price as may be fixed by public authorities. The Committee accordingly hopes that the Government will take the necessary measures in order to fully implement in law and in practice the requirements of this Article of the Convention.

Article 6. Freedom of workers to dispose of their wages. The Committee notes the Government’s renewed reference to section 42 of the Labour Code, which reproduces section 39 of the previous Labour Code, and which prohibits employers from obliging workers to buy food, goods, or services from specific stores or buy goods produced or services provided by them. The Committee is obliged to reiterate that provisions regulating the use of company stores do not cover all the possible ways in which workers can be limited in their freedom to dispose of their wages (one example would be through exerting pressure on workers to make contributions to certain funds). It is therefore necessary for implementing legislation to contain an express provision generally prohibiting employers from restricting the freedom of workers to dispose of their wages. The Committee accordingly hopes that the Government will consider at the next suitable occasion the possibility of introducing a specific provision laying down a general prohibition upon employers from limiting the freedom of workers to dispose of their wages in any form and manner, directly or indirectly, and not simply in respect of the use of company stores.

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With reference to the information contained in the Government’s report, in particular, the adoption of the new Labour Code (Act No. 12 of 2003) and its implementing decrees, the Committee wishes to raise the following points.

Article 4 of the Convention. The Committee has been commenting for a number of years on the need to regulate in greater detail the conditions under which the partial payment of the wage in kind may be authorized. The Committee notes with regret that the Labour Code of 2003 contains no new provisions to ensure that the goods and products which may be offered in lieu of money are appropriate for the personal use and benefit of the worker and his/her family and that they are valued fairly. In addition, the Committee notes that, under section 32(D) of the new Labour Code, the method of payment of the wage, including any allowances in kind, is negotiated and agreed upon between the employer and the worker, whereas the Convention specifically requires the partial payment of wages in kind to be regulated only by national laws or regulation, collective agreements or arbitration awards, and not individual agreement. The Committee draws the Government’s attention to paragraphs 104-160 of its 2003 General Survey on the protection of wages, which offer guidance concerning possible ways in which legislative conformity with this Article of the Convention may be ensured. The Committee hopes that the Government will take appropriate action without further delay in this respect.

Article 6. The Committee notes that section 42 of the new Labour Code, which essentially reproduces section 39 of the old Labour Code of 1981, prohibits employers from obliging the worker to buy food, goods, or services from specific stores or buy goods produced or services provided by an employer. In this connection, the Committee wishes to refer to paragraph 210 of its 2003 General Survey on the protection of wages, in which it considered that nothing short of an explicit legislative provision setting forth a general prohibition upon employers from limiting the freedom of workers to dispose of their wages in any form and manner, directly or indirectly, and not simply in respect of the use of company stores, can be regarded as giving full effect to the requirements of the Convention.

The Committee requests the Government to indicate any measures taken or envisaged to give full effect to the requirements of the Convention in this regard.

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The Committee notes the Government’s report.

While taking due note of the Government’s indication that a unified Labour Code is currently under preparation, the Committee observes with regret that no progress has as yet been made regarding measures to ensure that full effect is given to the provisions of Article 4, paragraph 2, of the Convention. The Committee recalls that in the interest of protecting workers from abuse, the Convention requires appropriate measures to ensure that allowances in kind are appropriate for the personal use and benefit of the worker and his/her family and also that the value attributed to such allowances is fair and reasonable.

Moreover, the Committee notes that section 39 of the Labour Code, Act No. 137 of 1981, provides that no worker shall be required to purchase foodstuffs or other articles in any specified establishment or to buy any product supplied by the employer. In this respect, the Committee recalls that Article 6 of the Convention calls for a legislative provision formally prohibiting employers from limiting in any manner the freedom of workers to dispose of their wages. The Committee is bound once again to express the firm hope that in the ongoing process of drafting the unified Labour Code the Government will not fail to take the necessary action to bring its legislation into full conformity with the Convention. It asks the Government to report on any developments in this regard.

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Article 4, paragraph 2, of the Convention. The Committee has been requesting the Government to take measures necessary to ensure (i) that allowances in kind should be appropriate for the personal use and benefit of the worker and his family and (ii) that the value attributed to such allowances should be fair and reasonable. It notes the Government's indication that it is in the process of preparing a Consolidated Labour Code. The Committee can only reiterate its hope that necessary action will soon be taken to ensure the compliance with the Convention on this point, on which it has been commenting for a number of years.

