Labor Market Reform In Egypt

In the year 1996, the official rate of unemployment in Egypt was 10 percent. Unemployment in the country is a major problem haunting Egypt. Agriculture is one source, which provides employment. Farming is however not a source, which ensures a growth in employment opportunities.
In the year 1996, as many as 500,000 people entered the labor market. As such, creating job opportunities for all was a big challenge. There are few norms adopted by the government in Egypt. The norms were not of much help because they led to more rigidity and rendered the labor market immobile.

In order to overcome these drawbacks, labor market reform in Egypt was introduced.

Rules followed by the Egyptian government (in the context of labor market):

As per the Labor Law 137, the following are to be complied with:
Employees are required to get registered with the labor office at the district level. The officials carry out evaluation of skills and rate employees. The employees are given a certificate, which indicate the ratings.
When an employee is recruited or an employee leaves the job or is fired, the same has to be intimidated to the labor office at the district level.
When the firm with , which the employees are associated with happens to be taken over by another company, the same has to be informed to the labor office. The responsibility of the workers are by default passed onto the new owner of the company.

Unlike in some other countries where recruitment can also be carried out by some non governmental agency, in Egypt the MPDT or Manpower and Training Directorate control the entire show. So, the non governmental agencies are not allowed to recruit people. The labor market rules are not very employee friendly and leads to a lot of inconvenience not only for the employers but also for the employees.

The Egyptian American Chamber of commerce feels that the government in Egypt ought to simplify rules and all labor market reform in Egypt ought to be directed to the same.
Labor market reform in Egypt- At a glance:
It is being exceedingly felt that the government intervention should be minimum if quality jobs are to be created.
The labor market reform in Egypt also aims at bringing about dynamism in the job market. The Egyptian American Chamber of commerce feels that labor market reform in Egypt should be such that it should permit other non governmental agencies to operate as well.
The employers should be given the freedom to restructure their labor force as per requirements of the prevailing conditions in the market.
Rules pertaining to contracts for a limited period ought to be reviewed. Extensions should be permitted. In the absence of labor market reform in Egypt, workers would feel uncertain about their jobs.

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Last Updated on : 26th June 2013

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