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11.1 THE LABOR MARKET: DEMOGRAPHIC DATA
The active labor force is about
1,222,000, or slightly more than one third (34 percent)
of the resident population.
- 11.1.1 Age Demographics
The typical Lebanese male has a relatively long working
life. As many as 36.6 percent of the 15 to 19 age
group work and more than half, or 56.1 percent, of
the 65 to 69 year age bracket are still active. The
24- to 30-year-olds are the most economically active
age group.
- 11.1.2 Sectoral Distribution
of Employment
The breakdown of the labor force by sector reveals
the continued pre-eminence of the service sector in
business life. As much as 40.8 percent of the labor
force work within this sector, almost twice as much
as the trade sector, which employs 23.3 percent. Industry
follows, then construction and finally agriculture.
Unemployment estimates vary significantly from one
source to another. According to National Survey of
Living Conditions, unemployment was at 8.6 percent,
although a pronouncement by the Minister of Labor
in 2000 indicates it could be as high as 25 percent.
Business activity is concentrated in Beirut and its
suburbs. Taken together, the capital with its outlying
areas absorbs a large number of the labor force, except
for those working in agriculture or employed in the
armed forces. The city has a significantly higher
portion of the top administrative, executive, middle
management and teaching professions.
11.2 LABOR LAWS
The labor laws are intended to protect
the rights of the employee and that of the employer.
In 1963, a Social Security law came into effect, which
includes provisions for social benefits such as end-of-service
compensation, family allowance, sickness and maternity
benefits, and compensation for work-related accidents.
The legal framework also provided for a Labor Arbitration
Council, a judicial committee that resolves disputes
between employers and employees.
- 11.2.1 The Employee-Employer
Relationship
There are two classifications of employees under the
law. The first includes all professional workers who
hold office jobs, the second category is comprised
of manual laborers.
Employees have certain rights and responsibilities
under the law.
When an employee is first hired, he is placed on a
three-month probation.
When the trial period is over, the employer must pay
at least the equivalent of the minimum wage, which
is currently LL300,000 per month.
On leaving his/her employment, the person, for a limited
time, is prohibited from opening a business in direct
competition and with close proximity of his/her previous
employer.
- 11.2.2 The Work Contract
Every company with more than 15 employees should send
a copy of its working regulations to the Ministry
of Labor. The regulations must incorporate the labor
law guidelines.
There are certain basic principles that govern the
work contract, be it written or oral.
If a contract is a written document, then it should
be in Arabic. However, if the employer is a foreign
national and does not speak Arabic, then the contract
may be in another language.
- 11.2.4 Working hours
All employees are subject to the work hour guidelines
set by the labor law. An employer may demand a maximum
of 48 regular hours per week from his employees. Under
special circumstances, employers are permitted to
add extra hours to an employee's regular shift, but
this requires a permit from the Ministry of Labor.
- 11.2.5 Annual leave
Full time employees are entitled to 15 days paid vacation
at the end of their first year of employment. The
employee can accumulate two annual leaves.
- 11.2.6 Holidays
There are two compulsory public holidays on which
all employers must give their employees holiday with
pay: Labor Day (May 1) and Independence Day (November
22). In addition, there are 13 other government-recognized
holidays during which all public offices and most
businesses are closed.
- 11.2.7 Sick Leave
After the employee has been with his employer for
more than three months, he is entitled to a half-month
paid sick leave. If an employee's sick leave exceeds
the entitled annual amount, then the employer has
the right to deduct the extra days from the employee's
annual leave.
- 11.2.9 Bereavement leave
In addition to annual and sick leave, an employer
is required to provide his employees with two days
bereavement leave, to be used upon death of close
family members, including grandparents.
- 11.2.9 Firing
The employer and the employee can mutually agree to
break a written work contract at any time, then there
is no payment for damages or entitlements. However,
in situations where one party breaks the contract,
the injured party is entitled to seek compensation.
- 11.2.10 Misconduct
In situations where either party breaks the work contract
for reasons of misconduct, the party seeking compensation
must file a lawsuit no later than one month after
the violation. Firing an employee is considered misconduct
or abuse of power if the action is based on an unjust
or personal reason.
- 11.2.12 Financial Hardship
An employer is allowed to end commercial contracts
with his employees if he has a significant reason,
such as financial difficulties. However, the Ministry
of Labor must be informed of the move at least one
month prior to the employees being released.
11.3 THE NATIONAL SOCIAL SECURITY FUND (NSSF)
The National Social security Fund
(NSSF) was established by a 1963 decree. It provides
employees with national insurance coverage for sickness
and maternity care. It also covers family allowance,
end-of-service pension and work-related accidents and
diseases. Any employee or laborer from any sector is
eligible to enroll in the program.
To work in Lebanon, foreign employers need a valid work
permit and residence permit. In principle, foreigners
working in Lebanon are also entitled to join the NSSF,
provided their home country offers the equivalent or
better program to Lebanese residents who are working
there.
- 11.3.1 End of service
The employee can ask for end-of-service benefits at
any time even though the official retirement age in
Lebanon is 64. At the age of 60, an employee can ask
for early retirement and end-of-service compensation
provided he has completed 20 years of service.
