For initial consultation
רקע

Labor Law severance pay – Dismissal

Home » Practice areas » Labor Law severance pay – Dismissal

In the State of Israel, anyone who has worked continuously for at least one year, and then has been fired or resigned in certain circumstances, is entitled to receive severance pay.

Who is entitled to dismissal severance pay?

Besides working at least one consecutive year in one workplace, employees are entitled to receive dismissal severance pay in various other situations, such as: (partial list)

  • When an employee is fired after 11 months of work, the employer must prove in a labor court that these dismissals were not done in order to evade paying compensation.
  • Continuity of work infringed for reserve service, illness or accident, days of absence, strike, annual leave or departure for an employer-approved off-period.
  • An employer who went bankrupt or died.
  • A seasonal employee who was fired after working two consecutive seasons.
  • An employee who resigned to care for her baby, and it has not been nine months since she was born.
  • Resignation due to the health of the employee or his family member.
  • An employee who resigned for changing his spouse’s place of residence or moving from an urban settlement to an agricultural settlement.
  • An employee who quit after retirement age.
  • An employee who resigned because of worsening working conditions.
  • An employee who resigned to serve as head of or deputy of for local authority.
הרעת תנאי עבודה

Bankruptcy, the demise of an employer or employee

In situations where an employer has gone bankrupt or died, employees are entitled to receive severance pay. If an employee dies, his employer is obligated to pay severance pay to his relatives as detailed in the law, and the manner of payment will be determined in accordance with the ruling of the Labor Court.

Dismissal notice how long in advance?

The law states that when the employer decides to fire an employee, he must notify him in writing. This type of advance notice is called a dismissal message. The time between giving the pre-notice and actually entering into force of dismissal is up to one month, unless otherwise stated in the employee’s employment agreement. The duration of this time depends and changes according to two main components – the way the employee is employed (monthly, daily or hourly wages) and the seniority in his workplace. The pre-notification time is not calculated in the count of working days, but in the count of “regular” days.

Pre-dismissal hearing – how long?

According to the rulings of the labor courts, an employee cannot be fired before being given the fair and proper opportunity to make his case against the intention to fire him. In order for a hearing to be considered fair and according to the law, there are a number of requirements that must be met, among them the granting of the summons to a written hearing, a reasonable period of time before the hearing process (approximately five days to a week before the hearing), in order to allow the employee to review all the full documents and reasoning on which the employer relies, including specific facts and events indicated in the letter of invitation to the hearing, or, alternatively, should be provided to the employee according to his request.

After the hearing – how soon do you receive a letter of dismissal?

After the hearing is held, if a dismissal is decided, this decision will be given to the employee. The obligation of the employer is to provide the fired employee with the dismissal decision, which is explained in writing, and relates to the main points of the claims made by the employee during the hearing.

Payment of severance pay – what is the duration?

According to the provisions of the law, an employer is obligated to transfer severance pay within a period of up to 15 days from the end of the employer-employee relationship between the two parties. In practice, we can tell you that despite the law, in practice, severance pay is usually paid, on average between 45 days and 60 days from the end of the working relationship, mainly due to circumstances that are not related to the employer (for example, the slow conduct of the insurance company that manages the pension security fund of the fired employee).

When can I go back to work after a layoff?

An employee is entitled to withdraw his severance pay funds while receiving an exemption from income tax up to a certain amount (this year, to a parable, the amount, is 12,420 NIS). Legally, Israeli law does not prevent the employer from returning to regular work after dismissal or resignation under a fired law. However, in cases where the employee is returned to work within a period of less than 6 months from the date of dismissal, the tax authorities may revoke the income tax exemption given for some of the ongoing compensation. In cases where the employee returns to work for the same employer after this period, he returns there as a “new” employee, and therefore, his work experience resets and begins to be re-counted.

How do I calculate severance pay?

When calculating severance pay, the following salary components will be considered – basic wages and various additions, such as seniority, cost of living, family and departmental and professional additions. In cases where the employee’s salary consists of base salary + fees, the salary for severance pay will be calculated according to the last base salary + average of the fees relating to the 12 months preceding the dismissal.

What’s the difference between a letter of dismissal and a stop-work letter?

The essence of the written document is determined by its contents and not by alias. A letter of dismissal indicates that the employee is fired at the employer’s initiative, while the stop-work letter indicates that the worker has completed his work in a particular place but does not specify on the initiative of who the termination of the work came to. Such a letter may also be interpreted as a letter confirming the employee’s resignation on his own initiative, and therefore, when such a letter is necessary for the purpose of receiving unemployment benefits and the employee’s eligibility for dismissal compensation, it is necessary to be very specific and demand that the document explicitly include a declaration that the termination of the labor relations came at the employer’s initiative.