Dismissal in Israel

Israel’s labor laws protect employees and their rights for a fair dismissal, list a variety of reasons for which an employee cannot be fired, and guarantee them relatively high dismissal compensation. 

Here are a few must-read basics on Israeli dismissal regulation:

Dismissal Notice

Employers wishing to dismiss an employee are required to give written notice. From the time the notice is given until the termination of employment, the employer must grant employees the same working conditions they were entitled to before. The obligation to give notice also applies when dismissing due to a change of ownership of the employing company, if the employee continues to work with the new employer.

The length of the notice period depends on the employees’ length of employment.  After a year of employment, they are entitled to one month’s notice. Employees who have completed less than one working year are entitled to 1 day of advance notice for each of the first 6 months of work, and two and a half days for each additional month.

If a longer notice period is stipulated in the employment agreement, the agreement must be followed. The employer must not force an employee to take vacation days during the advance notice period.

Mandatory hearing

Employees cannot be fired in Israel before they have been given an adequate and fair opportunity to make their arguments against the intention to dismiss them. The employer must give employees the reasons for considering termination of employment, and must allow them to review the information and documents on which this intent is based. This right also stands even if there have been repeated violations of the labor contract by the employee.

The employer must hear the employee’s arguments and write down the main points of the hearing or record it. Employees have the right to be represented by a lawyer at the hearing.

Cases in which dismissal is prohibited

Employees cannot be fired if:

  • They are disabled and are able to perform their job, or the job can be adjusted to their disability, in a way that does not impose an unreasonable burden on the employer.

  • They are absent from work due to illness, while they are on sick leave

  • They are on reserve duty service (which can add up to 40 days a year for some) or 30 days after the service term.

  • Their absence was caused by a perilous security situation

  • A female employee is undergoing fertility treatments, is pregnant, back from maternity leave or in cases where an employee is undergoing an adoption or surrogacy process

Eligibility for severance pay

Employers are required to set aside 8.25% of the employee’s salary, in addition to their agreed pay, for their severance pay fund. Thus, on average, for each year of work, the employee will be compensated by a month’s wages if they are fired. The exact amount depends on which salary components such as sales commissions and various bonuses are included in the calculation of the severance pay. There are common wage components in Israel such as “clothing allowance” that are not considered as part of the pay for the purpose of calculating the compensation.

Employees who continue to work at a company despite a change of ownership are not entitled to severance pay if they are rehired by the new owner. However, if they are fired or resign later, the new owner will be required to provide severance pay for the entire period of employment in the same company.

Want to learn more about the special protections employees in Israel get when they are dismissed? Talk to our experts.

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