Lior: What did you give for?
Noam: On entering the farm in line and receiving dividends on the farm" (Appendix 13 to Noam's affidavit, paras. 1-3, p. 23 of transcript).
- In summary, we have reached the conclusion that the funds transferred by the plaintiffs to the defendants in exchange for profits were not made within the framework of the terms of their employment or their improvement, and therefore do not fall within the scope of the Labor Court's substantive jurisdiction . Hence, Dvir's claim for the restitution of the sum of NIS 96,000, and Noam's claim for the restitution of the sum of NIS 70,000, are rejected.
- In order to complete the picture, we will clarify that since we have determined that the Tribunal lacks jurisdiction to hear the plaintiffs' claim in relation to the return of the funds they transferred to the defendants, we are not required to examine the status and validity of the partnership agreement that was not signed between the parties (Appendix 1 to the defendant's affidavit), and the question of whether it is a partnership that includes profit and loss or any other form of partnership that essentially involves receiving a profit in exchange for a financial investment. Thus, the discussion of the defendants' claims regarding the return of the sum of NIS 96,000 to Dvir in full, and Noam's ineligibility for a refund of NIS 70,000 due to his breach of the partnership agreement, an argument that came up for the first time in the defendants' summaries. We will add that it is clear that our determination above does not prevent the plaintiffs from raising their claim in the appropriate forum, and subject to the provisions of the law.
Lifting the Curtain
- The plaintiffs petitioned to lift the veil of incorporation between the defendant and the defendant, and to obligate the defendant as the sole shareholder in it, its management and the living spirit therein, jointly and severally. The claim of lifting the veil is based mainly on the claim that it has been proven that the defendant performs the actions and makes decisions in all matters relating to the employment of workers on the farm (paragraph 6 of the Dvir summaries). The plaintiffs added that it has been proven that the defendant does not pay, and even deliberately prevents the payment of cogent and social rights by virtue of the expansion orders in the agricultural industry, and does not consistently deposit benefits to all employees, including the plaintiffs (paragraphs 8-9, 19-23 of Dvir's summaries, paragraphs 8-9, 19-23 of Noam's summaries); And it is not for nothing that he did not have any satisfactory explanation for his failures, but rather he tried to place the responsibility on others, including the bookkeeper or the employees (paragraph 10 of Dvir's summaries, paragraph 10 of Noam's summaries). Moreover, the plaintiffs claimed that the defendant knew that the plaintiffs worked on Saturdays and holidays, and despite the aforesaid, he refrained from paying them as obligated.
- The plaintiffs further claimed that the defendant knew in real time that no funds had been deposited into the pension fund for them and for the farm workers, and that the payments that were deducted from the workers' wages were not transferred to the fund, and thus the defendant reached out to the plaintiffs' money (paragraph 15 of the plaintiffs' summaries).
- According to the plaintiffs, it was proven that there was no separation between the defendant and the defendant, since the seriousness fees they paid were not deposited in the farm's account, and were not reported in the library (paragraph 11 of the plaintiffs' summaries). According to the plaintiffs, the defendant should be charged personally since the farm lacks financial capacity, and since the defendant not only did not pay the plaintiffs the basic rights to which they are entitled by law, but also took their money and refused to return it (paragraph 12 of the plaintiffs' summaries). The plaintiffs also sought to attribute to the defendant his attempt to defraud the Legal Aid Bureau by applying for representation on their behalf (paragraph 26 of the plaintiffs' summaries).
- On the other hand, the defendants denied the plaintiffs' claims and claimed that there is no basis for lifting the corporate veil, and that there is no rivalry between the plaintiffs and the defendant, andtherefore they cannot claim that the defendant is their employer. It should be noted that in their statement of defense, the defendants claimed that the farm was solvent and capable of payment (paragraph 59 of the statements of defense).
- The Legal Framework – Basic Concepts That Section 6 of the Companies Law, 5759-1999, outlines the conditions under which it is possible to lift the veil of incorporation, and to deviate from the principle of separate legal personality, while allowing discretion as to whether it is right and just to do so to the court [Labor Appeal (National) 26295-01-16 Tesfalem Tekel - R.H. Haim Miara Marketing Meat and Fish (1998) inTax Appeal , dated December 25, 2017, hereinafter – the Miara case].
- In the Miara case above, it was held that "in the provision of section 6(a) of the Law, as amended, the grounds for lifting the veil were reduced compared to the provision in the previous version. The wording of the provision of the law indicates that the veil of incorporation will be lifted in those cases in which the principle of the separate legal personality of the corporation is abused, in order to deceive a person, to deprive a creditor or, alternatively, to perform an act that harms the purpose of the corporation, while taking an unreasonable risk in relation to its ability to repay its debts. At the end of the provision of the section, a requirement of awareness on the part of the shareholder of the misuse of the principle of separate legal personality was determined. In addition, when it comes to lifting the corporate veil, the court must consider, among other things, the question of whether the company can repay its debts."
With regard to lifting the veil in the field of labor law, it was ruled in the aforementioned matter that: