Employer, you may terminate an employee, but promises are to be kept!
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Employer, you may terminate an employee, but promises are to be kept!

February 26, 2018
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An employer terminates the employment of an employee due to the employee not being suitable for the position. The Labor Court sets that prior to the dismissal of the employee, the employer should have sought another position for the employee. Does this mean that the labor relations in Israel are moving in a dangerous direction in which it is impossible to terminate employees? Not necessarily.

In January 2018, a precedent case law was given by the National Labor Court on such issue. The news headlines declared that under such holding an employer is to seek another position for an employee whose termination is considered prior to termination. Even though the publications were crowned in headlines raising serious concerns among employers, it should be clarified that the circumstances of the case at hand were specific circumstances. In that case, an employer had a conversation with a veteran employee who was close to retirement, during which he explained that dismissing the employee from his managerial position is required due to relevant considerations. It was agreed that the supervisor will consider possibilities for the continued employment and that there would be a follow-up meeting within a few days. In addition, the supervisor clarified that if no suitable alternative is found, the parties will part ways. A few days later another meeting took place in which the supervisor informed the employee that because no alternatives were found, it was decided to terminate his employment. The employee filed a Court claim, inter alia for unlawful dismissal. The National Labor Court determined that the company was committed by virtue of the duty of good faith in labor relations to maintain a genuine and honest process of seeking an alternative position for the employee. Although it is possible that at the end of the process it may become clear that there is no alternative but to terminate the employee, prior to deciding so there should be a serious examination of the possibility of relevant employment alternatives in the company. The appeal was accepted so that the company was ordered to pay compensation in respect of unlawful dismissal in the amount of ILS 100,000- taking into consideration the age of employee and the circumstances of decades of employment.

ְIt appears that the holding contains a clear and comprehensive message that “promises must be kept”. The sanction imposed on the employer resulted, inter alia, from the fact that an alternative position was promised to employee, but in practice the employer did not act diligently to examine whether there was indeed an appropriate alternative and did not involve the employee in the process. It seems that the Court would not have held that unlawful termination took place had the employer not promised to seek alternatives and just agree to hold a follow-up meeting, in which a legal hearing could have taken place and the employee could have raised all arguments.

Rather than to create a dangerous new doctrine that has broad, perhaps even extreme, implications, the new caselaw only reinforces the fact that the issue of terminating employment of employees is a complex issue and it is vital to receive ongoing advice from lawyers in the field to ensure that procedures are duly done and pursuant to the provision of the law which are constantly updated. It is advised that in the event of a hearing prior to dismissal, the employer will consult with the lawyer accompanying the company and it is sometimes recommended that the lawyer will actually be present at the hearing process.