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 EngineStatutory Settlement Award
Legally Protected Minimum| 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:
Article 122: Unfair Dismissal Minimum Floor
Article 122 provides that if either party terminates an employment contract without legitimate and sufficient cause, they must indemnify the other party for resulting harm. When termination originates from the employer, the Labor Court must award compensation that cannot be less than two months comprehensive wage for every year of completed service. This statutory minimum is mandatory; judges have discretion to increase the award based on moral or extraordinary material damages, but cannot decrease it below this floor.
Article 129: Mandatory Notice Indemnity
In indefinite contracts, lawful termination requires written advance notification. The statutory notice window is 2 months for workers with continuous service of under 10 years, and 3 months for workers whose service exceeds 10 years. If the employer dismisses the worker with immediate effect without serving this notice, the employer must remit notice pay equivalent to the full wage of the required notice timeframe.
Articles 47–49: Terminal Leave Encashment
Upon termination, the employer must settle all accrued, unused annual leave days in cash. Under longstanding Egyptian labor jurisprudence, the daily leave encashment rate is derived by dividing the monthly comprehensive wage by 30 days. No contractual forfeiture clause can extinguish this accrued right.
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| 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.