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Employment Law Guide For Expats

Israeli labor legal code contains extensive protective legislation, providing minimal rights for every worker in Israel, local or foreign.

As stated in the Foreign Workers Law, the protective legislation in Israel applies equally to migrant and local workers. This includes the collective agreements and extension mandates. It is forbidden by law for an employer to discriminate against a migrant worker and deny him these rights.

The conditions that regulate employment relations are expressed in statute, case law, industry sector agreements, collective settlements, laws, extension orders, and written or oral contracts of employment.

 

1. Equality of Opportunities and Sexual Harassment

2. Termination of Employment, Prevention of Dismissal and Notice Period

3. Severance Payments

4. Working Time

5. Annual Vacation and Leave

6. Public Holidays

7. Sick and Maternity and Paternity Leave

8. Occupational Health and Safety

9. Rules and Implementation

10. Industrial Relations

11. Collective Agreements

12. Industrial Action

13. Special protection for Foreign Employees

14. Types of Contracts

15. Laws Relating To Employees

16. Taxes

17. Social Security Payment and Other Statutory Deductions

 

 

 

 Equality of Opportunities and Sexual Harassment

The discrimination of employees in the process of recruitment, during employment and upon termination is prohibited whether motivated by sex, religion or age. For example, equal opportunity requires that when placing an advertisement for potential candidates, an employer must include both sexes. Furthermore, sexual harassment of an employee is a criminal offence, and is subject to severe punishment with the possibility of imprisonment. 

In general, a contract of employment between an employee and his employer can be either in writing or oral. However, there are two exceptions to this rule, relating to employees employed by manpower contractors and expatriates/foreign employees. Case law dictates that the conditions of employment in manpower companies have to be in written form, or subject to a collective agreement defining conditions of employment according to the new law of regularization. Expatriate/foreign employees must have a written contract (in the language of the employee), which should include, among other details, salary details, working hours and social rights.

Employees employed by manpower contractors are considered equal to other regular employees in the same place of work. If a manpower employee is employed by the same employer for a period of more than nine months, the employee will be considered as employed by the employer. In such instances, the seniority of this employee will be counted from the moment they commence work for the plant or company, even though the employee was a manpower contractor’s employee at that time.

 

 Termination of Employment

Employment conditions that are subject to a collective agreement will be terminated by means of the annulment or expiration of the collective agreement. A collective settlement is terminated with the consent of the parties unless the settlement in question is unilateral and subject to change. A contract of employment comes to an end either due to the completion of a specified period or due to notice given by a party to the contract. The Prior Notice of Termination of Work Law states the obligation to give a letter of termination and notice in writing.

 

 Prevention of Dismissal

Employer-employee relations are considered as a contract for personal services and therefore will not be enforced unless the dismissal in question is illegal. Dismissals may be deemed illegal if the dismissal:

 

11.    Is the dismissal of a pregnant employee;

12.    Occurs in the public sector where the employee’s right to a hearing has not been granted and laws of natural justice have not been maintained;

13.    Is contrary to the dismissal conditions defined in a collective agreement;

14.    Is for political or politically-related reasons such as a union membership and activity

15.    Is of an employee who reveals  corruption;

16.    Is based on sexual or age discrimination;

In these and any other cases in which the relevant court decides that the employer did not fulfill his obligations, the employer may be forced to make a severance payment to the employee, and in some cases (especially in the public sector) to continue to employ the individual.

 

Notice Period

Employment that is subject to the terms of a collective agreement may be terminated in the event of a serious disciplinary violation or a breach of confidence by the employee, or in any other legally justified circumstance.

The statutory notice period is legally defined depending on the length of employment. A contract of employment may provide for payment in lieu of notice. The employee must also give the required notice to the employer.

 

 Severance Payments

An employee who is employed under an indefinite contract and whose employment is terminated without a bone fide cause is entitled to a severance payment of one month salary for each year of employment to be awarded by the relevant court.

An employee who is employed under a fixed-term contract is entitled to severance payments on condition that the agreement has lasted no less than 12 months.

An employee who voluntarily resigns will not be entitled to severance payments unless:

1.    The resignation was caused by a worsening economic situation such that it was impossible to continue work;

2.    The resignation was on account of the ill-health of the employee or a dependent family member;

3.    The resignation was due to a change of employers at the workplace;

4.    The resignation was due to moving to an agricultural settlement or developing town, enrolment in the army or the police corps or moving away 40 km due to marriage;

5.    The resignation by a male or female employee in order to take care of a newly born child provided the resignation is submitted within nine months of the birth.

6.    The contract of employment defines liability to pay severance in any case of dismissal or resignation.

7.    If it is common practice at the employee’s place of work for employees to receive severance payments.

8.    If severance pay is not paid on time, i.e. no later than 15 days after the termination of the employer-employee relationship, the employee is entitled to compensation for the delay.

9.    For up to 15 days’ delay: the severance pay will bear interest (indexation).

10. In certain cases, the rate of the benefits will exceed 20% of the delayed severance pay, for every delayed monthly payment, if the delay is unjustified.

