Employee Discipline and Dismissal Procedures in Egypt

A production incident can require immediate protection of people and equipment. It does not automatically authorise a manager to dismiss the employee concerned. For companies operating in Egypt, the first decision is whether the case involves an ordinary disciplinary sanction, temporary suspension, disciplinary dismissal or another legally distinct termination route.

This article explains the principal statutory rules for HR, legal and operational management under Labour Law No. 14 of 2025. Quoted English passages below are working translations of the relevant Arabic provisions, not an official translation. Contractual benefits, collective agreements and special statutory protections must also be checked for the particular workforce.

1. Establish the rules before a disciplinary case arises

Article 137 — the operative obligation:

“Every employer employing ten or more workers shall prepare regulations governing the organisation of work, according to the nature of the activity, including in particular promotion, transfer and wage systems, violations constituting a breach of employment duties, and disciplinary sanctions, within sixty days of the establishment commencing work, the threshold being reached, or this Law entering into force, as applicable.”

The same article requires delivery of a copy to the competent administrative authority for review and approval. The authority obtains the competent trade union organisation’s opinion: it has no more than 15 days from receiving the regulations to respond, otherwise its silence constitutes agreement. If the administrative authority neither approves nor objects within 30 days from receiving them, the regulations become effective. The employer must display them conspicuously at the establishment, its branches and work sites.

These are separate clocks. An internal approval date does not prove receipt by the authority or union. Keep the submitted version, dated receipt, response or evidence of the elapsed statutory period, and evidence of display. A missing filing is a compliance breach; it should not be turned into the unsupported proposition that the employer has no disciplinary powers of any kind.

Consequence: Article 283 applies a fine of EGP 2,000–10,000 to breach of Article 137, with doubling on recurrence. Article 283 does not state that this fine is multiplied by the number of workers.

2. Match the allegation to a permitted and proportionate sanction

Article 138 requires the conduct to be connected with work and the disciplinary regulations to identify violations and proportionate sanctions in accordance with Article 139. The statutory sanctions are:

• Written warning.
• Deduction from basic wage.
• Postponement of the annual increment for no more than three months.
• Withholding no more than half the annual increment.
• Postponement of an otherwise due promotion for no more than one year.
• Reduction of basic wage by no more than one increment.
• Demotion to the immediately lower grade without reducing wage.
• Dismissal in accordance with the Law.

Article 140 prohibits more than one sanction for the same violation. It also prohibits combining the Article 139 wage deduction with another financial sanction where the amount to be deducted exceeds five days’ wage in the month. Under Article 143, a disciplinary deduction cannot exceed five days of basic wage for one violation, and collections for sanctions cannot exceed five days of that wage in one month. A deduction expressed as a percentage refers to the employee’s daily basic wage.

Article 144 permits an increased sanction for a new violation of the same type within one year of notification of the earlier sanction. That is a condition to assess, not a general licence to increase a penalty whenever HR labels conduct “repeated”.

3. Run the investigation against the correct deadlines

Article 141 — notice, defence and investigation:

“No sanction may be imposed on a worker until the worker has been notified in writing of what is alleged, their statements have been heard, their defence investigated, and this recorded in minutes deposited in their personal file. The investigation shall begin within no more than seven days from discovery of the violation and shall not exceed three months from its commencement; it may be extended by a further three months if new facts or documents emerge during the investigation.”

The employee’s trade union organisation may nominate a representative to attend. For violations punishable by a warning or a deduction of no more than one day’s basic wage, Article 141 permits an oral investigation, but its substance must be recorded in the sanction decision. Every sanction decision must give reasons.

Article 142 assigns the investigation to the establishment’s legal affairs function. Where none exists, the employer may appoint an experienced person or another employee, provided the investigator’s job level is not below the level of the employee being investigated.

Article 138, second paragraph — the final sanction deadline:

“A disciplinary sanction may not be imposed on the worker after thirty days have elapsed from the date on which the investigation into the violation was completed.”

Example: An internal report identifies an inventory discrepancy. Management should record when the suspected violation was discovered, notify the employee of the allegation and begin the investigation within seven days. Waiting for a regional HR committee meeting does not itself extend that period. If genuinely new documents emerge, record them and the basis for extending the investigation; do not use the extension as a routine administrative allowance.

