Al-Ahram Weekly Online
17 - 23 January 2002
Issue No.569
Published in Cairo by AL-AHRAM established in 1875 Current issue | Previous issue | Site map

Dirge for a dog?

Activists and specialists furiously debate the proposed Unified Labour Law. But as Fatemah Farag finds out, on the shop-floor, it all seems much ado about nothing

Fatemah FaragHelmi: 25 years, gaunt eyes, pensive mouth, lanky arms -- and a greasy envelope full of papers he hopes will win him back the job he and seven of his colleagues had just lost. Not that his job at a Cairo fibre factory is much to shout about: ten hours a day in unsafe conditions, six to seven days a week, with no paid vacations. But Helmi, like thousands of entrants into the Egyptian job market, cannot afford to be choosy.

Helmi was laid off a few months ago, which was when I met him, in the course of a search for clues of what is like to be an Egyptian worker in an economy labelled, for over a decade, as "in transition".

Fidgeting with his papers, Helmi elaborated on the unfairness of it all. Before signing his work contract, he says, he was asked to sign the infamous "form number six," preemptively announcing his resignation. As if that were not enough, his contract also stipulates that he must pay the factory owner a punitive fine of $20,000 if he leaves his job.

Abdel Hady El-Gazzar's 1964 painting entitled The High Dam's Man: At that time, job protection, minimum wage and a network of social insurance and pro-labour laws incorporated the working class into the state-driven "socialist" experiment. Today, the development of a market economy is steadily eroding what remains of those times

"It is not like we had any choice," he pointed out defensively, his seven colleagues in the background nodding furiously, "I got my diploma and looked for work and could only find this. The work is hard but honest, and signing the forms was the only way to get taken on." He stops, almost breathless. "We were worked hard and I was willing to take it all. But then, one day, the owner of the factory picked a fight with a group of workers who were following the orders of one of the supervisors -- orders the owner did not approve of. And right then and there we found ourselves on the street," he recalled. Not only did the group of eight find themselves abruptly deprived of their livelihood, but their signature of form six meant they had no recourse to legal action that would at least afford them severance pay -- even though they had worked continuously at the factory for between five and ten years. The group was also haunted by the fear that the owner might use the contracts they signed to take them to court and ask for his dollars -- especially if they try and pursue their rights.

Never mind working conditions of the Industrial Revolution in England; think Egypt 2002.

It is workers such as Helmi -- workers in the new and expanding private sector -- that the draft Unified Labour Law is supposed primarily to benefit, or not. The draft, currently being revised by the People's Assembly's Labour Committee, was first developed in little over a year through tripartite negotiations between government, business (represented by the Egyptian Federation of Industries and Businessmen), and labour (represented by the General Federation of Trade Unions (GFTU)). The talks were all within the framework of an initiative financed by the International Labour Organisation (ILO). In December 1994, the first complete working draft was announced, and in January 1996 this draft was legally revised by the Legislation Department of the State Council.

Since then, repeated bouts of heated and, in many cases, scarcely comprehensible, dispute have erupted between the GFTU and business. Accusations have flown as each side tries to win concessions from the other while, throughout, the government never tired of asserting that it was on the side of the working class.

In November 2000, and during a joint session of the People's Assembly and the Shura Council, President Hosni Mubarak urged the government to submit the long-awaited bill to parliament. The word in 2002 is that the time has finally come for parliament to debate the 230- article draft. According to insiders, the version parliament will debate is, in content, exactly the same as the one looked at by the State council: five years ago.

The law, if passed, will apply to businesses currently governed by labour law 137 passed in 1981. Coverage, however, will exclude those in government administration, domestic workers, members of an employer's family, those in short-term employ (defined as work lasting less than six months), principal management positions and the self-employed. Workers in "pure" agriculture are also excluded from the conditions placed on the employment of women and minors.

"The exclusions are significant," says Kamal Abbas, labour activist and head of the Centre for Trade Union and Workers Services (CTUWS), headquartered in the working-class district of Helwan, "When you consider that a large proportion of working women are unskilled and work as domestic servants, then we are depriving a good number of working women from any protection. Quite an omission when you consider the recent case of actress Wafaa Mekki who brutally tortured her two servants. And how do you define "pure" agriculture? We all know that women and minors are used extensively in farming; why deprive them in particular from legal protection?"

