Labor Law

Week 5
 Partnership is a bilateral onerous contract made between two parties at least according to which each

of them “the partners” is obliged to present part of the money, assets or work to institute a project, with
the purpose to share the profits or the losses of the such project.

 So in partnership contracts the contribution of the partner may be only to do certain kind of work for

the benefit of the project such as administrating the company or administrating the technical
department in it.

 As between partners, they are not governed by employment law. Since, partners are not employees

and as a consequence they do not have employment rights or obliged by their obligations.

 As a general rule the payment here represents a share in profits if achieved. The general rule is that the

partner contributing with work will get a share in profits if achieved, but also can expressly agree to
grant him wage in addition to his profit share.
 In traditional partnerships, partners contributing with work tend to fall into one of

two groups, equity or salaried partners.

 A proper equity partner will be remunerated on the basis of the profits of the

partnership and may be released of sharing losses.

 By contrast, a salaried partner must share losses of the company

1- The obligation of the partner to work.

 According to the previous definition the partner will undertake to do some kind of

work for the benefit of the company as long as this project exists. This work may be to

perform a material work or conducting legal acts on behalf of the company.

 The obligation of the partner to work may be an obligation of result or means.

2- As a general rule payment represents a share in profits if achieved.

 The general rule is disregarding the period the partner works, he is not going to get

wage, instead he gets a share in profits if achieved.

 But partners may expressly agree to grant him wage in addition to his profit share.

3-As to sharing the other partners in loss:

 The partner contributing with work is the only partner who is permitted to be

deprived from sharing losses with other partners by an express agreement between

them, unless he is getting a wage in addition to his share in profits. In this case he

should hold his share of loss same as any other partner.

4- Fellowship between partners:

 The working partner is totally independent from other partners in performing the work

agreed upon in the contract.

 But at the same time not following instruction may raise his liability to compensate any

harm resulting from not following the instructions especially the technical instructions

as this could be considered as deviation of reasonable person conduct.

5-Freedom to withdraw from partnership:

 According to article 529 of the civil law “Partnership comes to an end by the retirement of one of

the partners when its duration has not been fixed, provided that such partner gives previous

notice to his other co-partners of his intention to retire and that his retirement is free of

fraudulent intent and not at an unsuitable time”.

 For example: if the demand on the company’s product is only limited to celebrations such as

New Year celebration. And the working partner is working as a manager or the head of

marketing department so his withdrawal should not be in the middle of one of these celebrations

time, otherwise he will compensate other partners of any loss sustained of his withdrawal.
All kind of partners are supposed to be independent of other partners’ supervision during
the execution of the contract, while the employee is always subject to the management
and supervision of his employer.

Wage is an element in labor contract, it could be a % of profits of sales as long as it will not
be less than the minimum wage. While the working partner will not take wage but a share
in the profit. Accordingly, if the company did not achieve profits, and if the partner is not
salaried (only takes part of profits and no fixed wage) he will not take any benefits.
3) Termination:
Finally, the partner has the legal right to terminate the unlimited partnership agreement-
provided that he withdraws in an appropriate time with a prior notice.
Note: the issue in person’s company; as a general rule the withdrawal of the working
partner will terminate the company unless agreed otherwise.
Similarity: Differences:
1) In both it is based on 1) Supervision:
work if the partner All kind of partners are supposed to be independent of other partners’ supervision
contribution in the during the execution of the contract, while the employee is always subject to the
company is work. management and supervision of his employer.

2) Wage:
Wage is an element in labor contract, while the working partner will not take wage
but take a share in profits unless agreed expressly on it as previously explained.
In both cases, either the partner by work is going to take wage or not. He should take
a share in profits gained be the company.

3) Termination:
Finally, the partner is not allowed to withdraw from the company at times other than
the appropriate time when withdrawal would result in the collapse and liquidation of
the company, he must also provide prior notice to other partners.
While in indefinite work contracts, the employee has the right to terminate the
contract at any time with a written prior notice sent to the employer. And the
employer has the same right on condition that the employee committed any of the
acts mentioned in article 69 of the labor law (dismissal).
The effects of the labor contract
 OBLIGATIONS IMPOSED ON THE EMPLOYEE

The obligations imposed on employee according to the Egyptian Labor law are:

 The obligation to perform the agreed work,

 The obligation to obey the employee instructions,

 The obligation not to disclose work secrets,

 The obligation not to compete, and

 Finally the obligation regarding the working inventions.

 Maria is a graphic designer employed by a marketing firm. Her contract specifies

that she is responsible for creating visual content for client campaigns. During a

critical project, she delegates her design tasks to a freelancer without notifying her

employer, believing it would enhance the final output.

 Did Maria violate her obligation to perform the agreed work?

A) The obligation to perform the agreed work.
 According to both civil and labor law the employee has the obligation to perform the work

assigned to him by himself.

 Because the labor contract is based on the personal consideration, as the worker must do

the work by himself and not to delegate it to someone else.

 This is considered an application of the general rules regarding the obligation to work, as

the work may not be carried out by others and against the will of the creditor. The

competence of the worker and even his personality are considered a basic and essential

factor in concluding the employment contract.

 However, the personal nature of the obligation is not related to public order, so it is

permissible to agree on what contradicts it explicitly or implicitly, so the employee may

agree with the employer to delegate his work to someone else or there is a custom that the

worker in certain work may delegate part of his work to someone else.