 

 Working Time

 

Working Hours

The statutory maximum number of working hours is 45 hours a week. In places of work that are open five days a week, a work day normally consists of nine hours. Daily working hours may be extended to 10 hours per day; however, the weekly quota must not exceed 45 and, in certain sectors, must not exceed an average of 45 weekly hours over a three-week period.

If an employer wishes to deviate from the legally allowed number of days, they can only do so under the terms of a collective agreement concluded with the Histadrut (Workers’ Union) or under a special permit from the Minister of Labor. Flexible working hour systems are allowed, but they must be collectively bargained.

 

Overtime

An employee who works additional hours is entitled to payment of 125% for the first two additional hours for each working day and 150% for every following hour. If the employee is working a night shift (for at least two hours past 10pm), the employee is entitled to payment similar to overtime rates after regular hours.

 

Night Work

Night shift according to the law is eight hours. The law forbids pregnant women and minors under 18 from working at night. The law does not require supplying meals or transport, but it is very common under collective agreements to provide these two benefits. The law also regulates how many hours / nights an employee is permitted to work on a night shift.

 

Rest Periods

The employee is entitled to a weekly rest periods of 36 hours irrespective of whether the employee works a five or six day week.

The employee who works through the weekly rest period is entitled to an additional payment of up to 150% as well as compensation leave.

 

Annual Vacation and Leave

 

Vacation

There is a statutory provision which entitles an employee to paid annual vacation. The number of days generally increases with length of service. In the first two years, an employee who works six days a week is entitled to 14 days leave and an employee who works five days a week are entitled to 12 days leave. Leave days can be accumulated and carried forward for a maximum of two years.

On termination of employment, payment in lieu of leave is allowed. Public holidays are not considered vacation days for the purposes of annual leave entitlement. The common practice is to pay in lieu for the excess over the two years’ accumulation.

 

Vacation Allowance

Every employee in Israel is entitled to “vacation allowance” after 12 months of employment with the same employer. Under law, although each employer can count this benefit from the day the employee has started work with him, the common practice in Israel says that the “next in line” employer will take into consideration the seniority of the employee and will pay him according to the total years of employment. Maximum number of days: Private sector: 10 days, Public (Government) 13 days and organizations owned by the Histadrut (Union) 15 days. The number of days starts at five and increases every year by seniority until the maximum number is reached.

Payments: Private sector: ILS 307 per day, Public and Histadrut: ILS 347 per day (Update September 2010). There is no connection between payment and whether the employee actually goes on vacation. Companies usually pay this allowance during summer months (June-July-August in one to three payments) or spread over the year in 12 equal payments. Payments per day are up-dated every year. Claims can be backdated up to seven years.

 

 Public Holidays

In addition to vacation leave, employees are entitled to a full-day holiday. Public Holidays dates are determined under the Jewish calendar, and can differ year to year.

 

Public Holidays

Passover

Memorial Day -Yom Hazikaron

Israel Independence Day –

Yom Ha’Atzmaut

Shavuot

Remembrance Day - Tisha B’Av

New Year-Rosh Hashanah

Yom Kippur

Succot

Hanukah

 

 Maternity and Paternity Leave

Maternity leave is granted for three months (14 weeks), during which time the Social Security Institute pays the mother. The father is entitled to the leave if the mother returns to work earlier. The leave can be prolonged on an unpaid basis, depending on the length of service for the same employer. Mother and father cannot take Maternity leave together. The women have to provide evidence that the husband takes the maternity leave from his work place, and the vice versa.

 

Sick Leave

An employee may be absent due to sickness for a period that is equivalent to 1.5 days per month (full time employee) and not exceed a total of 90 accumulated days for any individual period of employment.

 

 Occupational Health and Safety

 

Measures of Occupational Health and Safety

 Health and safety practice and procedures in the workplace are regulated. Provisions include: the regulation of working conditions, safety limitations in the use of various materials, instructions on lighting and air-conditioning, instructions regarding the building in which the employee is working, and the particular conditions to be maintained for pregnant employees and employees who suffer from respiratory problems.

 

Minors

There is an arrangement for minors being employed legally for youth employment, regarding salary as well as the scope of work and also employment conditions.

 

 Rules and Implementation

There are several inspectorates responsible for enforcing the various health and safety rules. These units are responsible for inspection, consultation, and enforcement by means of onsite visits and the preparation of legal action against employers who violate their legal obligations.

 

 Industrial Relations

The parties involved in employment relations include the Histadrut, the State (as employer in the public sector), and the employers’ organizations (the chamber for coordination of economic organizations and the industrialists).

 

 Collective Agreements

Decisions reached are expressed in collective agreements, signed by all parties to the negotiations. Collective agreements may be reached on such issues as the cost of living bonus rate, travel to work allowances or payment of expenses. Collective agreements may also be reached on social conditions, such as pension rights, to be provided to employees.

