A client of our firm recently approached us following a demand from a terminated employee. The employee was demanding retroactive payment for benefits included in a collective agreement that did not officially apply to him, but from which the employer had partially applied certain conditions over the years. Does transferring certain payments to an employee over time constitute a workplace custom, giving rise to an employee's right to receive them as an integral part of their full rights upon the termination of employment?
The recognition of a workplace custom as an implied term (Tnai Miklala) between parties to an individual employment contract runs like a common thread throughout the rulings of labor courts. It serves as an exception to the general rule in labor relations, where it is customary to put arrangements in writing. The courts have determined that a long-standing custom and behavior practiced over many years, which are expected to be repeated, create an implied term—meaning an unwritten condition that serves as an obvious principle absorbed into the individual employment contract.
The burden of proof regarding the existence and details of a custom rests entirely on the party claiming it. This proof must be unequivocal and anchored in a solid factual foundation.
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Insufficient Proof: Several rulings have noted that testimony regarding a few isolated instances where an employer took a certain course of action is insufficient to prove a binding custom.
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Scope of Custom: The claimant must prove that the custom applies to all, or the vast majority of, employees in the workplace.
The burden of proof is relatively high, partly because courts wish to encourage employers to grant occasional perks without the fear that these will ultimately be construed as a binding custom absorbed into individual employment contracts.
Recent Case Study: In a recent case discussed at the Nazareth Regional Labor Court, an employer regularly and over a long period made certain payments included in an industry collective agreement, beyond the legally required payments, even though they had no obligation to do so. The court ruled that these specific conditions were included as an implied term in the employees' individual employment contracts, and the employer could not cease this practice.
However, the court also ruled that the fact that other payments stipulated in that same collective agreement were not paid by the employer over the years indicated that the employer did not recognize an obligation to pay the full rights under that agreement. Therefore, the employee could not demand those unpaid benefits.
Conclusion: While labor courts recognize custom as a source of rights, the party claiming a custom faces the difficult task of proving unequivocally that the custom indeed exists. A custom that lasts for a prolonged period and is applied to most employees may create an implied term, absorbed into the employment contract, giving the employee the right to receive it upon termination.
Because the field of labor relations is complex—especially when collective agreements and extension orders are involved—it is important to regularly consult with a lawyer. This ensures that employees are paid legally required wages and that employment relationships are anchored clearly and unequivocally, preventing unexpected liabilities when employment ends.