A New Civil Service Law
On March 12, 2015, the new Civil Service Law[1] replaced the Civilian State Employees Law, which had regulated the affairs of State employees since 1978 (the "Law"). The new Law is one of the most important laws recently passed, as it comes amid a significant increase in the number of state employees in the last four years, as well as continuing attempts by the government to implement austerity policies, balance the budget deficit and reduce public expenditure in the form of employees’ salaries. The Law also seeks to improve and develop the administrative apparatus of the State, which in turn will affect the average citizen and the private sector. Finally, the Law regulates one of the highest-employing sectors, (estimates range from six to seven million employees), which will be directly affected by it.
With the exception of provisions related to finances (including wages and bonuses), which will be implemented starting July 1, 2015, the new Law will enter into force immediately. However, many of the finer details will only be implemented with the issuance of the law’s executive regulations, which will be issued within three months.
Scope of the Law
Article (2) of the Law determines that its scope extends to “ministries, government agencies, local government units, and public authorities; provided that there is no conflict with the laws or decrees organizing those entities”. It is notable that the new Law does not mention entities operating with special budgets, unlike the previous law (Law No 47/1978) which explicitly mentioned this category. Although there is no explicit exception for those entities in the new Law, the rewording of the scope of application article suggests that these entities will be exempted from the new Law’s ambit.
The Civil Service Law does not apply to public sector companies and public sector business companies, which is emphasized by the rulings of the Court of Cassation. Naturally, the Law doesn’t apply to private sector entities as well.
Appointment, evaluation, and termination of civil service
The new Law ensures that methods of appointment are more transparent as well as centralized; Article (13) stipulates that all vacancies for civilian jobs in the government be announced on the Egyptian government portal (as opposed to the practice of government entities announcing vacancies in the daily newspaper as stipulated by the 1978 law). It is a condition of the new Law that appointments shall be made on the basis of an examination, contrary to the old Law which allowed the competent authority to determine which jobs would be filled by examination and which would not.
| The new Civil Service Law introduces a different and more flexible early retirement system that commits government entities to accept requests of early retirement. |
The new Law states that senior management positions (which are the three job levels administratively placed below the head of the executive authority), and executive management positions, (which function right below the senior management), will be filled by a selection committee for a period of up to three years, which may be renewed for a single similar term. This is an important change as it means that the maximum period for positions of senior management is six years, which is fundamentally different from the previous law, which had not determined any limit. The exception to that rule is the authority given to the President to bypass this provision in cases where the position is deemed of a special nature. Furthermore, Article (10) sets out that the position of the Permanent First Undersecretary shall be selected for a term of four years, similarly renewable for one term.
Regarding termination, the new Civil Service Law introduces a different and more flexible early retirement system from the previous law, allowing retirement for those below the age of 55, provided that the employee has been enrolled in the social insurance program for at least 20 years and has been employed by the State for at least one year. Such employee will have the right to be promoted before early retirement, in order to be eligible for a higher pension. In this case, the employee’s pension will be calculated in accordance with the higher position, and the social insurance amounts owed to him will be paid after adding the value of an additional five years to it.
For those employees who have passed the age of 55 and whose participation in the social insurance system has exceeded twenty years, the new Law allows them to settle their social insurance claims, in addition to the lesser of the time period remaining until he/she reaches the age of pension (60 years) or five years.
In a significant departure from the old Law, the new Law commits the relevant government entity to accept requests of early retirement, regardless of whether the employee has reached age 55 or not.
| The Law does not explicitly organise several key issues, such as certain types of benefits, compensation and incentives, leaving these to be regulated by the Executive Regulations. |
To fully appreciate the impact and changes introduced by the new Law, it is useful here to explain the system of early retirement detailed in the 1978 law. Firstly, the old Law gave the competent entity the right to accept or reject the request of early retirement; in light of this, the new Law’s commitment to accepting such requests is perhaps the most fundamental change. Secondly, for those who did not exceed the age of 55, the old Law required that the reason for leaving the government position was to carry out a productive project that complies with specific requirements. Moreover, the employee in this case would not be entitled to more than a year’s bonus, in addition to two years that would be added to his/her pension period. As for those who exceeded the age of 55, the old Law gave the employee the right to settle their insurance claims, in addition to a maximum of two years.
Additionally, the new Civil Service Law repeals several other provisions related to termination of service, such as resignation, termination due to health-related reasons, and provisions regarding the financial repercussion of resignation. These will be detailed in the executive regulations expected within three months of the new Law’s entry into force. By referring these stipulations to the executive regulations, it means that the Prime Minister will have control over many of the details regarding termination of civil servants; this allows more flexibility, but also means that the executive branch will have a greater influence on those procedures.
