http://www.metimes.com/2K/issue2000-20/methaus.htm Business downturn drives labor to the streets Rasha Mehyar Middle East Times staff As the Egyptian economy experiences its first serious downturn in over a decade, the private sector is downsizing a labor force left exposed to the changing economic landscape. Companies owned by once high-flying flamboyant regime businessmen like Ghabbour, Guinedy and Ahmed Bahgat have recently made it to the headlines of the nation's opposition press for quietly letting go of hundreds of employees. But the phenomenon is also spreading to the small and medium-sized manufacturing sector. "Workers at Shanti Modern Plastics Industries [SMPI] came to us complaining that they had not received their salaries for the past six months and that they were forced to resign," said Yasser Farag, head of the Economic and Social program at the Egyptian Center for Human Rights (ECHR). Farag explained that when Osama Youssef Al Shanti, chairman of SMPI located in Tenth of Ramadan City, found himself unable to pay off bank loans and staff salaries, he fled the country, leaving behind 250 angry factory workers. Since then the workers have staged a two-month-long sit-in demanding their back pay. However, the plight of the SMPI staff is merely a microcosm of large-scale dismissals at factories in Egypt's new industrial cities. ECHR reported that the lack of funds to pay employee salaries has driven 15 factories to close their doors in the Sixth of October and Tenth of Ramadan industrial cities. Though Al Shanti fled the country leaving his problems behind, other employers are facing their troubles head on by downsizing their labor force by as much as 50 percent. "If I do not have the money to pay the salaries of the people who work for me, then why should they stay? I had no choice but to fire them," says Mounir Soliman, chairman of United Architecture Industries Establishment, a wood furniture manufacturer. Soliman's cash-flow problems forced him to dismiss 50 percent of his staff. "I produce furniture that does not sell on the market and as a result I am not getting a steady income that will allow me to pay my employees or to pay off my debt to the bank," he explained. As the downturn in the economy takes its toll on businesses around the country even multinational banks operating in Egypt are feeling the heat, with Barclays International asking 46 employees in the check clearance department to resign by May 27. "It's a shame, most of the employees who were forced to resign without getting the proper compensation are in their twenties and early thirties. All they were offered was a month's salary for every year of service," an anonymous source working at the Barclays branch in Alexandria told the Middle East Times. However, they were offered alternative employment at Middle East Company, a newly set-up check clearing firm. When it comes to dismissing employees, multinationals have a variety of weapons to choose from in their well-heeled techniques of labor exploitation. As Coca-Cola was about to relocate its bottling plant in the Cairo suburb of Doqqi last December, employees complained of alleged management harassment in the form of cutting telephone lines between the company and the outside world. After several sit-ins, the workers ended up getting the compensation of one month's salary for every year of service they were legally entitled to. Those employed with a clear compensation clause in their contracts become the real targets of the management's legal harassment techniques in case of dismissal. "Employers simply do not give workers annual raises due to them [in the clauses]. They also force them to take unpaid open-ended holidays," said a head hunter, speaking on condition of anonymity. Legal protection for workers against arbitrary management action is available in the form of Labor Law 137/1981. The law stipulates that employees can take their complaints to a tripartite consultative committee formed from the labor department, a business representative and a labor representative. The tripartite consultative committee would than pass a ruling on how the employee should be compensated in case of dismissal. When workers at a multinational chocolate manufacturer in Tenth of Ramadan City were forced to resign, they appealed to the tripartite committee. After hearing their case, the committee referred the issue to the court which awarded six months' salary to every employee. In this case, those employees, other than the 220 who promptly accepted the company's offer of paying the equivalent of a month's salary for every year of service, lost out as many of them had been in the company for many years. But even the law is no guarantor of workers' rights, leaving them exposed to the nation's shifting economic conditions. Article 71 of the Labor Law stipulates that businesses that experience economic difficulties can terminate the terms of the contract with their employees any time they wish without providing them with compensation. "As long as the word 'compensation' is not mentioned in the contract the employer can fire whenever he likes. The private sector is currently following that particular clause in the Labor Law. There is no strict definition of the kind of economic difficulty that the company could be passing through, therefore the contract can end at any time," Mustafa Muhammad Mustafa, a lawyer at Kamel law firm, lamented. -- Mine Aysen Doyran PhD Student Department of Political Science SUNY at Albany Nelson A. 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