Abbas notes also that the content of the proposed draft can be best assessed by seeing if it practically addresses the difficulties workers face on the shop floor. He feels it falls well short of that objective. "Over the past several years, a clear set of problems faced by workers has emerged. These workers, men and women, need to be protected from signing 'form six,' working over eight hours a day, secretive labour relations [in many cases workers are not allowed to keep a copy of their contract], the usurpation of the right to agreed wages and compensation in case of accident, lay-offs and/or closure. The proposed law solves none of these problems."

These and other problems reveal that the current law 137/1981, long criticised for its rigidity in protecting labour rights, has become no more than ink on paper. For some, this is an argument in favour of the new draft. It would be better, they maintain, to have a 'flexible' law that is applied that a rigid one that is not.

Many economists and, ironically, GFTU, also support the draft law as a solution to the twin problems of unemployment and investment. Their logic is that more flexible labour codes will encourage investment, which will create jobs. But Nader Fergani, head of the independent research centre Almishkat, argues that the law 137/1981 is "not the mass of unmitigated rigidities [in labour's favour] that it is claimed to be. For example, it prohibits strikes." Fergani is of the view that critics exaggerate the extent to which unemployment is caused by the supposed rigidity of the existing labour code. "[Introducing] more flexible labour codes as the solution for high unemployment is facile and misguided," he argues.

Fergani points to the findings of a 1994 World Bank study which ranked 22 impediments to profitability, in order of importance. For micro-enterprises, labour regulation came in a lowly 19th position. For small and medium enterprises it came 16th. Only for large enterprises was labour regulation a significant burden, where it ranked as the fifth greatest impediment to profitability. "The actual score is relatively high only for small and large enterprises," says Fergani. "Bearing in mind how few private firms count as small or large, (less than four per cent of enterprises), the overall weight of labour regulation as an impediment to profitability is low. By comparison a 'high level of tax' is considered the heaviest burden to all categories, with the exception of micro- enterprises where it is superseded only by lack of demand/customers."

Furthermore, the Land Centre for Human Rights, in a report on labour protests during the year 2000, cites a Shura Council report in which the following causes of wasted expenditure in industry were identified: 40 per cent from lack of services, 28 per cent due to the production of unmarketable goods, and 6.6 per cent due to poor maintenance and renovation. Only 3.7 per cent of wasted expenditures were labour-related.

"This draft law is simply about legalising all the infringements of worker's rights that have taken place in the past years," argues Abul-Ezz El-Hariri, a veteran labour activist and Tagammu MP for the Alexandria working class district of Karmuz. "At least now, even though labour codes are not implemented, there is some recourse to give and take. But if the draft is passed, workers will be deprived even of this small room to manoeuvre, at a time when the economic and social situation of Egypt has rendered labour at its weakest."

While some economists may argue that job destruction and creation are part of any dynamic capitalist market, for many on the ground it is job destruction that dominates their reality. According to the Ministry of Public Business, over 170,000 public sector workers have been released from their jobs on early retirement packages since 1996 and unemployment is estimated at around 17 per cent. In November 2001, Al- Ahram reported that 5,000 cases of bankruptcy came before the courts while over 500 factories were reportedly shut down in 2001 alone in the new industrial cities. A May 2001 report by the Land Centre for Human Rights recorded that in the second half of 2000, the Ministry of Labour and Manpower indicated that it received over 6,000 complaints from workers relating either to closure of the workplace or work conditions. Lastly, Fergani points out that "one of the most telling pieces of evidence is that labour's share of the national income has dropped from 44 per cent in 1975 to 25 per cent in 1995. Wealth has become polarised and in this situation the poor, in reality, do not count."

In such circumstances, El-Hariri argues that the fuss over restrictions put on the right to strike in the proposed law (workers must first notify the owner of the factory of their intention to strike and of the duration of that action and then obtain the approval of two-thirds of the General Federation) simply misses the point. "Yes, the law, in effect, makes it impossible to strike, but with most workers hardly making enough to eat, strike action is already restricted by their daily needs."

