On December 12, 2011, the Knesset approved the Law for Increasing the Enforcement of Labor Laws, 2011, which will come into effect on June 19, 2012. While the cynics will say that it is appropriate to increase the enforcement of existing laws and not to enact a law to increase enforcement (and in the same context, it is now possible to enact a law for the enforcement of criminal law, a law for the enforcement of court procedures, and more), there is no doubt that the law constitutes a fundamental reform in everything related to ensuring the protection of workers' rights in Israel, and a thorough reading of it shows that a great deal of effort has been invested in its enactment. The question is whether the body that has so far failed to enforce the existing labor laws will be able to control the new monster entrusted to it.
The new law was enacted based on the perception that the enforcement of wages and social rights is a way to combat the dimensions of poverty in society, and against the background of the current failure to enforce the various labor laws. At the same time, the purpose of the law is to increase and streamline the enforcement of labor laws by way of taking civil and criminal proceedings, this time not only against employers but also against those who rent services from these employers. In addition, the law also limits the ability of public authorities to engage with anyone who violates the labor laws (beyond the restrictions that already exist today within the framework of the tenders laws, which are not always fully enforced).
The law allows for the imposition of a substantial financial sanction (and even explicitly states that a financial sanction lower than that prescribed by the law or the regulations) cannot be imposed on violators of labor laws, and more importantly, the law establishes the possibility of imposing a personal financial sanction on the CEO of a corporation if he did not supervise and take reasonable measures to prevent the violation by the corporation. The main revolution in the law is the imposition of the burden on service providers to ensure compliance with the law and the ability to impose financial sanctions, civil liability, and even criminal liability on service providers – a revolution that will require a revision of all contractors' employment agreements, and it seems that for this purpose the waiting period of half a year before the law comes into effect.
Finally, as part of the law, the Transactions with Public Entities Law was also amended, according to which a violator of the law will be disqualified from entering into transactions for the provision of cleaning, guarding and catering services with a public entity (which is broadly defined and includes also publicly traded companies and their subsidiaries).Moreover, the law explicitly states (and here too it is difficult to ignore the cynicism of the words) that it applies to what is apparently one of the biggest violators of labor laws in Israel: the state. Only time will tell whether the law will be fully enforced against the state and its branches, and especially whether there will be any use for Chapter E, which imposes personal liability on the directors of government ministries and their auxiliary units.
There is no doubt that the law constitutes a real and important reform in the enforcement of labor laws and is taking a big step in the direction of administrative enforcement, as the legislature has recently done in the field of securities. However, there is a small problem that should not be ignored. The Israel Securities Authority (ISA) is an independent, professional and respected body that employs a large number of economists, jurists and other experts who study and live the market. In contrast, a few months ago we wrote about the six-month ordeal that an employer who wants to fire a pregnant employee has to go through because the Ministry of Labor and Social Affairs employs only two female employees who are in charge of the many requests submitted every month. If professional work is not done to establish a professional and independent authority that will be responsible for the implementation of this complex law, there is a grave concern that the doomsday weapon will be placed in the shaky hands of a private.