The History of Israeli Law and How it Impacts Benefits

The History of Israeli Law and How it Impacts Benefits



Take One: You finally found the ideal job in the Holy Land!  You are so excited with the prospect of hitting it big, that you thought you would do without a written contract – after all, you don’t want to rock the boat!

Take Two: Your efforts have begun to pay off. Your business is up and running. You’ve hired new employees including a CEO, CTO and a CFO (and maybe a few other O’s), and something tells you that they’re going to be superb. Now you can sleep peacefully, share the responsibility with people you trust, and it seems that all that is left to do is for the founders to count the money. Can it really be that simple?

Take Three:  You are a venture capitalist considering investing in a young enterprise.  What should you insist on seeing in the company from an Israeli labor law perspective?

A relationship between an employer and an employee is no different than any other relationship – it begins with high aspirations.   An employment relationship creates legal obligations on both the employer and the employee which should be considered and evaluated before commitments are made and before the relationship is established.  You must comply with the minimum requirements of Israeli law which are likely significantly different that those in the Old Country.

Israel’s labor law system is a remnant of the country’s original socialistic character. The State of Israel was founded 70 years ago mainly by workers and peasants raised on socialistic principals; this philosophical approach was adopted by the Israeli legislature and incorporated into the legal system – at least with respect to labor laws and regulations.  The significance of the history of Israeli labor law is to be aware that the system is generally pro-employee as is the judicial system in this regard – knowing your rights and obligations is, however, crucial to enabling you to assert those rights and be aware as to when you should seek professional guidance.

Israeli labor law can be found in numerous laws, regulations issued by the government, circulars, instructions, orders issued by the Minister of Economy and Industry, particular or general agreements signed between employers and the Histadrut (Israeli employees organization) and expansion orders which apply them on an industry-wide basis or to all employees in the country and customary practices. All of these govern the relationships between employers and employees the failure to abide by which can have significant financial ramifications.

Among other things, employees generally must receive vacation and sick leave, time off during the day, commuting expense reimbursement, overtime pay for additional hours and severance pay under certain circumstances.  There are provisions which govern ownership of intellectual property generated by an employee.  There are Israeli Supreme Court rulings which pertain to non-competition provisions imposed by employers or accepted by employees.

This article is not to be considered as a legal opinion. For legal advice, we suggest you contact legal counsel directly. 

Russell D. Mayer is senior partner at the Jerusalem-based law firm of Livnat, Mayer & Co.

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