How Does Labor Law 14 of 2025 Affect Employment Contracts in Egypt

Introduction

With the adoption of Labor Law No. 14 of 2025 in Egypt, effective from 1 September 2025, significant reforms will reshape the regulatory landscape of employment contracts. For business owners and HR professionals, understanding how these changes affect employment agreements—drafting, enforcement, renewal, and termination—is crucial to ensuring compliance, reducing legal risk, and managing workforce transitions smoothly. This article explains the practical impacts of Law 14/2025 on employment contracts, focusing on key areas that will require attention and adjustment.

Background & Scope

First, it’s important to frame the legal transition:

• The new law replaces Law No. 12 of 2003 and Law No. 125 of 2010.
• It comes into effect on 1 September 2025, and employment disputes arising thereafter will generally fall under its regime.
• However, rights already accrued under older laws are preserved, i.e. the “acquired rights” (“حقوق مكتسبة”) principle remains.
• The law applies to the private sector; public/government employees and domestic workers are excluded.

These transitional and scope rules are important: when drafting or amending contracts now, one must check whether the contract terms fall under the old or new regime, especially for long-term contracts spanning the transition.

Presumption of Indefinite Contracts & Formalities

One of the more structural shifts is that the new law presumes that employment relationships are indefinite in nature, unless valid justification supports a fixed-term arrangement. Practically, this presumption means that unless an employer can clearly justify a temporary or project-based contract, the employment might be legally regarded as permanent / indefinite.

Furthermore, Law 14/2025 tightens formal requirements for contracts:

• Employers must issue four original copies of an employment contract (for the employer, employee, social insurance authority, and the Labour Office).
• Contracts (or their counterparts) must include clear terms of job description, working hours, remuneration, benefits, notice periods, probation (if any), etc. The law intends for greater clarity and transparency.

From a practical HR standpoint: existing employment contracts should be reviewed before 1 September 2025 to ensure they meet these formal requirements (or be amended accordingly), and new contracts should incorporate the mandatory terms.

Termination & Dismissal Provisions

A major area of impact involves how employment contracts may be terminated, and what protections the law now provides against arbitrary dismissal.

Restriction on Arbitrary Dismissal & Resignation Formalities

• The law invalidates pre-signed resignation forms and prohibits employers from using them as a basis for termination.
• All resignations must be ratified by the competent administrative authority (Labour Office) to be effective.
• Employees have the right to retract their resignation within 10 days after the employer’s acceptance.

These changes mean that from 1 September 2025 onwards, resignation is no longer solely a bilateral private matter between employer and employee; it’s subject to administrative oversight and legal safeguards.

Termination of Indefinite Contracts

• For dismissals without legitimate cause, the law mandates notice and compensation equal to two months’ wages per year of service.
• The notice period for indefinite contracts is standardized to three months, regardless of the employee’s length of service.
• Courts or administrative bodies must approve dismissals for disciplinary reasons — employers cannot unilaterally dismiss for misconduct without judicial authorization.

From an HR practice perspective, this means that contract clauses attempting to circumvent or reduce notice or compensation below these statutory minima will likely be unenforceable. Employers must ensure termination policies and procedures comply with due process, documentation, and judicial oversight.

Termination of Fixed-Term Contracts

• When fixed-term contracts are terminated prematurely by the employer, the new law requires compensation equal to one month’s salary for each year of service (pro rata) unless the contract itself provides otherwise.
• If a fixed-term contract is renewed multiple times and exceeds five years in aggregate, severance-like compensation (one month per year) becomes payable at the end of the relationship.

Thus, employers must carefully assess their fixed-term contracting practices: frequent renewals over long periods may create liabilities, and premature termination must consider statutory compensation.

Notice & Probation Clauses

Although this article does not go in-depth on notice periods and probation (those are covered in separate upcoming articles), it is worth flagging:

• Notice periods must be in line with the statutory minimum (3 months for indefinite contracts).
• Clauses that purport to waive statutory notice or reduce it below the minimum may not be valid.
• Probation periods must be reasonable and clearly stated.

Contracts should be revised to align with these minimum standards, and HR policies updated accordingly.

Incorporation of Modern Work Arrangements

The new law explicitly recognizes modern forms of employment, which has implications for contract drafting:

• Remote work, part-time, flexible hours, job sharing, and platform-based work are formally recognized as valid employment relationships.
• The same rules (labor rights, protections, obligations) apply to these models, adjusted for the nature and method of performance.

For HR teams, contract templates must expand to include clauses tailored to these arrangements (e.g., specifying remote-work location, communication protocols, performance metrics, equipment, expense reimbursement, data security).

Transitional Compliance & Contract Amendments

Because the new law will begin applying from 1 September 2025, employers should take certain proactive steps:

1. Audit existing contracts: Identify clauses that conflict with Law 14/2025 (notice, termination, fixed-term renewal, resignation procedures) and prepare amendment templates.
2. Issue new contracts post–1 September that comply fully (with four originals, detailed terms, notice, probation, etc.).
3. Communicate with employees: Inform them of changes, rights of retraction of resignation, etc.
4. Train HR/legal teams to apply the new process (e.g., ensuring resignations go through administrative ratification).
5. Review workforce segmentation: For contractors, gig workers, Remote workers — ensure contract models reflect the new law’s recognition and protections.
6. Coordinate with legal counsel: Some implementing regulations (ministerial decrees) are yet to be issued; interpretative clarity may evolve.

Risks & Considerations for Employers

• Clauses in old contracts waiving or contracting out statutory rights will likely be invalid or subject to challenge.
• Employers may face increased severance costs under the new compensation formulas.
• Judicial approval for dismissals may slow down rapid HR decisions — businesses should plan for due process and documentation.
• Excessive renewals of fixed-term contracts may convert obligations into severance liabilities.
• Administrative procedures (resignation ratification, notices) add procedural overhead.
• Because some implementing regulations are pending, businesses must monitor guidance from the Ministry of Labor and courts.

Summary & Key Takeaways (For HR / Business Owners)

Area	Key Change Under Law 14/2025	Practical Implication for Contracts / HR
Contract Type	Presumption of indefinite employment	Fixed-term contracts must be justified; otherwise treated as indefinite
Formalities	Four originals, detailed contractual terms	Update contract templates to meet formal requirements
Resignation	Must be ratified by Labour Office; retraction allowed	Adjust resignation procedures and employee notices
Notice & Compensation	3 months’ notice (indefinite); 2 months’ pay per year; 1 month/year for fixed-term early termination	Review termination clauses and ensure compliance
New Work Patterns	Remote, part-time, job sharing, platform work fully recognized	Customize contract models for different work modes
Contract Renewal	No hard cap on renewals, but liability arises after 5 years	Monitor renewals and cumulative service
Transitional Safeguards	Rights previously accrued preserved	Determine which contracts operate under old vs new law