Egypt's Labour Law No. 14 of 2025 replaced a system where compensation was largely a matter of judicial discretion with clear statutory formulas.
Indefinite contracts
If the employer terminates an indefinite-term contract for an illegitimate reason, the employee has the right to claim compensation of not less than two months' wage for each year of service — Article 165.
The same figure applied under the old law, but the new law restates it clearly and changes the framing from "without justifiable cause" to "for illegitimate reason", with examples provided in the Law.
Fixed-term contracts
This is genuinely new. Under the old law there was no explicit provision regulating compensation for terminating a fixed-term contract, leaving it to judicial discretion — courts typically awarded the salary for the remaining term or actual damages under the Civil Code.
The new law provides: if a definite-term contract is terminated by the employer before its expiry, the employee is entitled to compensation equivalent to one month's salary for each year of service.
Non-disciplinary termination
For redundancy or business closure, employers must give prior written notice and pay fair compensation. The law provides a clear formula: two months' wages per year of service for employees terminated without misconduct.
The notice period
Three months for indefinite-term contracts, regardless of length of service.
Under the old law it was two months for under ten years' service and three months above that. Now it is uniform.
The employer may elect to pay compensation in lieu of notice.
The job-search entitlement
Worth knowing and easy to overlook. Article 162: if the notice of termination is given by the employer, the employee has the right to take one day off per week, or eight hours during the week, to search for another job.
That is a paid entitlement during your notice period.
Death in service
If the employee dies while in service, the employer must pay the family an amount equal to two months' wages based on the last wage received, to cover funeral expenses — Article 78.
Death of the employer
The contract does not terminate on the employer's death, unless it was concluded based on personal considerations relating to the employer — Article 169.