As more and more Chinese companies expand into the Middle East and North Africa, Egypt has become an increasingly popular destination for foreign investment due to its strategic location and manufacturing potential. For employers, understanding local labor laws—especially around probation periods, termination procedures, and compensation—is essential. This article provides a practical breakdown based on Egyptian labor law, with insights from real-world experience.

Probation Period in Egypt

Maximum of 3 Months, Non-Renewable

According to Egyptian labor law:

1. The maximum probation period is 3 months (90 days).
2. An employee can only be placed on probation once with the same employer.
3. The probation clause must be clearly stated in the employment contract.
4. During the probation period, either party can terminate the contract at any time without notice or compensation.

Practical tips:

1. Clearly state in the contract: “Probation Period: 3 months starting from…”
2. Conduct a formal performance review in the second month to decide on retention early.
3. If terminating during probation, send a formal letter for record-keeping.

Case example:

A Chinese manufacturing company in Cairo hired a warehouse clerk under a contract stating a 3-month probation. On day 75, after repeated absences, the company terminated the contract immediately with a written notice—no compensation or prior notice was required.

Termination After the Probation Period

Advance Notice or Payment in Lieu is Mandatory

Once the probation period ends, the employer must either:

1. Give at least 2 months’ notice before termination (if the employee has been with the company for 1 year or more), or
2. Pay in lieu of notice (i.e., equivalent compensation if not providing advance notice).

Notice periods vary by years of service:

1. ≤ 10 years of service: 2 months’ notice
2. 10 years of service: 3 months’ notice

Employees must continue working during the notice period, and their salary must be paid as usual.

Case example:

An office assistant who had worked at the company for 4 years was let go due to a restructuring. The company had to either give a 2-month written notice or pay 2 months' salary as compensation in lieu.

Severance Pay for Economic Layoffs

1.5 Months’ Salary for Every Full Year Worked

Under Article 122 of Egypt’s Labor Law, if an employee is let go through no fault of their own (e.g., restructuring, position elimination), the employer must pay severance.

How it’s calculated:

1. 1.5 months of salary for every full year of service
2. Partial years are calculated proportionally
3. The severance is based on the last full month’s basic salary + fixed allowances
4. Severance and notice pay are separate—employees are entitled to both

Case example:

An IT support specialist with 2.5 years of service and a monthly salary of EGP 12,000 was laid off due to outsourcing:

1. Notice pay: EGP 24,000 (2 months’ salary)
2. Severance: 2.5 years × 1.5 months = 3.75 months × EGP 12,000 = EGP 45,000

Need Help?

If you need an Egyptian employment contract template, a bilingual (English-Chinese) offer letter, or support in setting up local payroll and benefits, feel free to reach out to our team.

Remoly · Your Global HR Compliance Partner — ???? www.remoly.net