“Under Egypt’s Labor Law No. 14 of 2025, fixed-term employment is legally defined, regulated, and time-bound. The new framework restricts renewals beyond five cumulative years, prohibits automatic extensions without written agreement, and requires transparent contract documentation. Articles 111–113 of the Law establish that any continuation beyond expiry converts the contract into a permanent one — ensuring fairness, accountability, and compliance.”
— Based on the Egyptian Labor Law No. 14 of 2025 (Articles 9, 102, 104, 111–113, 117–118, 130)
The introduction of Egypt’s Labor Law No. 14 of 2025 marks a defining shift in how employment contracts are regulated. Among its key updates are the new rules for fixed-term contracts, which seek to balance flexibility with employee protection.
While these contracts offer businesses short-term staffing agility, they also introduce strict limits to prevent abuse — including renewal ceilings, mandatory registration, and automatic conversion to indefinite employment after five years.
For HR professionals, employers, and business owners, understanding these new boundaries is crucial for compliance, cost control, and workforce stability.
1. Legal Framework and Purpose
Articles 111–113 of Labor Law No. 14/2025 establish the foundation for Egypt’s modern fixed-term employment system. The aim is twofold:
- To give employers flexibility for project-based or seasonal work.
- To safeguard employees from indefinite renewal practices or sudden termination.
This ensures that time-limited employment remains transparent, lawful, and non-exploitative.
2. Definition of a Fixed-Term Contract
Under Article 111, a fixed-term contract is defined as “a contract concluded for a specific duration or for a specific task, terminating automatically upon expiry or task completion.”
For validity, the duration and purpose must be clearly stated (e.g., one year for Project Alpha). If not, the contract may be reclassified as indefinite with higher protections.
HR Tip: Always specify start & end dates, project name, and scope of work.
3. Automatic Expiry and Renewal
A fixed-term contract ends automatically at expiry. However, if the employee continues working without a new agreement, Article 112 converts it into an indefinite contract.
Best Practice:
- Use automated HR reminders 30 days before expiry.
- Issue written renewals or non-renewal notices in advance.
Example: A contract ending June 30, 2026 but continued work = indefinite employment by law.
4. The Five-Year Renewal Limit
Article 113 prohibits cumulative fixed-term contracts exceeding five years between the same employer and employee. After that, the contract becomes permanent by law.
Example: A designer hired on 1-year contracts from 2025–2030 automatically gains indefinite status in the sixth year.
This protects employees from long-term temporary status and ensures fair treatment.
5. Early Termination Rules
Termination before expiry carries financial consequences:
- Employer-initiated: Compensation = one month of total wages per year of service.
- Employee-initiated: Possible liability for damages if resignation occurs without cause.
Example: A 2-year contract (EGP 20,000/month) terminated after 1 year = EGP 240,000 owed by employer.
6. End of Contract & Obligations
Upon expiry, employers must provide:
- All due wages and allowances
- Unused annual leave pay
- Social insurance clearance
- Service certificate (Article 130)
If early termination occurs, Articles 117–118 govern notice and compensation rules.
7. Probation in Fixed-Term Contracts
According to Article 104, probation applies only if:
- The contract exceeds six months.
- The probation period does not exceed three months.
Short-term (3-month) contracts cannot include probation.
8. Documentation & Filing Requirements
Under Article 102, contracts must be prepared in four identical originals:
- Employer
- Employee
- Labor Office
- Social Insurance Authority
Failure to file may render the contract unenforceable or void.
9. Fixed-Term vs. Independent Contractor
Article 9 clarifies that if work is performed personally, under supervision, and for pay — it is employment, not a service contract.
Risks of Misclassification:
- Retroactive compensation claims
- Social insurance liabilities
- Penalties and reclassification by courts
10. Employer Best Practices & Common Mistakes
- ✅ Include precise duration & purpose clauses.
- ✅ Register all contracts with authorities.
- ✅ Track expiry & renewals digitally.
