A business employs foreign employees through a manpower placement agency that specializes in bringing foreign employees to Israel, whereby the placement agency not only provided the employee but also handled all issues related to the employee's employment, including the employee signing an agreement with it, payment to the employee (the contractor paid the placement agency every month and not the employee) and the issuance of a pay slip to the employee every month. A raid by the immigration police revealed that some of the employees did not have a valid work permit. Are the business managers personally liable for the criminal offense? Are they liable to the employee for everything related to his salary or if he is injured?
For the purpose of regulating the employment of foreign employee, the Israeli Employment of Workers by Manpower Contractors Law defines the degree of responsibility of the placement company in locating, placement and supervising the employment of the foreign employees. The Israeli Employment of Foreign Workers Law is intended to ensure minimal working conditions to preserve the basic rights of foreign employees, which include, inter alia, signing an employment agreement in the employee's language, undertaking medical treatment and providing decent living conditions.
In a case heard by the Tel Aviv Labor Court in February, 2007, a foreign employee who was employed by various construction companies through the same manpower placement agency, which in the meantime went bankrupt, demanded wage differentials that were not paid to him. The Court found that the placement agency and the construction companies are joint employers and the actual employer is obligated to ensure that the placement agency fulfills its obligations under law. Because the placement agency was insolvent, the construction companies were forced to pay the employees themselves. In another case, heard in the Rishon LeZion Magistrate Court in October, 2021, a lawsuit was filed by a Chinese employee who was injured during construction work and sued both the construction contractor and the placement agency. The Court did indeed obligate the contractor to pay the maximum compensation, but a certain liability was also placed on the placement agency because it breached the duty of care by not verifying that the employee it recruited was sent to a workplace that took proper precautions.
It should be noted that managers in a company that employs foreign employees may find themselves personally liable (and not only the company) for infringing upon employees rights. Thus, for example, a case heard by the National Labor Court in September, 2009, dealt with foreign employees who were housed in improper conditions. The Court imposed heavy fines on the officers of the company that employs them for breaching their duty to supervise and do everything possible to prevent offenses by the corporation or by any of its employees.
Because employing a foreign employee through a placement agency may ultimately impose personal liability – under contracts or torts - on officers of the employer corporation and may even end in personal criminal proceedings against the officers, it is vital to ensure that not only orderly procedures are in place, but also that an internal enforcement plan is prepared by an attorney with experience in the field.