- 11.3.2 Family, Transportation
and Education Allowance
Employees are also entitled to family, transportation,
and educational allowance. The benefits are attached
to the husband's rather than wives' salaries.
A married employee registered with the NSSF receives
a 20 percent spouse allowance and an additional 11
percent for every child (maximum five). The allowance
is calculated as a percentage of the minimum wage,
which is currently at LL300,000.
- 11.3.3 NSSF health benefits:
Once an employee is registered, the NSSF covers the
employee and his dependents in the following areas:
maternity, sickness and work-related accidents.
The employee is liable of 10 percent of all hospitalization
costs and 20 percent of medication and examination
expenses.
- 11.3.4 Compliance and the
NSSF debate
The law requires all companies to contribute to the
NSSF fund. Small companies with fewer than 10 employees
have to submit their report every three months.
Larger enterprises must submit their report monthly.
The amount ranges from LL100,000 to LL1.5 million
for each infringement, depending on the circumstances
of the case.
There has been much discussion in Parliament to cancel
all past obligations in order to encourage the private
sector to re-invest. There have also been calls to
reformat the fund and its management to better cope
with spiraling costs and the ever-increasing demand
for care.
11.4 UNIONS AND SYNDICATES:
- 11.4.1 Unions
There are five categories of labor unions in Lebanon.
The main one is the General Union, which includes
both professional and manual laborers and is the umbrella
organization of 28 local and professional unions.
- 11.4.2 Syndicates
All employees have the right to join a syndicate.
However, they cannot use it for political purposes.
A license from the Ministry of Labor is required to
establish a syndicate.
11.5 SALARY SCALES
- 11.5.1
Minimum Wage
The Ministry of Labor sets the minimum wage. Currently,
it is LL300.000. This benchmark is applied in both
the public and private sector.
11.6 WORK PERMITS FOR FOREIGNERS
- 11.6.1 Work Permits for Professional
Staff of Foreign Firms
Work permits for overseas nationals working for an
international company based in Lebanon are easy to
get. When applying for work in a Lebanese institution,
the labor law - as many other countries - imposes
many restrictions based on the premise that foreigners
should not be employed for tasks that can be carried
out by Lebanese, but in practice the Ministry of Labor
is relatively lax.
11.6.1.1 Proprietor (Managing
Director) Work Permit
A proprietor who wants to get a work permit must also
provide details about the company's business activity
and a copy of a bank statement showing operating capital
of at least LL100 million. . A foreign national must
have at least one local partner holding the majority
share to be eligible.
11.6.1.3 Managers, Branch Managers
and Chief Accountants of Overseas Firms
The manager, branch managers or chief accountants
of an overseas company registered in Lebanon need
the local company's commercial registration, which
is issued by the Ministry of Trade and Economy. They
also need a certified copy of the company by-laws
from company headquarters, as well as a letter of
appointment certified by the embassy in the country
of origin and then by the Lebanese Ministry of Interior.
- 11.6.2 Foreign Professional
Nationals Working for a Local Company
The country's labor law, like many others around the
world, stipulates that jobs should go, whenever possible,
to a Lebanese national. To hire a foreigner, the employer
must convince the ministry that there is no one locally
available who is equally qualified to perform the
work.
11.6.2.4 Restricted Professions
There are certain professions and positions that foreigners
are forbidden to work in while in Lebanon but, in
practice, the rule is loosely interpreted. This list
includes, but is not limited to, areas such as banking,
laboratories, pharmacies, and jewelry. Likewise, there
are several sectors in which the employer must be
a Lebanese national. They include, but are not limited
to, banking, architecture, engineering, shoemaking,
furniture manufacturing, printing, and accounting.
11.6.2.6 Cancellation
The Ministry of Labor reserves the right to cancel
any work permit at any time. Should the ministry discover
that any of the documentation used to obtain the permit
was falsified or incorrect, the permit will be immediately
withdrawn.
- 11.6.3 Household Help Work
Permit Procedures
Prior approval is needed before a maid or manservant
is allowed into the country. A mandatory payment of
LL1,500,000 must be made with the "Housing bank"
on behalf of the Ministry of Labor for every maid,
manservant or laborer. This is returnable after the
employee has left the country. The employer must also
take out an insurance policy covering hospitalization
and the cost of repatriating the worker to his country
of origin in case of a work-related accident or untimely-death.
- 11.6.4 Labor Work Permits:
Foreign laborers are predominantly employed in agriculture,
construction, or sundry physical jobs such as porters.
The Ministry of Labor asks the employing company or
farm to fill out an application form accompanied by
a work contract (original document).
11.7 RESIDENCY PERMITS
Once a foreign employee has
a work permit, he may apply for residency. More documents
are required for this application and it takes about
10 days to complete this phase. Like the work permit,
residency is granted on an annual basis.
11.8 RECRUITMENT AGENCIES
There are public and private
recruitment agencies in Lebanon. In instances where
a person has been unemployed for an extended period
of time, the agencies will often help retrain them in
fields for which there is greater demand.
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