Third Ruling in a Month .. Court Orders El-Hennawy Factory to Pay EGP 232,000 in Compensation to Arbitrarily Dismissed Worker Opposing Workforce Reduction Plan
On January 26, 2025, the North Damanhour Primary Court ruled in favor of a worker against El-Hennawy Tobacco and Molasses Company, ordering the company to pay approximately EGP 232,000 in compensation for arbitrary dismissal. The awarded sum includes damages for arbitrary termination, compensation in lieu of notice, and accrued vacation entitlements, with a 4% statutory interest rate accruing from the date of judgment until full settlement.
Pursuant to the court’s ruling, the worker, identified as “M.M.,” was awarded EGP 155,000 as compensation for arbitrary dismissal, EGP 7,267 as notice pay, and EGP 69,581 for unused annual leave, in addition to legal costs and attorney’s fees.
This decision marks the third judgment within one month rendered against the company in favor of its dismissed workers. Previous rulings awarded two other female workers more than EGP 420,000 in similar claims, with the same interest provisions applied until full payment is rendered.
The dispute originated from the company’s unilateral decision to prevent certain workers from accessing the workplace after they opposed a proposed relocation of the factory from Damanhour to Borg El Arab. Despite a prior court injunction prohibiting the relocation, the company allegedly sought to reduce its workforce through forced transfers to a location exceeding 112 kilometers from the workers’ residences, thereby imposing undue hardship to coerce voluntary resignations.
Subsequent to their exclusion from work, the affected employees initiated legal proceedings, seeking redress for wrongful termination, entitlement to statutory allowances, enforcement of minimum wage obligations, compensation for accrued leave, and damages for loss of employment. They also sought reinstatement to their former positions.
During the proceedings, the workers’ legal counsel, Mohamed Mamdouh El-Damyaty of the Egyptian Center for Economic and Social Rights (ECESR), submitted documentary evidence substantiating the claims. This included official decrees on minimum wage compliance, regulations governing special allowances, official reports documenting the company’s non-compliance, and a final judgment from the Alexandria Court of Appeal invalidating the contested relocation.
The company’s defense presented various documents, including a request for exemption from minimum wage obligations filed with the Federation of Egyptian Industries, employee leave records asserting full utilization of vacation entitlements, and a prior ruling from the Alexandria Primary Court involving a comparable case. The workers’ counsel contested the relevance of the previous judgment, asserting that it pertained to a materially distinct dispute.
The court’s judgment was informed by findings from the Damanhour Experts Office, which confirmed the validity of the workers’ financial claims. The ECESR, while acknowledging the court’s recognition of the workers’ rights, noted that the awarded compensation did not fully account for minimum wage standards. The organization has expressed its intention to appeal the rulings, seeking enhanced compensation consistent with statutory wage requirements and mindful of the workers’ economic vulnerabilities.
The ECESR currently represents 29 female workers in ongoing litigation challenging their dismissals, which the company claims were due to unauthorized absenteeism linked to the contested relocation.
The underlying labor dispute has spanned over two decades, with the initial conflict dating back to 2003 when workers protested against inadequate allowances, increased working hours, workforce reductions, and the denial of childcare leave. Following their rejection of a collective agreement perceived as detrimental to their rights, management allegedly resorted to retaliatory measures, including dismissals and transfers to distant sites aimed at compelling resignations.
Since 2021, the company has intensified efforts to relocate the workforce to its Borg El Arab facility, situated over 112 kilometers from Damanhour. In response, workers demanded recognition of commuting time as working hours and sought transportation allowances—requests the company denied. Judicial authorities have consistently ruled against the legality of such relocations.
In early 2024, the company initiated another relocation attempt, which the workers opposed by invoking previous court decisions. The company subsequently terminated their employment, prompting the current series of legal claims.