- ❌ Don’t exceed five years cumulative service.
- ❌ Don’t reclassify employees as contractors.
11. Dispute Resolution & Compliance
In disputes, labor courts assess contract validity, renewal intent, and employer conduct. Violations can result in:
- Reinstatement orders
- Wage compensation
- Administrative fines
Practical insights for employers and HR professionals on managing fixed-term employment under Egypt’s modernized labor regime
Introduction
The introduction of Egypt’s Labor Law No. 14 of 2025 marks a turning point in the regulation of employment relationships, particularly in the area of fixed-term contracts. While such contracts have long been a preferred tool for flexibility in hiring, the new law introduces clearer boundaries and heightened obligations to ensure fairness and stability in the labor market.
For employers and HR managers, understanding how fixed-term contracts now operate—when they are valid, how they can be renewed, and what happens when they end—is essential to avoid unexpected liabilities or disputes.
This article provides a detailed, practical, and legally grounded analysis of fixed-term employment contracts under the new law, with direct reference to relevant legal provisions and their real-world implications.
1. Legal Framework and Purpose
The new labor law (Law 14 of 2025) devotes several provisions to contract duration and termination, especially in Articles 111 through 113, which outline the rules governing fixed-term employment.
These articles aim to strike a balance between two key objectives:
- Providing flexibility to employers who need time-bound or project-based labor; and
- Protecting employees from indefinite renewals or premature termination without fair compensation.
In essence, the law recognizes that temporary contracts are legitimate—but only when their use is objective, transparent, and time-limited.
2. Definition of a Fixed-Term Contract
Under Article 111, a fixed-term contract is defined as:
“A contract concluded for a specified duration or to perform a specific task, which shall terminate automatically upon expiry of the term or completion of the task.”
This legal definition clarifies that a fixed-term relationship must have a clear start and end point. If such clarity is missing, the contract risks being reclassified as an indefinite-term contract, which comes with higher protections and obligations for the employer.
➡️ Practical Tip for HR:
Always specify:
- The exact duration (e.g., one year starting 1/10/2025 and ending 30/9/2026).
- The purpose or project (e.g., construction of Project X, marketing campaign Y).
Without these details, the labor authority or courts may presume the relationship to be permanent.
3. Automatic Expiry and Renewal
According to Article 111 (Para. 2), a fixed-term contract automatically ends upon the expiry of its duration, without requiring a notice from either party. However, Article 112 introduces a key modification:
“If the parties continue the employment relationship after the contract’s expiry without a new agreement, the contract shall be deemed renewed for an indefinite term.”
This means that if an employer allows an employee to continue working after a fixed-term contract expires, the law automatically converts the relationship into a permanent one.
➡️ Example:
A company hires an accountant for a one-year fixed-term contract. The contract expires on 30 June 2026, but the employee continues to work without signing a renewal.
→ Under Article 112, the contract becomes indefinite, and all protections for permanent employees apply.
➡️ Best Practice:
To prevent unintended conversions, HR must:
- Track contract expiry dates through a digital HR system.
- Prepare renewal agreements at least 30 days before expiration.
- Obtain written consent for renewal or issue non-renewal notices.
4. Multiple Renewals and the Five-Year Rule
A major reform introduced by Law 14/2025 is the five-year cumulative limit for fixed-term contracts.
According to Article 113:
“If the duration of successive fixed-term contracts between the same parties exceeds five (5) years, the contract shall be considered an indefinite-term contract.”
This provision prevents employers from abusing short-term renewals to avoid granting employees the rights associated with permanent status—such as longer notice periods, enhanced compensation, and job stability.
➡️ Practical Implication:
- You may renew a fixed-term contract several times, but once total service exceeds five consecutive years, the relationship becomes indefinite by operation of law.
- The five-year limit applies regardless of whether the renewals are formalized as separate contracts.