Wages, Bonuses and Vacations
The issue of wages and bonuses of government employees is one of the most important and complex aspects regulated by the new Civil Service Law. In addition to the importance of wages for what it deducts from the annual state budget in general, government wages are characteristic for the large share of bonuses and incentives in comparison with the basic pay (40% in 2013/2014). The new Law renames wages to "career wages" (or basic wages), which is comprised of the regular wages plus the allowances prescribed in the law; and "additional pay" (or complementary wages) which is defined as the wage the employee earns apart from regular wages, and includes incentives and allowances. The Law also significantly amends the financial grading system, which can be seen in detail in the tables attached to it.
It is notable that the new Law does not explicitly organize several key issues, such as certain types of benefits, compensation and incentives, in contrast to the old Law. Article (40) stipulates that organization of these matters will be through decisions of the Prime Minister, taking into account the nature of each government entity and the performance of its employees.
One of the main positive amendments in the new Law is the increase in some benefits earned by employees, especially vulnerable groups. Despite the lack of a substantial modification in the terms and nature of the allowances, the new Law makes a significant positive shift by calculating allowances on the basis of percentage of the regular wage, rather than a hard figure as in the old Law. The new Law also acknowledges some of the positive social advantages, such as the adoption of a longer maternity leave (4 months), and other non-vacation related benefits, such as reserving some jobs for people with disabilities in addition to veterans and those wounded in security and military operations.
Conversely, the new Law has canceled some advantages provided for in the 1978 law. Article (50) stipulates, for example, that employees who have benefited from leave without pay cannot be promoted, and the duration of such leave will not be added onto the time required for promotion (except in the case of child care vacation). This differs significantly from the previous law, which had only stated that employees must return from their unpaid leave before being promoted and prohibited promotion for those employees who had taken four consecutive years of unpaid leave.
The Civil Service Council
The new Civil Service Law provides for the establishment of a Civil Service Council, which is an advisory organ that will submit proposals on improving the performance of the civil service and provide opinions on proposed projects and standards of government agencies, including the Central Agency for Organization and Management Evaluation. It is to be noted here that the formation of the new council may negatively impact the independence and impartiality expected with regards to advisory bodies, as the Law stipulates that the Chairmanship of the Civil Service Council will be held by the head of the Central Agency for Organization and Management, while the Board of Directors of the Council will include the head of the overall civil service. This structure conflicts with the standards desired for an independent advisory body.
Discipline and control
While most of the provisions relating to discipline and control remain the same as the 1978 law, the new Law allows direct supervisors some greater powers. For example, a direct supervisor may now discipline an employee by reducing his/her wages up to the equivalent of twenty days’ wages per annum (instead of fifteen days in the previous law), and may reduce the equivalent of fifteen days’ wages in a single instance (as opposed to three days previously).
One of the most contentious points in the draft law which was circulated before the adoption of the law is the role of the Administrative Control Authority, and whether its role would be reduced in comparison to the 1978 law. In the draft that was finally adopted, however, the new Civil Service Law provides exclusive jurisdiction to the Administrative Prosecution with regards to investigations into senior management positions and investigations into financial irregularities that would result in the loss of financial rights of the respective government entity.
Furthermore, the new Law stipulates that any entity conducting an investigation with one of its employees must cease such investigation if the Administrative Prosecution commences its own investigation into the same instance. It is noteworthy, however, that the new Law, in departing from the old 1978 Law, did not explicitly give the Administrative Prosecution the authority to investigate into violations related to the implementation of the general budget.
Conclusion
The simple fact that a new law has been issued to replace the 1978 Law is in itself an indicator that the government realizes the need for a significant and comprehensive reform and overhaul of its administrative arms. This comes after several attempts to implement partial changes through reforms to the 1978 Law. The new Law introduced several changes that may have a positive impact, such as imposing a cap on the number of years for high-ranking positions, requiring electronic tests for every vacancy, giving allowances in the form of percentages of regular wages, rather than outdated hard figures, and improving upon the benefits given to some vulnerable groups such as people with disabilities. Furthermore, the new Law did not shy away from directly addressing some controversial issues, such as the early retirement system, which was drastically developed to make it more amenable for employees wishing to make use of it.
On the other hand, the new Law left out many key issues unaddressed, such as the regulation of incentive payments and other forms of irregular payments which generally make up a significant portion of the wage of a civil servant. Other unaddressed issues were the financial repercussions of resignations or termination of employment for health reasons. This leaves a significant space to be filled by the Executive Regulations, without having clear directions from the new Law.
[1] Presidential Decree-Law 18/2005 enacting the Civil Service Law, Official Gazette, Issue No. 11 (cont.), 12 March 2015.
