Damanhour Court of Appeal Upholds Ruling Ordering El-Hennawy Factory to Pay Over EGP 150,000 in Compensation for Arbitrary Dismissal

On 21 July 2025, the High Court of Appeal in Damanhour upheld a first-instance judgment issued by the Damanhour Primary Court in favor of the Egyptian Center for Economic and Social Rights (ECESR), in cooperation with El-Shawarby Law Office. The ruling obligates El-Hennawy Tobacco and Molasses Company to pay a female worker more than EGP 150,000 in compensation for arbitrary dismissal, in addition to payment in lieu of the notice period and accrued unused leave. The court further ordered statutory interest at a rate of 4% on these amounts, calculated from the date of judgment until full settlement.

The Primary Court had awarded the worker, H.M., EGP 99,000 in compensation for arbitrary dismissal, EGP 5,797 in lieu of notice, and EGP 42,592 for accrued unused leave, together with statutory interest at 4% from the date of judgment until payment in full.

The dispute arose after the company arbitrarily barred a number of female workers from entering the workplace when they refused a management decision to relocate operations from Damanhour to Borg El-Arab. The relocation was viewed as an attempt to downsize and dismiss the workforce by making it unreasonably difficult for them to commute to the new site, which is far from both their residences and original workplace.

Following their exclusion from work, the women initiated legal proceedings to claim their rights. Their demands included compensation for arbitrary dismissal, entitlement to special allowances, enforcement of the statutory minimum wage, payment for accrued leave, damages for loss of employment, and reinstatement to their jobs.

During the hearings, ECESR’s legal counsel, Mohamed Mamdouh El-Demiaty, submitted a defense memorandum supported by official documents substantiating the claims. These included government decrees on the minimum wage, regulations on special allowances, official inspection reports recording the company’s failure to comply with these decrees, and a prior court ruling prohibiting the transfer of the workers to Borg El-Arab.

Moreover, the defense contested the documents submitted by the company, which included a request to the Federation of Egyptian Industries seeking exemption from applying the minimum wage, leave records purporting to show the worker had exhausted her entitlement, and a previous judgment by Alexandria Primary Court in a similar matter—arguing that the cases differed in both facts and subject matter.

Relying on the report issued by the Damanhour Experts Office, which confirmed the worker’s entitlement to the financial claims, the court ruled in her favor. ECESR additionally requested that any compensation awarded be calculated in accordance with the minimum wage regulations; however, this request was not reflected in either judgment.

ECESR currently represents 29 female workers from the factory in lawsuits contesting their dismissal on grounds of alleged absenteeism, following their refusal to transfer to the Borg El-Arab industrial zone.

The dispute between El-Hennawy management and its female workers dates back over 21 years, beginning in 2003, when they demanded special allowances, opposed the extension of working hours, resisted workforce reductions, and objected to the denial of child-care leave. After rejecting a collective agreement signed between the union committee and the employer that they deemed detrimental to their rights, the company adopted a series of retaliatory measures, including dismissals and transfers to remote locations to pressure them into resigning. This pattern recurred repeatedly over the years, following each court ruling ordering their reinstatement.

In recent years, management has intensified efforts to compel the women to transfer to one of its factories in the Fourth Industrial Zone Extension in Borg El-Arab, located more than 112 kilometers from Damanhour. The workers requested that commuting time be counted as part of their working hours and that a transportation allowance be provided—requests which management rejected. The workers subsequently obtained court judgments confirming the unlawfulness of the transfers.

In 2021, management moved the women to an old warehouse as a step towards closing the Damanhour facility and pressuring them to resign. The workers lodged complaints with the Labor Office and filed official incident reports. Early last year, management again attempted to transfer them to Borg El-Arab, but the women relied on earlier court rulings to reject the move. The company ultimately proceeded to dismiss all of them.