 Business Information : Employment
EMPLOYMENT
► The Labor market: Demographic data
The active labor force (working population aged between 15 and 64) is about 1.3 million, or around 36 percent of the resident population (3,627,774 according to World Bank July 2001 estimates).
Age Demographics
Typically, men begin working at a relatively young age and have a 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 – i.e. those beyond normal retirement age – are active. The 24-to-30-year-olds are the most economically active age group.
Sectoral Distribution of Employment
A breakdown of the labor force by sector perpetually shows the pre-eminence of the service sector. Figures vary according to the source. As many as 41-46 percent of the working population are employed in this sector, almost twice as much as the trade sector, which employs 23 percent. Industry follows, then construction, and finally agriculture.
Unemployment
Unemployment estimates vary significantly from one source to another. According to the National Survey of Living Conditions, unemployment was at 8.5 percent, although a pronouncement by the Ministry of Labor in 1999 indicated it could be as high as 25 percent.
A study by the National Employment Office (NEO) in 1997, in collaboration with the UNDP and International Labor Office (ILO), took a sample of 2,751 families and identified 4,019 people within those families as “unemployed”. Men between 50 and 65 are most likely to be out of work, followed by those between 20 and 24.
► Labor laws
The basic labor laws were enacted in 1946, and in 1963, a Social Security law came into effect, which includes provisions for benefits such as end-of-service compensation, family allowance, sickness, maternity, 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.
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/she 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 ($200) per month.
On leaving his/her employment, the person is prohibited for a fixed period from opening a business in direct competition and within close proximity of his/her previous employer.
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.
Working hours
All employees are subject to the 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.
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 leave periods.
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.
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, the employer has the right to deduct the extra days from the annual leave entitlement.
Bereavement leave
In addition to annual and sick leave, an employer is required to provide his employees with two days in cases of bereavement, to be used upon death of close family members, including grandparents.
Termination
The employer and the employee can mutually agree to break a written work contract at any time, in which case 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.
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.
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.
► 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 pensions, 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 valid work and residence permits. 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. In practice, it happens rarely.
End of service
The employee can ask for end-of-service benefits at any time even though the official retirement age is 64. At the age of 60, an employee can ask for early retirement and end-of-service compensation provided he/she has completed 20 years of service.
Family, Transportation and Education Allowance
Employees are also entitled to family, transportation, and educational allowances. The benefits are attached to the husbands’ rather than to the 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 ($200).
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 for 10 percent of all hospitalization costs and 20 percent of medication and examination expenses.
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 reports monthly.
Fines for infringement of these rules range from LL100,000 to LL1.5 million for each offense, depending on the circumstances of the case. Fines for subsequent offenses double. However, with a team of only 75 inspectors to cover the entire country, the chances of getting caught are slim.
The percentage of the workforce covered by NSSF contributions is also low. Statistics from the NSSF indicate that only 38,890 companies have registered with the organization, with 355,646 employees enrolled for health and maternity coverage. There are an estimated 160,000 functional companies and 1.3 million workers.
► unions and syndicates
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.
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.
► salary scales
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.
National Salary Scales
The National Living Conditions Survey conducted by the Central Administration of Statistics noted that in 1996-1997 the annual average national salary was LL10,512,000 ($6,975). Since each family has more than one contributing member (1.4 percent on average) the real income was LL15,241,000 ($10,106) per year.
► work permits for foreigners
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 in many other countries – appears to impose many restrictions, but in practice the Ministry of Labor is relatively lax.
Proprietor’s Work Permit
A proprietor who wants to get a work permit must provide details about the company’s business activity and a copy of a bank statement showing an operating capital of at least LL100 million. A foreign national must have at least one local partner holding the majority share.
Representatives of Overseas Firms
The managers, 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.
Executives of locally-registered overseas firms
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.
Restricted Professions
There are certain professions and positions that foreigners are forbidden to work in but 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 sectors. Notwithstanding, many banks employ foreign staff as very senior levels.
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.
Household Help Work Permit
Prior approval is needed before a maid or manservant is allowed into the country. A mandatory deposit 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 when the servant leaves 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.
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 the original work contract (not a copy).
► residency permits
Once a foreign employee has a work permit, he may apply for residency. More documents are required for the application and it takes about 10 days to complete this phase.
Like the work permit, residency is granted on an annual basis.
► recruitment agencies
There are public and private recruitment agencies in Lebanon. In instances where a person has been unemployed for an extended period, the agencies will often help retrain them in fields for which there is greater demand.
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2010