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Further to its previous comments on Article 4, paragraph 2, of the Convention, the Committee notes the Government's indication that it is in the process of preparing a new Labour Code which will include measures necessary to ensure (i) that allowances in kind should be appropriate for the personal use and benefit of the worker and his or her family and (ii) that the value attributed to such allowances should be fair and reasonable. The Committee hopes that necessary action will be taken in the very near future to ensure the compliance with the Convention on this point, on which it has been commenting for a number of years.

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Article 4, paragraph 2, of the Convention. With reference to its previous observation, the Committee notes the Government's indication that allowances in kind supplement cash remuneration and that, according to the case-law in Egypt, the employer cannot abolish or reduce the allowances in kind, because they are considered as remuneration as long as they are granted as a counterpart of work.

The Committee points out that this does not ensure the conditions laid down in the above provision of the Convention, namely: (i) that allowances in kind should be appropriate for the personal use and benefit of the worker and his family; and (ii) that the value attributed to such allowances should be fair and reasonable. The Committee reiterates its hope that necessary action will soon be taken to ensure the compliance with the Convention on this point, on which it has been commenting for a number of years.

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Article 4, paragraph 2, of the Convention. In comments made for a number of years, the Committee noted that, according to the Government, allowances in kind are governed by the internal regulations of the various services and are subject to all legislation respecting wages since they form part of the wages by virtue of section 1 of the Labour Code, Act No. 137 of 1981. It has already pointed out that these regulations could theoretically be changed at the will of the chief of the service or the owner of the establishment and that they are not, therefore, sufficient to ensure the application of this Article of the Convention.

The Government states in its report that it would be difficult to introduce in the national legislation a text defining the allowances in kind because the nature of work varies from one industry to another.

The Committee points out that this provision of the Convention requires the Government to take appropriate measures to ensure the following two conditions: (i) allowances in kind should be appropriate for the personal use and benefit of the worker and his family; and (ii) the value attributed to such allowances should be fair and reasonable. It does not necessarily involve definition in the legislation of the actual allowances in kind to be paid in each industry. Noting from the Government's report that it is reviewing the national legislation in order to bring it into conformity with the international labour standards, the Committee hopes that necessary action will soon be taken to ensure the compliance with the Convention on this point.

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Article 4, paragraph 2, of the Convention. The Committee recalls that it indicated in its previous comment that, in accordance with Article 4, paragraph 2, of the Convention, in cases in which partial payment of wages in the form of allowances in kind is authorised - as is the case under Egyptian legislation - appropriate measures shall be taken to ensure that such allowances are appropriate for the personal use and benefit of the worker and his family and that the value attributed to such allowances is fair and reasonable. It specified that these measures shall be taken even in cases where a minimum wage in cash is provided and where these allowances in kind supplement the minimum wage in accordance with usage and customs. The Committee notes that, according to the Government, allowances in kind are governed by the internal regulations of the various services and are subject to all legislation respecting wages since they form part of the wages by virtue of section 1 of the Labour Code, Act No. 137 of 1981.

The Committee understands that these internal regulations of the various services are a sort of enterprise regulation and, therefore, even if as the Government indicates, the allowances that are governed by them were subject to the legislation respecting wages, these regulations could theoretically be changed at the will of the chief of the service or the owner of the establishment. As the Committee has pointed out on many occasions since 1964, this practice is insufficient to ensure the application of this Article of the Convention. It therefore requests the Government to take the necessary measures to adopt provisions, by means of an ordinance or other types of regulations adopted under its labour legislation, in order to give effect to this Article of the Convention. It recalls that the Government has promised on several occasions to take such measures.

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Article 2 of the Convention. Further to its previous comments, the Committee notes that Act No. 48 of 1978, enacting the Statute of the Workers in the Public Sector contains provisions concerning wages and that section 1 of this Act provides that the Labour Code applies to all cases not covered by a special provision of the above Act.

Article 4. The Committee notes that, although the term "wages" is defined in such a way as to include allowances in kind, there is no statutory provision to regulate these payments in accordance with the requirements of this Article. The Committee recalls that paragraph 2 of the Article provides that, in cases in which partial payment of wages in the form of allowances in kind is authorised - and this is the case in Egyptian legislation - appropriate measures shall be taken to ensure that such allowances are appropriate for the personal use and benefit of the worker and his family, and that the value attributed to them is fair and reasonable. These measures shall be taken even in cases where a minimum wage in cash is provided and where these allowances in kind supplement the minimum wage in accordance with usage and customs. The Committee therefore hopes that the Government will take the necessary steps to ensure that effect is given to this Article.