There is a big myth at the business and legal community stating that the New Investment Law, which protects the investors (i.e. the employers), should be in contradiction with the Employment Law, which aims to protect the employees from their employers. Hence, it is necessary to study thoroughly the relationship between these 2 Laws in order to confirm whether they contradict each other, or they complement each other.
In order to draft this article, I will, first of all, state the related articles at the New Investment Law. Then, I will analyze the relationship between these 2 Laws.
The articles at New Investment Law related to the Employment Law and other Laws concerning the employment relationship are as follows:
Article 4 from the issuance of the New Investment Law provides the following:
The joint-stock companies subject to the provisions of this Law shall hereby be exempted from the provisions of Law No. 113 of 1958 on Appointment to Posts in Joint-Stock Companies and Public Organizations.
Also, the joint-stock companies shall not be subject to the provisions of Law No. 73 of 1973 setting forth the conditions and procedures of electing labor representatives to the board of directors of public sector units, joint stock companies, and private organizations and societies. The Articles of Association of the company shall indicate the manner of involving the employees in the Management of the company.
Article 7 from the issuance of the New Investment Law provides the following:
The employees subject to the provisions of Paragraph (3) of Article (20) of the Investment Law promulgated by the Law No. 230 of 1989 shall continue enjoying the same status established for them, and these provisions shall not prejudice the profit distribution systems applied to the companies which are existing on the date that this Law enters into force if this is better for them.
Article 45 of the New Investment Law provides the following:
The Free Zone projects shall not be subject to the provisions of Law No. 113 of 1958 on Appointment to Posts in Joint-Stock Companies and Public Organizations.
The provisions of the Labor Law shall apply to the work relations and occupational safety and health in these zones. These provisions, with the labor rights included therein, shall be deemed the minimum that may be agreed upon in the individual or collective employment contracts which are concluded with the workers of the projects licensed to operate in these zones.
The Free Zone projects shall develop and be bound by internal bylaws on their system of work and shall submit such bylaws to the Authority’s Chief Executive Officer, or whoever he authorizes, for approval. These bylaws shall complement the individual or collective employment contracts. The Authority’s Chief Executive Officer may object to the provisions provided for in the bylaws which violate the public order or if they include fewer privileges than the privileges established in the Labor Law.
The provisions of the Social Insurance Law promulgated by the Law No. 79 of 1975 shall apply to the workers of the projects which conduct their activities in the Free Zones, and they shall be subject to the Law on the Social Insurance for Employers and equivalents promulgated by the Law No. 108 of 1976.
2.1. All joint stock companies established, in accordance to the New Investment Law, shall not be subject to the provisions of Law No. 113 of 1958 on Appointment to Posts in Joint-Stock Companies. This Law provides that employees in joint stock companies should be hired after a competition and those employees should not be cousins to the board or the general manager of the joint stock companies.
2.2 The joint-stock companies, subject to the New Investment Law, shall not be subject to the provisions of the Law No. 73 of 1973 setting forth the conditions and procedures of electing labor representatives to the board of directors of public sector units, joint stock companies, and private organizations and societies. On the other hand, the Articles of Association of the joint-stock companies, subject to the New Investment Law, shall indicate the manner of involving the employees in the Management of the company.
2.3. The New Investment Law is confirming that the Articles of the rights and the guarantees, provided at the Employment law, to the employees is the minimum rights and guarantees that should be afforded to the employees. In other words, Article 45 of the New Investment Law is in agreement to Article 5 of the Employment Law, which provides literally the following:
Any condition or agreement contracting the provisions of the present Laws shall be invalid even if it exists prior to enforcing the present Law, if it comprises a derogation of the employee rights prescribed therein.
All better benefits or conditions prescribed or to be prescribed in the individual or collective labor contracts, the articles of associations, or other regulations of the establishment, or ruling by virtue of usage and practice shall remain valid.
All composition comprising a derogation or discharge of the employee rights derived from the labor contract during its validity period, or within three months from the date of its expiry, shall be null and invalid once it violates the provisions of the present Law.
2.4 The provisions of the Social Insurance Law shall apply to the employees working in companies subject to the New Investment Law including the free zones companies.
2.5. The employees working in companies under the auspice of the New Investment Law shall continue to enjoy the right to 10% (ten percent) of the company profits. This employment right of the 10% ten percent) of the company profits is stipulated in paragraph (3) of Article (20) of Law No. 230 of 1989, Article 1 of the Employment Law, and Article 41 of the Companies Law no. 159 of 1981
Briefly, the New Investment Law guaranteed and confirmed the rights and privileges, mentioned at the Employment Law, to the Employees working at the Investment and free zone companies.
