Two Judicial Rulings Order Al-Hanawy Factory to Pay EGP 420,000 in Compensation for Arbitrary Dismissal of Two Workers Over “Workforce Reduction Plan” Rejection
The Damanhour Primary Court has ruled that Al-Hennawy Tobacco and Molasses Company must compensate two female workers with a total of over EGP 420,000 for their arbitrary dismissal. The compensation includes severance pay and accrued leave entitlements, with a 4% legal interest applied from the ruling date until full settlement.
Under the judgment, worker “W. A.” was awarded EGP 180,500 for unfair dismissal, EGP 7,911 as severance pay, and EGP 81,682 for accrued leave. Similarly, worker “H. M.” was granted EGP 99,000 for unfair dismissal, EGP 5,797 as severance pay, and EGP 42,592 for accrued leave. The total awarded amount exceeds EGP 420,000, subject to a 4% legal interest from the date of the ruling until full payment.
The dispute arose when the company arbitrarily denied the two workers access to their workplace after they, along with their colleagues, opposed management’s decision to relocate operations from Damanhour to Borg El Arab. The relocation was perceived as an indirect measure to reduce the female workforce by making it logistically difficult for them to continue working.
Following their dismissal, the workers pursued legal action to claim their statutory rights, including compensation for unfair dismissal, entitlement to special allowances, minimum wage compliance, accrued leave, damages for loss of employment, and reinstatement.
During the proceedings, the workers’ legal representative, Mohamed Mamdouh El-Demiaty, from the Egyptian Center for Economic and Social Rights (ECESR), submitted a defense memorandum supported by official documents substantiating their claims. These included government decrees on the minimum wage, regulations governing special allowances, official complaints filed against the company for failing to implement labor laws, and a prior court ruling prohibiting the transfer of female workers to Borg El Arab.
The defense further contested the authenticity and relevance of documents presented by the company, which included a request for an exemption from minimum wage obligations submitted to the Federation of Egyptian Industries, leave records suggesting one of the workers had exhausted her entitlement, and a prior ruling by the Alexandria Primary Court in a separate case. The defense argued that the two cases were distinct and not comparable in subject matter.
Based on a report by the Damanhour Experts Office, which confirmed the workers’ financial entitlements, the court ruled in their favor. However, ECESR, while acknowledging the ruling as a positive step in upholding workers’ rights and ensuring corporate compliance with labor regulations, announced its intention to appeal the decision to seek compensation aligned with minimum wage standards.
ECESR is currently representing 29 female workers in legal proceedings challenging their dismissal on grounds of alleged absenteeism after they refused to accept the transfer to Borg El Arab.
The dispute at Al-Hennawy factory dates back over two decades, beginning in 2003, when workers protested against labor policies, including extended working hours, workforce reductions, and denial of childcare leave. Their rejection of a labor agreement—signed between the factory’s union committee and management—led to retaliatory measures, including dismissals and forced relocations aimed at pressuring them to resign. This pattern has persisted over the years, with each legal victory for the workers met with further retaliatory actions by the company.
For years, management has attempted to compel the female workers to transfer to its facility in the Fourth Industrial Zone in Borg El Arab, approximately 112 kilometers from Damanhour. The workers sought to have commuting time recognized as part of their working hours and requested transportation allowances, both of which were denied. Subsequently, they obtained court rulings affirming the illegality of their forced transfer.
In 2021, management reassigned the workers to an old warehouse as part of a broader strategy to shut down the Damanhour factory and coerce them into resignation. In response, the workers filed complaints with the Labor Office and official reports documenting these measures. In early 2023, management renewed its attempt to transfer them to the Borg El Arab factory. The workers, relying on prior court rulings, refused to comply. The company then proceeded to dismiss them all.
