What are the legal requirements for terminating an employment contract in Israel?

How to fire an employee in Israel? The labor laws in Israel are particularly strict. An employer cannot legally dismiss a worker without prior notice and due compensation (except for certain cases which allow the denial of compensation). The Israeli law firm of Cohen, Decker, Pex, Brosh, has extensive experience in Israeli labor law. In this article, attorney Joshua Pex will explain the rights of an employee who is about to be fired, such as: the right to a hearing; letter of termination; prior written notice; severance pay and vacation pay remuneration.

The right to a hearing before deciding to fire an employee in Israel

fire an employee in IsraelThe employer must give the worker a notice of summons to a hearing in advance, in order to allow the employee to properly prepare for his case.The notice should include the reasons for convening the hearing and the details of the complaints raised against the employee. The employee must be given adequate time to organize and prepare his arguments for the hearing. The employee can present the arguments himself, or with the help of a lawyer or other representative on his behalf.

During the hearing, the employer is required to present their issues with the worker openly and fairly, and has the duty to listen to the employee’s answers and to consider them seriously before making a final decision on whether or not to terminate the employment. The hearing will be held before the person authorized to decide in the matter of the termination – direct manager, the human resources department or a senior staff member. The employee may be accompanied by a representative on their behalf. The hearing’s minutes must be recorded and a reasoned decision should be made based on the arguments of both sides.

In the event of fundamental defects in the dismissal decision, a labor court may order the employer to make amends: return the worker to their position or provide monetary compensation for unlawful dismissal.

Advance notice by law before termination of employment

If, following the hearing, a decision is made to dismiss the employee, the employer must provide the employee with a written notice stating the date of on which the dismissal will take place. A worker who has worked for the employer for at least a year is entitled to receive the notice at least a month in advance of the dismissal. If the employer fails to provide advance notice, they will be required to provide the employee with compensation in an amount equal to the employee’s ordinary salary for the period for which no advance notice was given.

Letter of termination of employment

Upon dismissal, the employer must give his employee documentation regarding the commencement and termination of the labor relations. An employer who did not provide said letter within 14 days from the moment of dismissal or within 7 days from the date of the employee’s written demand, whichever is earlier, is liable to a monetary fine under section 61 (a) (1) of the Penal Law, 1977.

Severance pay

The Severance Pay Law provides that an employee who has worked for one employer or at the same place of work for at least a year is entitled to severance pay from the employer who fired him. It should be noted that an employer who decides to fire an employee in Israel close to the very end of the year may be deemed to have done so with the intention of avoiding the obligation to pay compensation. In that case, the employer is liable to pay severance compensation regardless.

The severance pay rate is one month’s salary for one year of work. If the employment contract determines the right to severance pay in excess of that determined by law, then it is calculated as specified in the contract. Calculation of the severance pay starts on the day of termination of employer-employee relations.

Section 9 (a) of the Severance Pay Law, 1963, determines that an employee under a contract for a fixed period shall be deemed to be an employee who has been fired if the contract expires and is not renewed.

Vacation days remuneration

Section 13 of the Annual Leave Law, 1951, provides that if an employee was fired before taking advantage of their accrued vacation days, the employer shall recompense the vacation pay to which they are legally entitled.

For one year of full time employment with one employer or at one place of work, the employee is entitled to a 16 day leave. The value of the vacation pay shall be the same as the employee’s regular salary.

Contact Cohen, Decker, Pex, Brosh’s branches in Petach Tikva and Jerusalem for legal information on labor law. If you were fired without getting your lawful rights or pay, or if you are employer seeking to ensure that you obey the law when you decide to fire an employee in Israel, we will be happy to assist.

fire an employee in Israel

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