On March 12, 2015, the new Civil Service Law[1] replaced the Civilian State Employees Law, which had regulated the affairs of State employees since 1978 (the "Law"). The new Law is one of the most important laws recently passed, as it comes amid a significant increase in the number of state employees in the last four years, as well as continuing attempts by the government to implement austerity policies, balance the budget deficit and reduce public expenditure in the form of employees’ salaries. The Law also seeks to improve and develop the administrative apparatus of the State, which in turn will affect the average citizen and the private sector. Finally, the Law regulates one of the highest-employing sectors, (estimates range from six to seven million employees), which will be directly affected by it.
With the exception of provisions related to finances (including wages and bonuses), which will be implemented starting July 1, 2015, the new Law will enter into force immediately. However, many of the finer details will only be implemented with the issuance of the law’s executive regulations, which will be issued within three months.
Scope of the Law
Article (2) of the Law determines that its scope extends to “ministries, government agencies, local government units, and public authorities; provided that there is no conflict with the laws or decrees organizing those entities”. It is notable that the new Law does not mention entities operating with special budgets, unlike the previous law (Law No 47/1978) which explicitly mentioned this category. Although there is no explicit exception for those entities in the new Law, the rewording of the scope of application article suggests that these entities will be exempted from the new Law’s ambit.
The Civil Service Law does not apply to public sector companies and public sector business companies, which is emphasized by the rulings of the Court of Cassation. Naturally, the Law doesn’t apply to private sector entities as well.
Appointment, evaluation, and termination of civil service
The new Law ensures that methods of appointment are more transparent as well as centralized; Article (13) stipulates that all vacancies for civilian jobs in the government be announced on the Egyptian government portal (as opposed to the practice of government entities announcing vacancies in the daily newspaper as stipulated by the 1978 law). It is a condition of the new Law that appointments shall be made on the basis of an examination, contrary to the old Law which allowed the competent authority to determine which jobs would be filled by examination and which would not.
| The new Civil Service Law introduces a different and more flexible early retirement system that commits government entities to accept requests of early retirement. |
The new Law states that senior management positions (which are the three job levels administratively placed below the head of the executive authority), and executive management positions, (which function right below the senior management), will be filled by a selection committee for a period of up to three years, which may be renewed for a single similar term. This is an important change as it means that the maximum period for positions of senior management is six years, which is fundamentally different from the previous law, which had not determined any limit. The exception to that rule is the authority given to the President to bypass this provision in cases where the position is deemed of a special nature. Furthermore, Article (10) sets out that the position of the Permanent First Undersecretary shall be selected for a term of four years, similarly renewable for one term.
Regarding termination, the new Civil Service Law introduces a different and more flexible early retirement system from the previous law, allowing retirement for those below the age of 55, provided that the employee has been enrolled in the social insurance program for at least 20 years and has been employed by the State for at least one year. Such employee will have the right to be promoted before early retirement, in order to be eligible for a higher pension. In this case, the employee’s pension will be calculated in accordance with the higher position, and the social insurance amounts owed to him will be paid after adding the value of an additional five years to it.
For those employees who have passed the age of 55 and whose participation in the social insurance system has exceeded twenty years, the new Law allows them to settle their social insurance claims, in addition to the lesser of the time period remaining until he/she reaches the age of pension (60 years) or five years.
In a significant departure from the old Law, the new Law commits the relevant government entity to accept requests of early retirement, regardless of whether the employee has reached age 55 or not.
| The Law does not explicitly organise several key issues, such as certain types of benefits, compensation and incentives, leaving these to be regulated by the Executive Regulations. |
To fully appreciate the impact and changes introduced by the new Law, it is useful here to explain the system of early retirement detailed in the 1978 law. Firstly, the old Law gave the competent entity the right to accept or reject the request of early retirement; in light of this, the new Law’s commitment to accepting such requests is perhaps the most fundamental change. Secondly, for those who did not exceed the age of 55, the old Law required that the reason for leaving the government position was to carry out a productive project that complies with specific requirements. Moreover, the employee in this case would not be entitled to more than a year’s bonus, in addition to two years that would be added to his/her pension period. As for those who exceeded the age of 55, the old Law gave the employee the right to settle their insurance claims, in addition to a maximum of two years.
Additionally, the new Civil Service Law repeals several other provisions related to termination of service, such as resignation, termination due to health-related reasons, and provisions regarding the financial repercussion of resignation. These will be detailed in the executive regulations expected within three months of the new Law’s entry into force. By referring these stipulations to the executive regulations, it means that the Prime Minister will have control over many of the details regarding termination of civil servants; this allows more flexibility, but also means that the executive branch will have a greater influence on those procedures.
