About a year and a half ago, the Law for Increasing the Enforcement of Labor Laws 2011 came into effect, which was enacted based on the concept 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 failure to enforce the various labor laws. The purpose of the law is to increase and streamline the enforcement of labor laws by way of taking civil and criminal proceedings against employers and those who hire services from these employers. In addition, the law restricts the ability of public bodies to enter into transactions for the provision of cleaning, guarding and catering services with those who violate the protective laws.
The Law for Increasing Enforcement allows for the imposition of a substantial financial sanction on violators of labor laws, and more importantly, the law establishes the possibility of imposing a personal financial sanction on a corporation's manager if he has not supervised and taken reasonable measures to prevent the violation by the corporation or by a contractor whose services the corporation has hired. In addition, the law imposes a burden on service providers to ensure compliance with the law, and failure to comply with this burden may result in civil and even criminal liability.
Last November, as part of a session on the implementation of the Law for Increasing Enforcement of Labor Law, the Regulation and Enforcement Administration at the Ministry of Economy presented data according to which since the entry into force of the Law to Increase Enforcement has received more than 2,500 complaints, more than 2,912 investigation files have been opened in administrative proceedings, and 156 financial sanctions in the amount of ILS 12,533,760 have been imposed.
How can a corporation manager and the corporation itself defend themselves against its exposure by virtue of the Law for Increased Enforcement? It seems that the adoption of an internal enforcement program in labor law may provide protection to the corporation, its managers, and of course its employees. The wording of the law to increase enforcement indicates that an administrator will be exempt from liability if he acted properly to prevent the violation of the law. By analogy with other similar laws such as the Securities Law and the Restrictive Trade Practices Law, if a corporation manager can prove that he has ensured that he has implemented an effective and tailored internal enforcement plan for the specific corporation; formulated sufficient procedures to prevent violations of the various labor laws while understanding the legal requirements that apply to the corporation; brought the internal enforcement plan for approval by the corporation's board of directors; supervised compliance with the procedures and ensured compliance with the laws; appointed officials on his behalf to enforce the procedures; criticized the implementation of the internal enforcement program; dealt with failures and violations and learned lessons, and of course documented his actions and activities: There is a reasonable chance that he will appear to have taken all reasonable measures to prevent violations of the protective laws and thus protect himself from personal exposure.
In light of the above, it is extremely important that corporations, with their managers, be accompanied by close legal counsel, in order to ensure, through an effective internal labor law enforcement program, that the protective laws will be enforced, provided that a financial sanction can be imposed on both the corporations and the CEOs of the corporations personally. It should be noted that in small corporations as well, there is room to carry out a similar procedure by conducting a comprehensive examination of the company's conduct and receiving ongoing and close legal advice that will ensure compliance with the requirements of the law.
It should also be noted that personal liability also exists in other laws such as the Planning and Building Law, the Restrictive Trade Practices Law, the Prevention of Hazards Law, the Collection and Disposal of Waste for Recycling Law, the Maintenance of Cleanliness Law, the Water Law, the Foreign Workers Law, and more. In these laws as well, it is advisable to be familiar with the legal situation and to ensure that the law is upheld and enforced on the employees in the organization.