Severance pay due to moving (legal information)
Are employees who resigned following a move to a new home eligible for severance pay? The law in Israel states that severance pay for relocation must be extended in certain conditions. The decision on the issue depends very much on the circumstances of the move. The law provides a list of criteria – if one or more of these apply, they may entitle an employee to severance pay. Below, attorney Joshua Pex, a partner in our firm and an expert in labor law, explains this issue and more in detail.
Naturally, most of us would prefer to live as close as possible to our workplace. Israel is indeed a fairly small country in terms of area, but as we know, the traffic jams on Israel’s roads and the non-ideal conditions (to say the least) of public transportation make it very difficult to get to work from distant locations. Life often forces us to change our place of residence, in a way that does not allow us to continue commuting to the workplace with the same level of convenience that was possible previously. In such cases, the question arises: does the fact that we had to resign from our previous workplace due to moving away establish an entitlement to severance pay? As we will see below, there are cases where this is indeed possible. But in order to fully answer the question, it is important to understand what the law stipulates on the subject.
Under what circumstances does the Severance Compensation Law recognize entitlement to compensation due to moving?
The Severance Compensation Law recognizes the right to severance compensation under certain conditions due to a move caused by marriage and moving residence to the place where the spouse lives. In this regard, the National Labor Court ruled in 2020 that this eligibility also applies to common-law couples. Also, the law establishes entitlement to compensation under certain conditions due to moving from a non-agricultural settlement to an agricultural settlement or to developing areas. Moreover, the severance compensation regulations establish a list of additional circumstances that entitle employees who resigned due to moving to receive severance pay. This list also includes moving due to certain changes in the spouses’ job or position, as well as moving as a result of divorce. Below we will detail the reasons and conditions stipulated in the law and regulations.
Which cases warrant compensation due to a move in the event of marriage?
Moving to the spouse’s home upon getting married, or living as a common-law couple, may establish eligibility for severance pay. The main conditions for this are that the couple’s home, to which the worker moved, is at least 40 km away from their previous home, and further from their place of work in relation to their previous home. Also, it is required that the employees live for 6 consecutive months in the new home, before they are entitled to severance pay on this basis.
Entitlement to severance pay due to moving to an agricultural settlement, developing area or Jewish settlement in Judea or Samaria
In the regulations, an agricultural settlement is defined as a moshav, kibbutz or a settlement where most of the residents are farmers. Those who moved from a non-agricultural settlement to a settlement that meets the definition of an agricultural settlement, may be entitled to severance pay upon resigning from their job due to the move. The regulations also extend the aforementioned entitlements to moving to a Jewish settlement in Judea or Samaria. Both in cases of moving to an agricultural settlement or Jewish settlement and in cases of moving to a developing area, the regulations establish an obligation to live in the new place for 6 consecutive months, as a condition for becoming eligibile for severance pay. The regulations establish a list of settlements that meet the definition of settlements in a developing area:
“Ofakim, Eilat, Beit She’an, Beit Shemesh, Dimona, Hazor, Yeruham, Karmiel, Migdal Ha’emek, Midreshet Sde-Boker, Mitzpe Ramon, Ma’alot-Tarshicha, Netivot, Nazareth-Illit, Arad, Safed, Kiryat Gat, Kiryat-Malachi, Kiryat Shmona, Sderot, Shlomi, Yokne’am-Ilit, Akko, Tiberias, Afula, Gilon, Atzmon, Yodfat, Ya’ad, Kornit, Shchenya, Moreshet, Manof, Merkaz Sapir, Yavniel, Kfar Vradim, Hila, Matat, Adar, Amekah, Tarshish, Camon, Mechmanim, Vered HaGalil, Areshet, Adi, Hararit, Pirchei Aviv, Zurit, Tal El, Klil, Katzir, Menachemiah, Metula, Migdal, Ramat Yishai, Rosh Pina, Kinneret (the colony), Kfar Tabor, Yesod HaMa’ala, Mesad, Mitzpe Netufa, Hispin, Eshchar, Har Halutz, Yuvalim, Ma’ale Tzvia, Rakefet, Horpish, Mitzpe Hoshaya, Givat Ela, Givat Avni, Alon HaGalil, Avtalion, Shorashim.”
