The Requirement of Good Faith in Labor Court Claims

The Requirement of Good Faith in Labor Court Claims

August 16, 2017

As an office that represents employers in labor disputes we often encounter claims, the background of which is the employee's belief that Labor Courts tend to favor employees and do not order payment of expenses in case of a rejection of a claim. Thus, Labor Courts are constantly facing frivolous claims, whether by employees or by jobseekers, and employers are sometimes willing to compromise due to the fact that their legal costs in defending such claims may be greater than the amount of the claim. Two holdings given at the end of July, 2017, may signal a new and blessed spirit of the Tel Aviv Labor Court, which is maybe commencing to order frivolous claimant to pay expenses (even if of a low amount).

At the center of the first of the two holdings, a lawyer noticed an ad of a bakery seeking graveyard shift employees. The lawyer was told that the work was not suitable for women and she therefore filed a claim for sex discrimination. The Labor Court not only rejected the claim, but held that the lawyer did not prove that she had qualifications or experience in the field of work and, in fact, the real motivation of the claimant was a bad faith attempt to establish a cause of action and receive compensation without a real intention to be hired. Considering the plaintiff's lack of good faith and exploitation of the law, the Labor Court ordered her to pay expenses of ILS 10,000.

A second holding given by another judge the following day dealt with a woman who's employment was terminated while pregnant without her employer being aware of such fact. The day thereafter, the employer withdraw its decision but sought to transfer the employee to another position at the same salary. The employee refused to return to work and filed a claim against her employer. The Labor Court held that an employer has the managerial prerogative to manage its business as it sees fit, while taking into consideration the rights of the employees. Because the dismissal of the employee was made prior to her pregnancy being known, and because at the end of the day the employee was not dismissed, the cause of claim of the employee is irrelevant. The Labor Court criticized the employee who thought she could be illegally enriched by exploiting the law. The claim was rejected with a charge of expenses of ILS 7,500.

It is plausible that this is a mere coincidence or a few verdicts within an ocean of holdings lenient with employees who abuse the ostensible tendency of Labor Courts to assist employees. However, it is also plausible that this is a blessed trend that will deter employees from filing baseless claims while exploiting the various protective laws to become unjustly enriched by such. There is no doubt that the protection of employees' rights must be ensured, but these rights must be balanced with the rights of employers against the abuse of protective laws.