4. Distinguish the manager’s powers from the court’s powers

Article 148 — authority:

“The competent Labour Court shall have jurisdiction to impose the sanction of dismissal from work. The employer, or a person delegated by the employer for that purpose, shall impose the other disciplinary sanctions. The establishment manager may impose a written warning and a wage deduction for a period not exceeding three days.”

The manager’s power in that capacity is therefore narrower than the employer’s or a properly authorised delegate’s power. Record the role and delegation actually relied on. Neither an internal group policy nor a job title transfers the Labour Court’s dismissal jurisdiction to management.

Article 148 permits dismissal only for serious fault and identifies the following serious-fault cases, with conditions that must not be omitted:

• Proven assumption of a false identity or submission of forged documents.
• Proven fault causing serious damage to the employer, provided the employer reports the incident to the competent authorities within 24 hours of learning of it.
• Proven repeated failure to observe instructions necessary for worker or establishment safety, where those instructions are written, conspicuously displayed, and a written warning has been given.
• Proven disclosure of the establishment’s secrets which causes serious damage to it.
• Proven competition with the employer in the same activity.
• Proven presence during working hours in a state of manifest drunkenness or under the influence of a narcotic substance.
• Proven assault on the employer or general manager, or a serious assault on a superior during or because of work.

Example: A machine operator repeatedly bypasses a safety instruction. A court dismissal request based on that ground requires more than a manager’s description of the conduct as dangerous: retain the written and displayed instruction, the written warning and evidence of repetition. If the allegation instead concerns fault causing serious damage, the separate 24-hour reporting condition must be examined and evidenced.

5. Suspension is a temporary measure with pay and judicial safeguards

Under Article 145, the employer may issue a written suspension for no more than 60 days on full wage where: an investigation into a workplace violation requires it; the employee is accused of a felony, a misdemeanour involving honour, honesty or public morals, or another misdemeanour inside the workplace; or the employer has asked the Labour Court to dismiss the employee.

For the first two grounds, Article 146 allows the employee to challenge the suspension before the Labour Court’s judge of interim matters within three days of notification or knowledge. The judge must determine it by the following day at the latest; an invalid suspension leads to an order to return to work.

Article 147 permits the employer to apply to that judge ten days before suspension expires for an extension with half wage. Management cannot simply impose the extension itself. If no judicial decision is made before expiry and the employee has not returned, suspension continues on full wage pending the decision. Rejection requires the employee’s immediate return when the last suspension period ends. For a suspension on the criminal-accusation ground, closure of the investigation, an order that there is no basis for criminal proceedings, or acquittal requires reinstatement and payment of unpaid suspension entitlements; failure to reinstate is treated by Article 147 as arbitrary dismissal.

6. Court proceedings, notice and compensation are different questions

Articles 149–150 provide a voluntary amicable-settlement route without prejudice to litigation. Either party may request settlement within ten days of the dispute arising; the committee must finish within 21 days of the request. If settlement fails, the recorded dispute can be referred to the Labour Court at either party’s request. Article 150 requires a dismissal dispute to be decided urgently within three months of the first hearing. Where the documents prima facie support the employee’s request, the court orders payment equivalent to wage from dismissal, capped at six months. Amounts received under that decision are deducted from compensation or other sums subsequently awarded, subject to Article 143; they are not automatically a separate six-month windfall. Dismissal for union activity can result in reinstatement if the employee requests it.

Article 165 — unjustified termination of an indefinite-term contract:

“If the employer terminates an indefinite-term contract for an unlawful reason, the worker shall be entitled to compensation for the damage suffered because of that termination, of not less than two months’ wage for each year of service, without prejudice to the worker’s right to claim their other entitlements prescribed by law.”

This is a statutory minimum for that specified situation, not a universal severance formula. Article 165 also identifies unlawful grounds including union membership or activity, acting or seeking to act as a workers’ representative, bringing or participating in a complaint or claim against the employer, attachment of the employee’s entitlements, using statutory leave, and colour, sex, marital status, family responsibilities, pregnancy, religion or political opinion.

