Egypt: A Dispute Resolution: Most in Demand Arbitrators Overview

At the beginning of 2025, Egypt faced several economic challenges that occurred as a result of political tensions happening either in Gaza or in the Red Sea.

These tensions led to a significant drop in the Suez Canal revenues, which fell to USD3.6 billion in the financial year 2024-2025.

In response, Egypt implemented updated laws and regulations to attract foreign direct investments, with the aim of increasing the state’s revenue and reducing the deficit that exposes the Egyptian economy to shocks.

Enhancing the Private Sector Through a Beneficial Tax Regime

The government introduced a flat tax system for SMEs with annual turnover up to EGP15 million, alongside quarterly VAT returns and annual labour income tax settlement. These measures simplify the tax burden and bring informal businesses into the formal country’s economy, which creates a more coherent dispute resolution system.

New Labour Law No 14 of 2025 Grants More Security to Employees

In the event of termination of fixed-term employment

The new Labour Law No 14 of 2025 obliges the employer, in the case of fixed-term employment contracts that are concluded or renewed for more than five years, to compensate the employee in the event of premature termination. The compensation to be paid to the employee is one month’s salary per year of service.

In the event of termination of indefinite-term employment

The new Labour Law No 14 of 2025 provides for protection against the termination of indefinite employment without just cause. Employers are obliged to notify the employee three months prior the termination, regardless of the employee’s length of service.

Maternal and parental rights under human rights safeguards

• Paid maternity leave is four months, including the period before and after childbirth under the new Labour Law No 14 of 2025, instead of three months under the previous law. Maternity leave can be taken a maximum of three times during an employee’s service; the new law allows this entitlement without taking into account the employee's years of service.

• The new Labour Law No 14 of 2025 introduces paternal leave entitlement. Male employees are now entitled to emergency paid leave on the day of their child's birth, which is not deducted from their annual leave balance. It can be taken up to a maximum of three times during their period of service. 

Enhancement of labour dispute resolution system

The new Labour Law No 14 of 2025 establishes the “Labor Court” within the jurisdiction of each court of first instance and court of appeal. These specialised courts became effective on 1 October 20205.

In connection with collective employment contracts, the new Labour Law No 14 of 2025 provides for the establishment of a “Mediation and Arbitration Centre” within the Ministry of Manpower to which either party may bring a dispute if it is not settled through mediation within 21 days. While this step could increase the efficiency of dispute resolution, it could lead to conflicts between the administrative courts and the Mediation and Arbitration Centre, especially when a dispute relates to an employment relationship between a public official and a governmental authority, as this type of employment dispute falls under the jurisdiction of the administrative courts.

Conclusion

The Egyptian government has implemented several laws and regulations aimed at improving the private sector’s governance and inclusion in the national economy. These measures include creating a more favorable tax regime for SMEs and improving the work environment through the enactment of the new Labour Law, which continues to be beneficial for both employers and employees.