Eligibility for severance pay due to a move caused by a spouse’s job change
The regulations stipulate a number of cases in which moving due to a change in a spouse’s position or work entitles a worker to severance pay. The main conditions in cases of moving due to a change in the spouse’s place of work are that the new home is at least 40 km away from the previous home and further from the employee’s place of work in relation to the previous place of work. Also, it is required to prove continuous residence of 6 months in the new home.
There are specific cases of moving due to a change in a spouse’s position or work, in which it will not be necessary to prove at least 6 months residence in the new home. These cases include moving due to a position in standing army service in the IDF or due to service in the Israel Police or the prison service, which involves moving to a home that is at least 40 km away from the previous home and further from the place of work than the previous home. The same goes for cases of spouses working in the civil service or in public services for which the government has confirmed that the regulations regarding severance pay due to moving apply, and the transfer of the unit where the spouse is employed to Jerusalem due to the government’s decision. In cases where the employee’s former home is at least 40 km away from Jerusalem, as a general rule, entitlement to severance pay will apply.
Moving abroad due to a spouse’s position as an emissary
Employees who moved their home abroad for a period of more than 6 months due to one of the spouses being an emissary in government service, the Jewish Agency, Jewish National Fund, Keren Hayesod or the World Zionist Organization, may be recognized for entitlement to severance pay. Eligibility will not be recognized in cases where the worker’s employer was prepared to grant them unpaid leave for the duration of the assignment. However, the employer’s refusal to approve unpaid leave in these cases will entitle the employee to severance pay, provided the other conditions listed above are met.
Severance pay due to a move resulting from divorce
In cases where employees moved due to a divorce to a home that is at least 40 km away from their previous home and for at least 6 months, they will generally be entitled to severance pay if they resigned from their previous job due to the move.
What are the conditions for exercising entitlement to severance pay due to moving?
Those who meet the above criteria are required to meet a number of additional conditions in order to be eligible for severance pay in these cases. First, employers must be given a resignation notice in advance, in writing, in accordance with the law. Also, documents must be presented that officially confirm residence in the new location (for example, confirmation of property tax payment, certification of issuance of a parking permit at the new home, rental agreement, apartment purchase agreement, etc.). In addition, compliance with the requirement for a home located 40 km from the previous place will be examined according to the official road distances determined by the Government Measurement Department. You can calculate the distances on the calculator on the National Insurance Institute website. Most importantly, the Labor Court ruling determined that the employees must prove that the resignation was due to a move, and that the move created a real difficulty in continuing to work at the previous workplace.
If the employees are indeed entitled to severance pay, the employers must pay the severance pay at the time of termination of the employee-employer relationship, or within 15 days at most. If more than 16 days have passed, the employers will be charged an index-linked increase for each day of delay. If more than 30 days have passed since that date, the employers may be obligated to pay delay compensation. All of the above applies only in cases where the law or regulations do not require a continuous residence of at least 6 months in the apartment to which the employees have moved. In these cases, the employers may require the employees to provide proof of residence for more than 6 months, as a condition for the payment of compensation.
Contact an attorney specializing in labor law
In this article, we have explained in detail the eligibility for severance pay in cases where employees were forced to move. As we have shown above, this is a complex subject that depends on different variables, and therefore disputes may often arise between employees and employers regarding exercising the eligibility. If you have any questions or need assistance on this matter, you can contact our office and we will be glad to help. The attorneys from our office, in Jerusalem and Tel Aviv, specialize in labor law and representing employees in procedures to exercise their rights. You can contact our office at the phone numbers and email address listed below.
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