Employer: Do not invite an employee to a termination hearing before seeking alternatives for his employment in another position

Employer: Do not invite an employee to a termination hearing before seeking alternatives for his employment in another position

October 19, 2018

An employer holds a conversation with a veteran employee who is close to the retirement age, during which he explained that he wished to remove the employee from his administrative position due to pertinent considerations of structural changes in the company. The parties agree that the employer will consider options for continuing the employment of the employee. A few days later, the employer informs the employee that because no alternatives were found for his employment, it was decided to terminate his employment. Is the employer obligated, prior to termination, to offer the employee an alternative position within the company?

In January 2018, a precedent holding was given by the National Labor Court, which dealt with exactly that scenario. It was held that the employer was obliged by virtue of the duty of good faith in the labor relations to maintain a genuine and honest process of searching for an alternative position for the employee. Although it is possible that at the end of the process it will become clear that there is no choice but to dismiss the employee, the way to a conclusion on this matter should include a serious examination of the possibility of relevant employment alternatives in the company. In the same matter, the company was ordered to compensate the employee for unlawful termination in the amount of ILS 100,000, taking into consideration the age of the employee and the circumstances of decades of continuous employment. Following the holding, some argued that this was a unique and specific case that did not teach of a new policy, but some feared it was a harbinger of an extreme gamechanger.

In September, 2018, another holding was given by the National Labor Court, which dealt with an employer who made a structural change in the workplace. In that matter it was held that the obligations of good faith and trust in the framework of employer-employee relations obligated the employer to examine possibilities for alternative positions for the employee, even under different conditions under which he was employed prior to the change. In the same case, alternative employment options were not examined and were not presented to the employee during the hearing, but only after the employee's attorney approached the company, but at the end of the day the alternative options were dismissed by the employee. Taking into account this fact (as a consideration for the reduction of compensation), the age of the employee and his extended period of employment, the company was required to compensate the employee in the amount of ILS 20,000.

This holding reinforces the fact that this is a new trend in labor law in Israel and that an employer who makes structural changes is obligated, in view of the obligations of good faith and trust in labor relations, to examine alternative employment options for the employee and to raise them during the hearing. While the said holdings dealt with the termination of employment due to structural changes at the employer, it can be said that this trend should be applied even when the circumstances related to the employee are concerned, in the case of an employee who has worked with an employer for many years and can no longer carry out the work he performed, but may do another type of work (e.g. an office position when the employee is no longer able to perform field work due to a medical condition).

The issue of the termination of employment is a complex and important issue, the holdings on which are constantly updated, and it is vital to receive ongoing advice from lawyers in the field to ensure that things are duly done. In addition, it is advisable that in the event of a hearing prior to termination of an employee, the employer will consult with its Human Resources Department as well as the lawyer accompanying the business.