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Client updates / Employment
In September, Israel's National Labor Court dismissed an appeal by the Café Noir restaurant and affirmed the Tel Aviv Regional Labor Court’s judgment, which held that the restaurant must pay NIS 300,000 compensation for infringing on its employees’ right to organize.
The Tel Aviv Regional Labor Court recently ruled that an employee who took advantage of her sick leave as vacation days immediately after being summoned to a termination hearing warranted being denied severance pay and early notice payments.
In a recent ruling, the Labor Court found that a short-term unapproved absence from work may constitute a disciplinary violation, and therefore be cause for termination, but cannot be seen as resignation.
The National Israeli Labor Court is an independent tribunal and thus only rarely does the High Court of Justice (HCJ) intervene in its decisions. Recently, in an unusual move, the HCJ twice reversed the rulings of the National Labor Court. In both cases as part of its policy to eliminate the phenomenon of workplace sexual harassment.
The Hellenic Data Protection Authority (HDPA) recently imposed a EUR 150,000 fine on the international consulting firm PwC for its violations of the new European data protection regulations (the General Data Protection Regulations, or GDPR).
A new ruling may affect due diligence employment findings and reclassify high-tech companies as companies operating in the industrial sector.
This news flash features information on the statutory day of rest during upcoming general elections for local authorities and regional councils in Israel and an update on the new amendment to the Prevention of Sexual Harassment Regulations.
The Israeli Minister of Labor, Haim Katz, has signed lately an extension order shortening the work week in Israel. According to the extension order, the work week will be shortened from 43 hours to 42 hours, without any reduction of pay.
In 2017, the Israel Tax Authority published a circular addressing the use of accumulated balances in central severance pay funds, and many employers began liquidating these severance pay funds. It is important to note that the liquidation of a central severance pay fund also has implications on labor relations with your employees.
At the end of October 2017, the Privacy Protection Authority published a guideline about the use of surveillance cameras in the workplace and within the framework of employment relations. This guideline does not come as a surprise, as a draft of it was already published last year for public comments.
The subject of discrimination in the labor market in general, and the subject of ageism in particular, has lately become a hot topic in the public discourse. A recent ruling handed down by the Regional Labor Court in Tel-Aviv in the Bat Sheva Simchi vs. Maabarot Products Ltd. case addressed the issue of age discrimination.
Three updates to employee rights (Minimum Wage – Annual Paid Leave – Pension) came into effect on July 2016. The following is important news about the next update to employee rights, which is expected to come into effect on 1.1.2017.
After about a year of uncertainty about the pension insurance allocation ratios according to Amendment number 12 to the Control of Financial Services (Provident Funds) Law of August 2015, the matter has recently been resolved.
On 21 October 2014, the Haifa District Court handed down its decision in “Yael Zor v the Tax Assessor Haifa” (12-01-19466) concerning temporary residency abroad.The case relates to a senior employee of a multinational enterprise the shipping company, Zim, who worked in Hong Kong for a subsidiary of the group from January 2006 to August 2008. The employee lived abroad for a period of less than 3 years and, afterwards, resumed tax residence - together with her family - again in Israel. When the employee returned to Israel, she filed an application for the refund of the taxes that her employer had continued to withhold on her salary during the period that she had lived in Hong Kong. The tax authorities denied the tax refund. Instead, they issued an assessment qualifying the taxpayer, during the years 2006 to 2008, as an “employee overseas” according to Section 67 A of the Income Tax Ordinance and its Regulations (“Earner of income derived from work performed outside Israel”) 5743-1987; and therefore they assessed tax on the income earned abroad. The tax authorities’ position has always been that the tax residency may only end when a person is outside of Israel for a period of at least 3 years. The Court decided in favour of the taxpayer and instructed the tax authorities to refund the tax withheld.The Court considered that the 2003 reform of the personal income tax made the determination of the residence of a taxpayer crucially important. The determination of tax residency based on the “place of the centre of life” demands a qualitative assessment besides the dry legal presumption of residency based on the number of days that a taxpayer is present in Israel in a given year and previous years. The presumption may be disproved by the taxpayer or by the tax authorities based on factual circumstances, reminded the Court. Consequently, the Court determined that even though the requirements for legal presumption of residency were met, the taxpayer successfully proved that she was not a resident of Israel. For this purpose, the Court took into account various factual considerations to determine the place of centre of life, such as:- that the taxpayer worked in Hong Kong;- the family had a bank account in Hong Kong;- the medical insurance covered the family members during their stay abroad and for this purpose it coverage was expressly extended;- the taxpayer’s children studied in Hong Kong;- the family lived in a rented apartment in Hong Kong which was entirely at their disposal; and- the family had sold their cars in Israel before moving abroad. The Court attributed also substantial weight to the subjective intentions of the taxpayer and her family measured by the fact that the husband had resigned from his employment in Israel for the purposes of the family’s relocation and that the couple's house in Israel had been rented out long term.