With the new labour law coming into effect on February 2, the old gratuity calculation scheme shall apply to private sector employees under unlimited contracts until their contracts are renewed to limited within the coming year, legal experts have said.
Article 68 of the new labour law stipulates that the law enforcement grants employers one year to change employment contracts from unlimited to limited.
Until then, employees under unlimited contracts will have their end of service gratuity calculated per the scheme mentioned in the old Labour Law No. 8 of 1980. The provisions of the new labour law shall apply to their renewed limited contracts moving forward.
Mohamed Gamal Tawfik, legal adviser at Kaden Boriss Legal Consulting, said the end of service gratuity for full-time employees in the private sector has not changed under the new labour law, except for those under unlimited contracts.
Similar to the old law, Article 51 of the new labour law stipulates that an employee who has completed one year or more of continuous service is entitled to end of service gratuity of 21 calendar days’ basic pay for each year of the first five years of service; and 30 calendar days’ basic pay for each subsequent year of service, provided that the entire total remuneration does not exceed two years pay.
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