➡️ Example:
An engineer is hired under consecutive one-year contracts from 2025 to 2030. After completing five years, the relationship automatically converts into a permanent one starting from the sixth year.
5. Early Termination of Fixed-Term Contracts
Under Article 111 (last paragraph) and Article 118, early termination of a fixed-term contract—by either party—has financial consequences.
- If the employer terminates before expiry without legitimate cause, the employee is entitled to compensation equivalent to one (1) month of total wages for each year of service (or part thereof).
- If the employee resigns before expiry without cause, they may be required to compensate the employer for losses resulting from premature termination.
➡️ Example:
A marketing executive hired for a two-year fixed-term contract (EGP 20,000/month) is dismissed after one year without cause.
→ Employer must pay EGP 240,000 (12 × 20,000) as compensation for the remaining contractual term.
➡️ Legal Note:
The law thus enforces the binding nature of fixed-term agreements: neither party may withdraw prematurely unless for cause, or unless both agree otherwise.
6. Termination by Completion of Work or Project
If the contract is tied to the completion of a specific project, Article 111 states that the relationship ends automatically once the project is completed.
However, if the employee continues working on another project or task for the same employer without interruption, the relationship may be considered renewed implicitly.
➡️ HR Recommendation:
Include clauses specifying:
- The specific project or phase to which the employee is assigned.
- Whether renewal or reassignment is automatic or subject to mutual agreement.
This ensures that both parties understand the scope and conclusion of the employment relationship.
7. Notice and End-of-Service Obligations
Unlike indefinite contracts, fixed-term contracts do not require notice for expiry-based termination. However, employers should still provide written confirmation of end-of-service and ensure the employee receives:
- All accrued salaries and allowances,
- Unused annual leave balance,
- Social insurance clearance, and
- Service certificate as per Article 130.
If the contract ends early (not by expiry), then the notice and compensation rules of Articles 117–118 apply.
8. Fixed-Term Contracts and Probation
While probation typically applies to indefinite contracts, Article 104 allows probation in fixed-term contracts only if:
- The total contract duration exceeds six months, and
- The probation period does not exceed three months.
➡️ Practical Tip:
Probation clauses in short-term (e.g., 3-month) contracts are invalid. If the law considers such a contract short-term, it must start without a probationary phase.
9. Documentation and Filing Requirements
Under Article 102, every employment contract—fixed or indefinite—must be prepared in four identical originals:
- One for the employer,
- One for the employee,
- One for the Labor Office,
- One for the Social Insurance Authority.
This ensures proper monitoring and compliance with labor standards.
➡️ Compliance Reminder:
Fixed-term contracts that are not registered or reported may be considered void in the eyes of labor authorities. Always file copies with relevant bodies to secure legal enforceability.
10. Fixed-Term Contract vs. Independent Contractor Agreement
Some employers attempt to structure fixed-term relationships as “service contracts” (عقد مقاولة) to avoid labor obligations.
However, Article 9 clarifies that the labor relationship exists wherever:
- Work is performed personally,
- Under the employer’s supervision, and
- For agreed remuneration.
➡️ Legal Risk:
Reclassifying employees as contractors can result in:
- Retroactive labor rights (compensation, social insurance),
- Penalties for misclassification, and
- Judicial requalification as an employment relationship.
Always ensure that fixed-term contracts reflect genuine temporary employment, not disguised labor.
11. Key Differences: Fixed-Term vs. Indefinite Contracts
| Aspect | Fixed-Term Contract | Indefinite Contract |
|---|---|---|
| Duration | Pre-determined (specific period or project) | Ongoing until termination |
| Renewal | Automatically converts to indefinite after 5 years | No renewal issue |
| Termination | Automatic at expiry; early termination requires compensation | Requires notice and cause |
| Notice Requirement | None for expiry | 3 months mandatory |
| Compensation | 1 month per year if terminated early | 2 months per year for unlawful dismissal |
| Conversion Risk | After 5 years or continuation post-expiry | N/A |
