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The Opinion of the Egyptian Legislator on Workers’ Rights in Cases of Unfair Dismissal and in Cases of Company Bankruptcy or Liquidation

Protection of Workers’ Rights under Egyptian Labor Law

The Egyptian legislator has taken clear measures to protect employees’ rights in the event of unfair dismissal, as well as in cases of company bankruptcy or liquidation.

▪️ Unfair Dismissal:

Employees who are unfairly dismissed have the right to claim compensation.
This compensation is calculated as two months’ salary for each year of service, in accordance with established labor law principles.

▪️ Company Liquidation:

In the case of company liquidation, and given the employee’s position as the weaker party, the legislator provides for compensation as follows:

One month’s salary for each of the first five years of service.

One and a half months’ salary for each subsequent year.

However, some court rulings have rejected compensation claims in liquidation cases, particularly where the company is bankrupt and lacks financial stability.
Courts have reasoned that partners or shareholders are not personally liable for the company’s profits or losses, and therefore are not obligated to pay employee compensation during liquidation.

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 Judicial Precedents

Examples of relevant court rulings include:

Denial of compensation for unfair dismissal where the employee committed gross misconduct.

Rejection of compensation in cases where the company is under liquidation.

Approval of compensation for unfair dismissal despite company liquidation.

Granting of compensation where the company was at fault in terminating the employee.