 

 Industrial Action

 

Labor Courts

The Labor Court hears single suits, collective disputes and actions to verify the legality of strikes. The Labor Court is an assembly of a judge joined by representatives of both the employer and employee. They have the authority to enforce labor laws as well as collective agreements, settlements, personal contracts and extension orders.

In addition, Labor Courts enforce the health and safety laws.

 

 Special protection for Foreign Employees:

 In addition to the general protective legislation, foreign employees are also entitled to receive:

 1. Written contract of employment in the foreign employee’s native language.

 2. Adequate Housing.

 3. Health Insurance.

 Terms and conditions for these unique rights are listed in specific regulations.

 1·         Contract Of Employment

 The employment contract must include: salary details, working hours, vacation and sick leave rights, and a job description.

 

 Types of Contracts

 Part-Timers - These kinds of contracts are common within the public service and the government service where the employment is not standard. The contract is used for a defined purpose or assignment.

 

Duration of Contract

The duration of a contract varies according to the conditions of employment, collective agreement, collective settlement and contracts of employment.

Collective agreements may be limited in time or in perpetuity. Collective settlements are valid until a subsequent agreement or settlement is made.

Fixed-Term Contracts- A personal contract of employment may also be for an unlimited or specified period of time. A contract of limited duration should include a term specifying the period of the contract. A limited contract will be terminated at the end of the specified period, unless the parties consent to extend the contract. At least 90 days prior to the end of the contract. A limited time contract may be renewed for any period agreed to by the parties.

It is possible to employ someone for up to three years as temporary employee according to collective agreements.

 

Probation Period 

The probation period can last 1 month, 6 months or 12 months as determined by a collective agreement or individual contract of employment. During this period, the employee’s aptitude for the job is assessed. A probation period may be extended in accordance with any extension conditions stated in the relevant collective agreement or individual contract of employment. In the course of a probation period, the employment may be terminated by a period of notice as stated in the extension order regarding notice periods.

 

Invalid Contracts

Contracts that have immoral terms, conflict with public order, or put conditions on labor laws that do not allow limiting conditions are deemed invalid.

 Laws Relating To Employees:

General labour law in Israel relates to all types of employment in Israel:

1. Basic Law: Human Dignity And Liberty

2. Basic Law: Freedom Of Occupation

3. Collective Agreements Law

4. Employment Service Law

5. Employment Of Employee By Manpower Contractors Law

6. Hours Of Work And Rest Law

7. Sick Pay Law

 

9. (Absence Because Of Parents Sickness)

10. (Absence Because Of A Spouses Sickness)

11. Annual Leave Law

12. Employment Of Women Law

13. Male And Female Workers (Equal Pay) Law

14. Prevention Of Sexual Harassment Law

15. Wage Protection Law

16. Youth Labour Law

17. Apprenticeship Law

18. Discharged Soldiers (Reinstatement In Employment) Law

19. Settlement Of Labour Disputes Laws

20. Severance Pay Law

21. Protection Of Employees (Exposure Of Offences Of Unethical Conduct

And Improper Administration) Law

22. Encouragement Of Ethical Conduct In The Public Service Law

23. Labour Courts Law

24. Employment (Equal Opportunities) Law

25. Single Parent Family Law

26. Equal Rights Of Persons With Disabilities Law

27. Male And Female Workers (Equal Retirement Age) Law

28. Acquisition Of Undertakings By Employees (Special Cases) Law

29. Minimum Wage Law

30. Accidents & Occupational Diseases (Notification) Ordinance

31. Work Safety Ordinance (New Version)

32. Labour Inspection (Organization) Law

33. National Insurance Law (Consolidated Version)

 

Additional Laws Applicable To Foreign Nationals

1. Foreign Workers (Prohibition Of Unlawful Employment And Assurance Of

    Fair Conditions) Law + Regulations

2. Entry Into Israel Law + Regulations

3. Nationality Law + Regulation

4. Law Of Return

 

 Taxes

 

Income Tax

According to Israel's tax reform tax is levied on personal basis, therefore both Israelis and foreign nationals in certain cases pay tax on all sources of income, in Israel and abroad. Personal Income Tax (for both the employed and self-employed) is a progressive tax starting at 10% and increasing to a maximum of 45%.  Foreign nationals working in Israel under of B-1 work visa for experts may enjoy reduced tax rates.

 

 Social Security Payment

Employers who employ foreign residents in Israel must report on them to the National Insurance Institute (NII) and pay national insurance contributions for them. The NII coverage for foreign workers is correspondingly minimal, and it is mandatory for employers to arrange adequate medical insurance for foreign employers. The National Insurance Law (Consolidated Version) 1995 provides that a foreign resident worker is, among others, someone with a work visa B-1.

 

Other Statutory Deductions

Employer may deduct some of the expenses he made towards the foreign employee for housing and Health insurance. Deductions are very minimal and are regulated by the Foreign Employee Law and its regulations. The maximum amounts to be deducted are varying on the geographic location of the provided housing and being updated on a yearly basis.

 

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