What separates a contractor from an employee in Egypt?

Article 646 of the Egyptian Civil Code (Law No. 131 of 1948) defines a contract for work as an undertaking to make a thing or perform work in return for remuneration, with no element of subordination. Article 86 of the Labour Law issued by Law No. 14 of 2025 applies to a contract by which a worker undertakes to work for an employer under that employer's direction or supervision for a wage, so direction and supervision are the dividing line.

Can an Egyptian client cancel a contractor agreement early?

Article 663 of the Egyptian Civil Code allows the client to withdraw from the contract and stop performance at any time before completion. The same article requires the client to compensate the contractor for all expenses incurred, the work already performed and the profit it would have earned had the work been completed, and allows the court to reduce the lost-profit element where the circumstances make that just.

What is the risk of misclassifying an employee as a contractor in Egypt?

Article 88 of the Labour Law issued by Law No. 14 of 2025 treats a contract that is not in writing as an indefinite employment contract from the date it was made. Article 89 allows both the worker and the employer to prove the employment relationship, its duration and all the rights arising from it by every means of proof where there is no written contract.

Independent Contractor Agreement in Egypt

Egypt distinguishes the contract for work from employment on a single axis: whether the person works under the direction or supervision of the other party. The Civil Code treats a contractor as someone who undertakes to make a thing or perform work for remuneration, with no subordination element, while the Labour Law applies to work done under the employer's direction or supervision. The consequence of getting it wrong is severe, because an unwritten arrangement that is in substance employment is treated as an indefinite employment contract from the moment it was made.

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Governing law

An independent contractor engagement is a contract for work (muqawala) under Articles 646 to 667 of the Egyptian Civil Code (Law No. 131 of 1948). If the arrangement in fact involves working under the other party's direction or supervision for a wage, the Labour Law issued by Law No. 14 of 2025 applies instead.

Egyptian Civil Code (Law No. 131 of 1948), Art. 646 (Arabic text via WIPO Lex, consolidated to Law No. 55 of 1970)

What a independent contractor agreement has to contain in Egypt

A contract for work is one by which one contracting party undertakes to make a thing or to perform work in return for remuneration undertaken by the other party, with no requirement that the contractor work under the other party's direction.
Egyptian Civil Code (Law No. 131 of 1948), Art. 646
The employment chapter of the Labour Law applies where a worker undertakes to work for an employer under that employer's direction or supervision in return for a wage, which is the test a court will apply to a mislabelled contractor arrangement.
Labour Law issued by Law No. 14 of 2025, Art. 86 (Official Gazette No. 18 (bis), 3 May 2025, Arabic)
The contractor may undertake to supply only its labour, with the client supplying the materials, or to supply both the labour and the materials, and where it supplies the materials it is answerable for their quality and owes the client a warranty for them.
Egyptian Civil Code (Law No. 131 of 1948), Arts. 647 and 648
The contractor may entrust the whole or part of the work to a subcontractor unless a term of the contract prevents it or the nature of the work presumes reliance on the contractor's personal competence, and the contractor remains liable to the client for the subcontractor.
Egyptian Civil Code (Law No. 131 of 1948), Art. 661
The client may withdraw from the contract and stop performance at any time before completion, but must then compensate the contractor for all expenses incurred, the work performed and the profit it would have earned had it completed the work, subject to the court's power to reduce the lost-profit element where circumstances make that just.
Egyptian Civil Code (Law No. 131 of 1948), Art. 663
The contract for work ends on the contractor's death where its personal qualifications were a material consideration in the engagement.
Egyptian Civil Code (Law No. 131 of 1948), Art. 666

What catches drafters out

If the engagement is in substance employment and there is no written contract, the Labour Law treats it as an indefinite employment contract from the date it was made, and both sides may then prove the relationship, its duration and all rights arising from it by every means of proof.
Labour Law issued by Law No. 14 of 2025, Arts. 88 and 89
Subcontractors and the workers employed by the contractor on the job may claim directly against the client up to the amount the client owes the main contractor at the time the claim is brought, so a no-privity clause does not keep them away.
Egyptian Civil Code (Law No. 131 of 1948), Art. 662
The client's right to terminate for convenience under Article 663 carries a statutory compensation package that includes the contractor's lost profit, so a convenience-termination clause drafted without addressing that exposure does not reduce it.
Egyptian Civil Code (Law No. 131 of 1948), Art. 663