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Denial of Severance pay?

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Joshua Pex

What are the circumstances for denying severance pay in Israel?

In which cases does an employee in Israel not receive severance pay? Do these cases allow for a denial of severance pay? When is an employee not entitled to severance pay at the end of his employment? Other articles on the Cohen, Decker, Pex and Brosh Law offices website detail the rights to severance pay in Israel. But when do the circumstances of employment termination or resignation not entitle an employee to severance pay? This article by Joshua Pex will briefly explain the relevant details of the Severance Pay Law.

The Obvious Reasons Why An Employee May Not Be Entitled To Severance Pay:

Denial of Severance Pay

In short, an employee in Israel is entitled to severance pay when he has worked in the same workplace for at least a year, and his employment is terminated involuntarily. It’s obvious at first glance that (usually), if an employee has worked in the workplace less than a full year and is fired before the end of the year, he is not entitled to compensation. Similarly, if the employee resigned of his own free will, he is generally not entitled to compensation. However, this is only the case provided that it is not stated otherwise in the employment agreement, as under a “Clause 14” contract. Beyond this, the employee is in any case entitled to the portion of the severance pay that was set aside for his pension.

Attempts By An Employer To Exploit Loopholes In The Law For The Purpose Of Denying Severance Pay

Some employers will see the above as an invitation to fire low-ranking employees just before the end of one year of employment. In the service industry, and elsewhere, the entire service staff is sometimes asked to “resign” once every 10 months, only to be re-hired. In these cases, the employee is not automatically entitled to severance pay, but a Labor Court may obtain documents proving that the employee has been employed at the same place for more than a year (such as pay slips) and rule in his favor in a lawsuit against the employer. In this case, the employee will receive the severance pay, and possibly even the lawsuit expenses. The same is true for seasonal workers who have worked at the same place more than a year in total. In certain cases, there is room for a class action lawsuit against the employer.

In general, the legislation in Israel considers the dismissal of an employee close to the end of a year of work as an attempt by the employer to avoid paying severance pay if a sufficient reason has not been given for the dismissal of the employee.

Circumstances For Denial Of Severance Pay Of A Dismissed Employee:

If a collective agreement is signed by the employee that states specific conditions under which the employee may be fired without severance pay, and one of these conditions is met, he will not receive severance pay. These conditions are usually the same conditions because a Labor Court may agree to an employer’s decision to deny severance pay to an employee who has been fired without having signed a collective agreement.

The conditions are mainly offenses that involve intentionally causing harm to the employer. These refer to a more serious matter than simple negligence or incompetence, including; a serious breach of discipline; causing intentional and/or malicious physical damage to the workplace and devices/materials within it; handing over secrets to competitors; working for competitors at the same time as for the employer; working elsewhere during vacation/sick days; or a serious criminal offense. When dismissal in these circumstances is considered “disgraceful”, the burden of proof is on the employer, and it is heavier than in ordinary civil law.

Considerations Of The Labor Court – Denial Of Severance Pay

In each specific case, the Labor Court judge considers whether the employer has a right to deny the employee severance pay or not. The considerations that guide the Labor Court are the functioning of the employee – that is, whether he worked well, for a long period of time, and without previous problems. On the other hand, the amount of harm to the employer, the degree of malice or criminal negligence on the part of the employee etc., are also considered by the court.

Have you resigned, intend to resign, or have been fired, and want to make sure that you receive the severance pay you deserve? Contact the Cohen, Decker, Pex and Brosh Law firm to receive legal advice and assistance.

Denial of Severance Pay

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