Reconstitution of the National Council for Salaries – A Step towards Setting a Minimum Salary for Private Sector Employees
The National Council for Salaries (the “Council”) was first constituted in 2003 in accordance with Article (34) of the Egyptian Labor Law No. 12/2003. The Council is competent to determine the minimum salaries and the annual increments of private sector employees.
The Council however was inactive during the past years and never issued a decision in relation to the minimum salaries nor the annual increments. There has always been an intensive debate, particularly after the 2011 uprising in Egypt about the role of the Council and the reason beyond the delay in determining the minimum salaries.
Reconstitution of the Council
On 21 December 2020, the Prime Minister issued Decree No. 2659 (the “Decree”) to reconstitute the Council and elucidate its competencies.
In order to avoid the previous dormancy of the Council, the Decree mandates that the Council must be convened – at least – twice a year.
In the meantime, the Council is reconstituted to be chaired by the Minister of Planning and Economic Development and will include in its membership the following:
- Minister of Manpower.
- Minister of Finance.
- Minister of Supply and Internal Trade.
- Minister of Public Business Sector.
- Minister of Social Solidarity,
- Chairman of the National Council for Women.
- Chairman of the Central Agency for Public Mobilization and Statistics.
- Chairman of the Central Agency for Organization and Administration.
- Four economic and labor experts.
- Six members representing Employers Organizations.
- Six members representing the General Federation of Labor Unions.
Variation in Minimum Salaries Depending on Sector of Activity and Geographical Region
According to the Decree, the Council shall set the minimum salaries for private sector employees taking into consideration the cost of living and production levels in the country. The Council will revise the minimum salaries at the end of each financial year; taking into account the inflation rates.
For the first time, the Decree states that the minimum salary may vary from one city to another in light of the prices and standard of living therein. Also, the industrial and service activities may be taken into account.
This provision has been criticized by representatives of Labor Unions. According to them, adopting varied minimum salaries based on geographical grounds is discriminative.
In all cases, we believe that issuing the Decree indicates the government’s intention to activate the role of the Council as an introductory step on the road of setting minimum salaries in Egypt which is expected to take place during 2021.