Wages, Bonuses and Vacations
The issue of wages and bonuses of government employees is one of the most important and complex aspects regulated by the new Civil Service Law. In addition to the importance of wages for what it deducts from the annual state budget in general, government wages are characteristic for the large share of bonuses and incentives in comparison with the basic pay (40% in 2013/2014). The new Law renames wages to "career wages" (or basic wages), which is comprised of the regular wages plus the allowances prescribed in the law; and "additional pay" (or complementary wages) which is defined as the wage the employee earns apart from regular wages, and includes incentives and allowances. The Law also significantly amends the financial grading system, which can be seen in detail in the tables attached to it.
It is notable that the new Law does not explicitly organize several key issues, such as certain types of benefits, compensation and incentives, in contrast to the old Law. Article (40) stipulates that organization of these matters will be through decisions of the Prime Minister, taking into account the nature of each government entity and the performance of its employees.
One of the main positive amendments in the new Law is the increase in some benefits earned by employees, especially vulnerable groups. Despite the lack of a substantial modification in the terms and nature of the allowances, the new Law makes a significant positive shift by calculating allowances on the basis of percentage of the regular wage, rather than a hard figure as in the old Law. The new Law also acknowledges some of the positive social advantages, such as the adoption of a longer maternity leave (4 months), and other non-vacation related benefits, such as reserving some jobs for people with disabilities in addition to veterans and those wounded in security and military operations.
Conversely, the new Law has canceled some advantages provided for in the 1978 law. Article (50) stipulates, for example, that employees who have benefited from leave without pay cannot be promoted, and the duration of such leave will not be added onto the time required for promotion (except in the case of child care vacation). This differs significantly from the previous law, which had only stated that employees must return from their unpaid leave before being promoted and prohibited promotion for those employees who had taken four consecutive years of unpaid leave.
The Civil Service Council
The new Civil Service Law provides for the establishment of a Civil Service Council, which is an advisory organ that will submit proposals on improving the performance of the civil service and provide opinions on proposed projects and standards of government agencies, including the Central Agency for Organization and Management Evaluation. It is to be noted here that the formation of the new council may negatively impact the independence and impartiality expected with regards to advisory bodies, as the Law stipulates that the Chairmanship of the Civil Service Council will be held by the head of the Central Agency for Organization and Management, while the Board of Directors of the Council will include the head of the overall civil service. This structure conflicts with the standards desired for an independent advisory body.
Discipline and control
While most of the provisions relating to discipline and control remain the same as the 1978 law, the new Law allows direct supervisors some greater powers. For example, a direct supervisor may now discipline an employee by reducing his/her wages up to the equivalent of twenty days’ wages per annum (instead of fifteen days in the previous law), and may reduce the equivalent of fifteen days’ wages in a single instance (as opposed to three days previously).
One of the most contentious points in the draft law which was circulated before the adoption of the law is the role of the Administrative Control Authority, and whether its role would be reduced in comparison to the 1978 law. In the draft that was finally adopted, however, the new Civil Service Law provides exclusive jurisdiction to the Administrative Prosecution with regards to investigations into senior management positions and investigations into financial irregularities that would result in the loss of financial rights of the respective government entity.
Furthermore, the new Law stipulates that any entity conducting an investigation with one of its employees must cease such investigation if the Administrative Prosecution commences its own investigation into the same instance. It is noteworthy, however, that the new Law, in departing from the old 1978 Law, did not explicitly give the Administrative Prosecution the authority to investigate into violations related to the implementation of the general budget.
Conclusion
The simple fact that a new law has been issued to replace the 1978 Law is in itself an indicator that the government realizes the need for a significant and comprehensive reform and overhaul of its administrative arms. This comes after several attempts to implement partial changes through reforms to the 1978 Law. The new Law introduced several changes that may have a positive impact, such as imposing a cap on the number of years for high-ranking positions, requiring electronic tests for every vacancy, giving allowances in the form of percentages of regular wages, rather than outdated hard figures, and improving upon the benefits given to some vulnerable groups such as people with disabilities. Furthermore, the new Law did not shy away from directly addressing some controversial issues, such as the early retirement system, which was drastically developed to make it more amenable for employees wishing to make use of it.
On the other hand, the new Law left out many key issues unaddressed, such as the regulation of incentive payments and other forms of irregular payments which generally make up a significant portion of the wage of a civil servant. Other unaddressed issues were the financial repercussions of resignations or termination of employment for health reasons. This leaves a significant space to be filled by the Executive Regulations, without having clear directions from the new Law.
[1] Presidential Decree-Law 18/2005 enacting the Civil Service Law, Official Gazette, Issue No. 11 (cont.), 12 March 2015.