Example: If an indefinite-term employee with five completed years of service is found to have been terminated for an unlawful reason, the Article 165 minimum is equivalent to ten months’ wage. It is a floor, not a cap or a prediction of the award. For an illustration with an established monthly wage of EGP 30,000, the minimum is 2 × 5 × EGP 30,000 = EGP 300,000. Article 1 defines wage to include basic and variable remuneration; do not automatically substitute basic wage alone. Establish the legally applicable remuneration and service period from the contract and payroll evidence, and calculate other entitlements separately. Article 156 separately requires three months’ written notice for indefinite-term termination; Article 164 requires the employer to pay the wage equivalent of omitted notice or its remaining part. Under Article 158, the notice period runs from receipt. Article 159 prohibits giving notice during leave and addresses the start after leave and suspension of the clock during sick leave. Retain service and leave records when calculating the period. Notice pay does not convert an unlawful reason into a lawful one.

7. Keep criminal fines separate from compensation and payroll controls

Article 294 — the penalty for specified disciplinary breaches:

“Anyone who contravenes Articles 140, 141, 142, 143, 144, 145, Article 151 (second paragraph), 152 or 198 of this Law shall be punished by a fine of not less than one thousand pounds and not more than twenty thousand pounds; the fine shall be doubled in the event of recurrence.”

For the controls discussed here, the principal distinctions are:

• Article 137 regulations and Article 153 financial-sanctions register: EGP 2,000–10,000 under Article 283, doubled on recurrence. Article 153 also requires a separate account for proceeds for workers’ social, cultural and sporting purposes; those proceeds cannot finance Article 272 obligations.
• Investigation, multiple sanctions, deductions and suspension breaches within Articles 140–145: EGP 1,000–20,000 under Article 294, doubled on recurrence. That article does not prescribe multiplication by worker count.
• Imposing a sanction outside Article 138’s 30-day limit: Article 288’s second paragraph applies the first paragraph’s EGP 500–5,000 fine, multiplication by the workers concerned and doubling on recurrence.
• Unlawful indefinite-term termination: the compensation rule is Article 165. It should not be described as a criminal fine.

These are statutory ranges, not an automatic combined invoice for every incident. Article 280 preserves any more severe penalty under the Penal Code or another law. Article 298 applies the relevant penalty to the person responsible for a company’s actual management only where knowledge is proved and a breach of their managerial duties contributed to the offence; the legal entity is jointly liable for financial penalties and compensation.

Employment decisions need both corporate and litigation expertise

For a company considering an employment exit, understanding the statutory rules is only part of the assessment. Employment litigation expertise adds a practical perspective: how the company’s reasons, evidence and procedural choices may be examined and challenged before a labour court.

Consortio combines corporate advisory with hands-on employment litigation experience to assess the available options, plan the process and prepare to defend the company’s position if a dispute arises. Whether the concern involves misconduct, repeated breaches of instructions or performance, the approach must reflect the particular facts and legal grounds, with the aim of reducing avoidable liability.

A practical control file for HR and legal

The following allocation is a recommended internal control, rather than a statutory organisation chart:

1. HR: keep the effective regulations, filing and display evidence, incident/discovery date, employee notices and personal file.
2. Legal/investigator: record the applicable offence, evidence, defence, deadlines, extension grounds and reasoned outcome.
3. Authorised decision-maker: confirm the proposed sanction, proportionality and authority before communication.
4. Payroll: check basic-wage deduction limits and suspension pay; maintain the financial-sanctions register and separate proceeds account.
5. Legal counsel: handle any court dismissal application, suspension extension or termination assessment through the correct legal route.

Before taking a final decision, contact Consortio to review the circumstances and develop an approach informed by both the legal requirements and the realities of employment litigation.

Sources: Labour Law No. 14 of 2025, Articles 1, 137–150, 153, 156, 158–159, 164–165, 280, 283, 288, 294 and 298. The cited provisions were checked against the Official Gazette copy hosted by the Egyptian Tax Authority, printed pages 60–69 and 106–111. This article addresses the statutory framework; it does not reproduce every special-sector rule or establishment-specific regulation.

Related resource: English translation of Egyptian Labour Law No. 14 of 2025.

General legal information, not advice on a particular dispute. The controlling Arabic legislation and the facts of the employment relationship must be considered together.