The CTUWS's Abbas explains further: "Who constitute the bulk of the private sector working class? Young, unskilled people, in many cases of rural background. For example, the workers of the industrial satellite city of 10th of Ramadan come from the villages and small towns of Sharqiya governorate, those in Sadat City come from those of Menoufiya, while most of those in Six October come from those of Fayyoum. While most have a diploma, or even higher degrees, they are given low-skilled jobs -- skills that can be learnt on the job, which means they are easy to replace. So neither their background nor the nature of their jobs makes it easy for them to resist unfair working conditions, no matter how harsh. On the other hand, the attitude of most businesses to labour is: 'These are my workers and I can do with them what I want'."

There is a new demographic element to the difficulties experienced by workers, too. Many cases that the Centre for Trade Union and Workers Services has seen in the past couple of years pertain to workers who were laid off after working at the same factory for over ten years. Abbas explains: "Once a worker is past his prime, his mid-thirties, factory owners are choosing to dispense with them. For the first time, we are getting 40-year-olds who are considered too old for employment and only in the best of cases do they enjoy minimal social insurance payment."

Moreover, Almishkat's Fergani underlines the dangerous ambiguity of some of the new draft law's articles, which invariably reveal an anti- labour bias. For example, "The employer is given the right to end an unlimited-term labour contract... on the grounds of significant breaches of obligation or efficiency (article 100 of the 1996)." Fergain explains, "In the opinion of some legal experts, this is one of the most dangerous articles in the proposed law. The vagueness of the criteria inherent in the article makes it liable to abuse by employers and increases the likelihood of litigation related to lay-offs."

Abbas comments, "Everyone is so pleased with having broken with the idea of 'job permanency'. But today, the problem faced by workers is that they can be turfed on to the street in a flash."

Some pundits say all these concerns are overstated. They say that allowances for collective bargaining will ensure fair contracts and better deals for labour. But who will do the negotiating? For many years, labour activists have pointed out that the current trade union structure (a single, state-controlled trade union for all workers) is obsolete. Opponents, though, are divided between those who call for the freedom to create more than one trade union, and those who want to overhaul, but keep, the single-trade union system.

In any case, the way workers were represented during negotiations for the law itself raises grave doubts about the ability of the GFTU to represent workers fairly. For example, Fergani claims, "It is no secret that the workers' representatives refused some proposed changes that would have given the labour unions a larger share of a fund created under the [proposed] labour law and to be shared between the Ministry of Manpower and the GFTU." He adds, "This is hardly surprising when the present chairman of the GFTU is likely to be the next Minister of Manpower. It is fair to conclude that, at least in relative terms, the workers' representatives failed those whom they are supposed to represent during the drafting of the proposed labour law."

Abbas said, "It is true that, on paper, labour was represented. But the current trade union structure has only a symbolic presence among private sector workers. And since [trade union officials] are the representatives of a public sector on its way to oblivion, how relevant is their representation to today's working class?" It is noteworthy that in 10 Ramadan, for example, only 17 factories have trade union committees -- out of over 1,000.

While senior GFTU officials are willing to admit off the record that they need to restructure and move into the private sector, no such moves have been made to date. Abbas argues, "The top echelons of the current trade union are not your typical trade union bureaucrats. Many of them are only a few months from retirement. All of them have been dissociated from their class for years. They have another agenda, another set of realities, to take into consideration; these are totally divorced from those of the class they allegedly represent."

As a result, many labour activists have turned away from the battle over the proposed unified labour law. Instead, they are calling for amendments to the trade union structure. The activists argue that even with the best of laws, without a strong trade union and working class movement, there is no way to ensure that the law is implemented.

"The fight should really be about the need for training and re-training the working class, finding solutions to unemployment, the role of both the Ministry of Labour and Immigration, as well as the trade union. Everyone keeps postponing [these questions] and focusing on the draft law. What is all the ado about? We all know that at the end of the day unless the fundamental issues are solved labour is in a bind -- new law or not," observes Abbas.

As the popular Egyptian saying goes "the funeral rages on, but the deceased is merely a dog."

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