Paying social allowance to private sector employees is preferable: FEI

The obligation cannot be effective due to the current economic circumstances and the difficulties that the industry sector faces recently, according to the FEI member

In mid-July, the Support Egypt Coalition, which represents the majority in parliament headed by member of parliament (MP) and Head of Federation of Egyptian Industries (FEI) Mohamed Al-Suwaidi, agreed with Minister of Manpower Mohamed Saafan to grant a social allowance to the employees of the private sector at a minimum of EGP 165 with a maximum of EGP 330, depending on the circumstances of each facility.
Since then, there was a debate regarding that allowance. Hence, the FEI assures that paying allowances to employees is an initiative and not an obligatory agreement.
The obligation condition requires a law to be approved by the parliament, and that this cannot be in the current period because of the end of the legislative term before the date of signature of the initiative.
The allowance should be paid starting from July to private sector employees, associations, non-governmental organisations, joint stock companies, private bodies, and private schools at 10% of the insurance pay, unless the internal system allows more, according to Al-Suwaidi.
From his part, Nadeem Elyas, a member of the FEI noted that those who talk about the commitment cannot be effective due to the current economic circumstances and the difficulties that the industry sector faces recently specifically after the liberalisation of currency, the rise in energy prices and interest rates, and others.
"However, Egypt's manufacturers decided to stand together and move forward. Of their social responsibility and their contribution to alleviating the burden on private sector workers in the light of the successive rises in the prices of goods and services, which accompanied the economic reform measures taken by the government recently, starting from floating the currency to raise subsidies on fuel and electricity," Elyas noted.
Ahmed Al-Wakil, the chairperson of the Federation of Egyptian Chambers of Commerce (FEDCOC), said that private sector employers are not obliged to respond to the initiative.
Al-Wakil added that the other condition is that the financial structures of the company allow the allowance to be paid and not affected, and there should be no losses for the company. He noted that the board of directors of the FEDCOC insisted that the allowance be paid without a minimum or maximum.