7000 workers suffer as a result of decision to close Egyptian Iron and Steel Factories

7000 workers suffer as a result of decision to close Egyptian Iron and Steel Factories

ImpACT International for Human Rights Policies followed with deep concern the resolution of the board of directors of the Egyptian Iron and Steel Company (EISC) to stop its work, without consulting its workers, in preparation for liquidating the company once an agreement on compensation is reached.

The London-based think tank said that liquidating the company will make about seven thousand workers jobless, with no source of income in light of the government's intransigence over the value of their compensation.

After more than 67 years of its establishment, the Egyptian Iron and Steel Company closed its doors on 30 May, in preparation for the liquidation of one of the oldest public sector companies in the country.

The procedures for closing the Helwan-based Iron and Steel factories began and the decision to liquidate the company was taken when it incurred losses estimated at more than seven billion EGP (450 million US dollars).

The deputy head of the Egyptian Workers' Union Khaled El Feki stated that "negotiations are currently underway with the Ministries of Public Business Sector and Manpower, regarding the value of compensation to the company's workers," who number at about 7000.

Kamal Abbas, a member of the trade union committee and a former worker in the company, stated that the workers reject the government's decision regarding the compensation and financial dues, reporting that they demand compensation ranging between 400,000 (25,470 US dollars) and 700,000 EGP (44,515 US dollars).

Liquidating the Egyptian Iron and Steel Company will make about seven thousand workers jobless, with no source of income

The Egyptian Iron and Steel Company (EISC) is a joint stock company. It is one of the largest iron and steel companies in Egypt and the first company of its sort in the Middle East. It was founded in 1954 by then-president Gamal Abdel-Nasser.

The company incurred huge losses and accumulated debts. Several managements rolled into the company, with none of them reported to be held accountable.

After a controversy between the company's management and the Ministry of Public Business Sector and the rejection of the proposal to divide the company, it was agreed, during the irregular general meeting last October, to separate the mines in an independent company.

On 11 January 2021, the company decided to liquidate the company’s factory in Al Tbin, then to form a committee to discuss workers’ compensation. Meanwhile, workers in the mining sector continued their work in the newly divided company.

ImpACT International for Human Rights Policies also calls on the Egyptian government to find a radical solution to address the crisis of the Iron and Steel Company workers, stressing that government negligence and poor planning should not be paid for by workers and their families.

It is the responsibility of the Egyptian government to quickly mitigate the grave effects on the future of the workers and their families, particularly in light of the absence of employment alternatives in today’s economy.

Egypt must fulfil its obligations under the Protection of Wages Convention ratified by its government in 1949, which mandates the payment of wages and the expansion of unemployment benefits to workers who suffer loss of earnings due to even a partial cut in hours.

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