Egypt Labor Law No. 12 of 2003 (Articles 122 & 129)

Egypt Unfair Dismissal Compensation Calculator

Determine the mandatory statutory compensation due to an employee upon arbitrary or unjustified contract termination under Egyptian Labor Law No. 12 of 2003. Computes Article 122 statutory indemnity (minimum 2 months comprehensive wage per year of service), Article 129 notice compensation (2 to 3 months), and Article 47–49 accrued annual leave encashment.

Termination & Wage Parameters

Microsecond Engine
Preload Case Profiles:
EGP
Court of Cassation standard: All regular contractual remuneration elements.
Notice is 2 months (tenure < 10 years) or 3 months (tenure ≥ 10 years).
Compensated at standard rate: Daily wage = Monthly Comprehensive Wage ÷ 30.

Statutory Settlement Award

Legally Protected Minimum
Total Compensation & Terminal Dues Payable
EGP 138,000.00
Article 122 Indemnity + Article 129 Notice Pay + Leave Encashment
Article 122 Indemnity (2 Mo/Yr) EGP 108,000.00 9.00 months wage (4.50 yrs × 2)
Notice Pay (Article 129) EGP 24,000.00 2 months notice indemnity
Unused Leave Encashment EGP 6,000.00 15 days @ EGP 400.00/day
Calculated Tenure 4.50 Years 4 Years, 6 Months
Statutory Termination Settlement Breakdown
Statutory Component Legal Basis Calculation Rule Amount (EGP)
Unfair Dismissal Indemnity Article 122, Law 12/2003 4.50 yrs × 2 months × EGP 12,000 EGP 108,000.00
Notice Period Indemnity Article 129, Law 12/2003 2 months comprehensive wage EGP 24,000.00
Accrued Leave Encashment Articles 47 & 48, Law 12/2003 15 days × (EGP 12,000 ÷ 30) EGP 6,000.00
Total Legally Mandated Minimum Settlement EGP 138,000.00

Statutory Benchmark Matrix: Service Tenure vs. Unfair Dismissal Entitlements

The following benchmark table demonstrates legal minimum entitlements under Egyptian Labor Law No. 12 of 2003 across typical continuous service milestones, assuming immediate arbitrary termination without prior notice and 15 days of accrued unused leave, modeled on an average monthly comprehensive wage of EGP 12,000.

Service Tenure Article 122 Months Indemnity Amount (EGP) Notice Pay (Art. 129) Leave Pay (15 Days) Total Minimum Award (EGP) Statutory Multiplier
1 Year 2.0 Months EGP 24,000.00 EGP 24,000.00 (2 Mo) EGP 6,000.00 EGP 54,000.00 4.50× Monthly Wage
3 Years 6.0 Months EGP 72,000.00 EGP 24,000.00 (2 Mo) EGP 6,000.00 EGP 102,000.00 8.50× Monthly Wage
5 Years 10.0 Months EGP 120,000.00 EGP 24,000.00 (2 Mo) EGP 6,000.00 EGP 150,000.00 12.50× Monthly Wage
8 Years 16.0 Months EGP 192,000.00 EGP 24,000.00 (2 Mo) EGP 6,000.00 EGP 222,000.00 18.50× Monthly Wage
10 Years (Threshold) 20.0 Months EGP 240,000.00 EGP 36,000.00 (3 Mo) EGP 6,000.00 EGP 282,000.00 23.50× Monthly Wage
15 Years 30.0 Months EGP 360,000.00 EGP 36,000.00 (3 Mo) EGP 6,000.00 EGP 402,000.00 33.50× Monthly Wage
20 Years 40.0 Months EGP 480,000.00 EGP 36,000.00 (3 Mo) EGP 6,000.00 EGP 522,000.00 43.50× Monthly Wage

* Note: Under Article 129, once continuous service reaches or exceeds 10 full years, the mandatory statutory notice period automatically increases from 2 months to 3 months.

Statutory Framework & Judicial Principles: Egyptian Labor Law No. 12 of 2003

The Egyptian Labor Law guarantees strong protections against unlawful and arbitrary employment termination. When a commercial firm or individual employer unilaterally terminates a contract without statutory justification, the legal system enforces three distinct and cumulative compensatory pillars:

Complementary Egyptian Statutory & Payroll Calculators

Ensure comprehensive corporate payroll accuracy, severance alignment, and tax compliance across our verified Egyptian statutory calculators:

📊 Egyptian Tax Authority (ETA) & Social Insurance (NOSI) Matrix

Statutory Component / Legal Deduction Item Calculated Amount (EGP)
Primary Net / Statutory Payable Amount 0.00 EGP

Frequently Asked Questions (Egypt Unfair Dismissal Law)

What is the statutory compensation for unfair dismissal in Egypt under Article 122?

Under Article 122 of Egyptian Labor Law No. 12 of 2003, if an employer terminates an employment contract without a valid and legitimate reason, the worker is entitled to judicial compensation determined by the Labor Court, which cannot legally be less than two months of comprehensive gross wage for every completed year of service, plus pro-rata compensation for fractions of a year.

What is notice period pay under Article 129 of Egyptian Labor Law?

Article 129 stipulates that for indefinite contracts, the employer must provide written notice of termination: 2 months if the worker has completed up to 10 years of continuous service, and 3 months if continuous service exceeds 10 years. If the employer terminates the worker with immediate effect without serving this notice, the employer is legally obligated to pay a notice indemnity equal to the comprehensive wage for the entire 2 or 3 month period.

Is unfair dismissal compensation calculated on basic salary or comprehensive wage?

Under Egyptian Court of Cassation precedent and Labor Law provisions, unfair dismissal compensation under Article 122 is calculated on the Comprehensive Wage (الأجر الشامل), which includes the basic salary plus all regular, guaranteed allowances, transportation, housing allowances, and non-discretionary bonuses.

Can an employer terminate an employee without compensation in Egypt?

An employer can only terminate an employee without compensation under the strict statutory grounds listed in Article 69 of Labor Law No. 12 of 2003 (such negligence causing material damage, forgery of identity, disclosing trade secrets, being under the influence of intoxicants during work, assaulting supervisors, or repeated unauthorized absence exceeding statutory thresholds following formal written warnings). Even then, termination must be validated through the competent Labor Court.

Does the employee also receive end-of-service gratuity and leave encashment upon unfair dismissal?

Yes. In addition to Article 122 arbitrary dismissal indemnity and Article 129 notice pay, the employee retains full legal rights to accrued unused annual leave encashment under Articles 47–49 (calculated wage divided by 30 multiplied by unused days) and any applicable end-of-service gratuity under Article 126 or company collective agreements.

MS

Engr. Muhammad Shahzad

Verified System Auditor

Principal Hardware & Web Systems Engineer • Regulatory Compliance & Quantitative Systems

Specializing in statutory severance modeling, labor dispute mathematical audits, and Middle Eastern employment regulations. All computational parameters conform strictly to Egyptian Labor Law No. 12 of 2003, Court of Cassation precedent, and Ministry of Labor circulars.

Review Engineering Credentials & Audit Methodology →