 An example of this custom: employee whose duty is to make the custom clearance of the

employer imported goods and transfer them to the employer stores has the right by Way of

custom to hire men to upload and down load goods on lorries to transfer them.
 This personal nature is what justifies considering the death of the worker as a

reason for the termination of the contract and the termination of the contract in the

event of a long illness in both civil and labor laws.

 As for the personality of the employer, it is not a matter of consideration in the

contract. So the employment contract is not terminated by the death of the

employer unless his personality was taken into account in concluding the contract.
 Also the employee has to do his work with accuracy and honesty, so if he is not

accurate and creating defective products, this in itself is a violation to his first and most

important obligation and it entitles the employer to impose penalty on him.

 But what is the level of the required accuracy and care by the employee?
 According to article 685/1 of the civil code “the worker must perform the work himself and

exercise the care that a normal person would exercise”.

 According to the civil law rules the worker has to exert the due care of reasonable man in

doing this work, which means he should not exert the care of beginner worker and should not

exert the care of a clever worker, it is enough to exert the care of in-between worker.
 The reasonable/usual worker is defined as a worker of the same level of skill as the

worker, who exerts the usual professional care.

 But this rule is a supplementary civil law rule, so parties can agree on otherwise.

 Does this agreement has to be explicit or it could be implicit?

 An example of implicit agreement is when the circumstances of the contract

implies that the employee is required to exert the duty of a careful man not only

reasonable man, this can be proven from the wage given to the employee if it’s a

high salary, on contrary if the worker is fresh graduate who gets a very low wage he

will be expected to exert care less than careful man.

 Also the worker has to do the same work defined in the work contract, also the employer is

obliged not to change the agreed work as already explained in the elements of labor contract.

 Also the worker has to perform the assigned work in the same place defined in the contract, this

place may be defined expressly or implicitly by stating that the worker is going to work in the

employee’s institution and the employee has only one institution so the place of work could be

easily deduced, in both cases the employer does not have the ability to change the place of work.

 But if the employer’s institution has more than one branch, then the place of work is undefined and

the employer may transfer the worker from one place to another according to the need of work.

 Finally the worker has to preserve the tools and machines of employer given to him to do the

agreed work.
 Does this mean if the place of work is defined In the contract, the
employer can’t change it?
 James works as a sales associate at a retail store. His manager instructs him to use a

new sales software to track inventory, but James refuses, believing the old system is
more effective. Instead, he continues using the old system, leading to inventory
discrepancies.

 What obligations did James breach by refusing to follow his manager's

instructions?

 Could his refusal justify disciplinary action or dismissal?

 Contract of work is mainly based on the relation of subordination between the

employer and his employee this is why the employee has a legal obligation stated in

article 56/ 2 “to obey the instructions of his employer”.

 This obligation will remain as long as these instructions are not contrary to their

contract, the law, public morality, or endangering the employer health.

 But what if the employee does not obey the employer’s instructions?

 He will be liable for the mere fact of non-obedience, since the non-obedience is a fault

that raises the employee’s liability.

 So if the employer did not obey the instruction he will be punished.

 But will this also apply if this non obedience led to profit to the employer?
 He will be liable for the mere fact of non-obedience even if such non obedience

lead to more profit or productivity.

 This is justified by the fact that obedience is a legal obligation to do certain result,

so the non-obedience itself is a fault that raises the liability of the employee

disregard its consequences.

 It is to be noted that only sever (repetitive) non obedience could by a reason for

dismissing the employment.

 1- The employee is obliged to do his work by him self unless otherwise agreed
expressly.

 2-The care and accuracy required by the employee is always the intermediate
person care.

 3- The mere fact of non obedience makes the employee eligible for punishment
and dismissing him.
 Lisa is an employee at a tech startup where she works on a proprietary software

project. After leaving the company, she shares details about the software's features

with a friend who works at a competing firm.

 Did Lisa violate her obligation to maintain confidentiality?

 How could the company protect its proprietary information more effectively in the

future?
 While article 56/9 of the Egyptian labor law also dealt with this obligation stating

that the employee should “maintain the secrets of work, and divulge no information

connected with the work once it is treated as confidential by nature or according to

the written instructions issued”.

 The employee has to keep the work industrial and commercial secrets either they

were secrets by its nature or according to the written instructions of the employer.

 This is one of the most important labor contract obligation imposed on employee.
 But what about keeping secrets after termination of work contract???

 Is it included in the previous obligation?

 This obligation is complemented by article 685/4 of the Egyptian civil code which stated the

employee’s obligation to “keep the industrial and commercial secrets of the work, even after

the end of the contract”.

 So the obligation of the employee to keep work secrets and not to disclose them to others stays

even after the termination of work contract as long as they remain secret.

 But does this obligation include the prevention of the employee from using these secrets for

himself after the termination of the work contract?

 This means that the employee has an obligation not to tell the others these secrets but this

obligation does not prevent him from using these secrets in his own business unless these

secrets represents a protected intellectual property product such as inventions.

What can the employer do to prevent the employee from using these secrets by himself after

the termination of work contract?

If the employer wants to prevent the employee from using work secrets for his own account ,

especially after the termination of work contract, he should stipulate this in the work contract.