Eastern Company suspends social insurance for workers in latest punitive action after union refused to sell shares

Six workers at the Eastern Company for tobacco manufacturing found that their social insurance files were closed last week without any formal notice of dismissal, two of the affected workers told Mada Masr. 

The six workers have faced punitive action from the company, including being barred from the company premises and suspended from work in the wake of the workers union refusing to sell its shares to an anonymous investor in February.

One of the workers said they visited the insurance office in 6th of October City to inquire about the termination and were told by a staff member that the file had been closed at the request of the company. When asked, the official refused to explain the company’s justification in defiance of the legal obligation for them to do so. 

MP Ehab Mansour, deputy chair of the parliamentary Labor Committee, told Mada Masr that barring the workers from company premises and then closing workers’ insurance files without their consent — and without their signing Form 6, the official government document used to terminate social insurance coverage — amounts to “forgery.” 

Under the executive regulations of the Social Insurance and Pensions Law 148/2019, an employer must submit a copy of the form signed by the worker in order to close their social insurance file, lawyer Yasser Saad, who specializes in labor law, confirmed to Mada Masr.

If the employee is absent or refuses to sign the form, and the employer proceeds with dismissal, the employer must notify the National Authority for Social Insurance within a week and provide a justification for the termination, Saad said. In such cases, the authority forms a committee to review the dispute and attempts to resolve it amicably. If either party rejects the committee’s decision, the matter may be referred to a labor court.

An employee can also request the file be closed by signing the form, and the employer is obligated to submit a copy of the signed document to the authority.

Mansour submitted an urgent inquiry on Monday to the prime minister, the public enterprises and labor ministers and the head of the National Authority for Social Insurance regarding the closures. 

The inquiry included complaints from members of the worker shareholders union’s general assembly, who accused the company of intimidating workers with threats of dismissal to pressure them into backing the sale of the union’s shares in the upcoming assembly meeting.

Mansour previously submitted a similar request in April, which was referred to the Manpower Committee and scheduled for discussion two weeks later, he said.

In February, during an extraordinary general assembly meeting of the workers shareholders union, company employees rejected a proposal to sell all union-held shares to a single, anonymous buyer  represented by EFG Hermes Promoting and Underwriting, at a price below market value.

They were later investigated on allegations of vandalism and disorder. Company management subsequently negotiated with them, offering to drop the investigations in exchange for halting their communication with the Financial Regulatory Authority regarding the legitimacy of the sale.

The workers shareholders union holds over 156 million shares in the Eastern Company — roughly 5.2 percent of the company’s total shares. The largest stake, 30 percent, is held by the UAE-based Global Investment, followed by the state-owned Chemical Industries Holding Company, which owns 20.95 percent.

A second vote on the same sale was held in April, but workers once more rejected the deal. Several workers told Mada Masr they believe the company used the investigations as a means to intimidate workers into approving the sale in the second meeting.

While the same workers were also barred from the company premises in May, bonus payments were suspended for 19 other workers for a six-month period at the time.

After being denied entry to the company premises, the affected workers filed a complaint with the labor office. The office informed them that it would refer the case to the labor court, after contacting the company, which declined to explain its actions and said it would present its justifications "in court," according to the workers.