Labor Appeal (National) 60529-09-24 Dorit Levy – M.L.H.S. Holdings Ltd. - part 2

The parties' arguments in the Regional Court and the judgment:

7. In the framework of the lawsuit, the appellant and the formal respondents claimed compensation for the loss of survivors' pension, since if the company had deposited benefits for the deceased to the pension fund as undertaking, they would have been entitled to a survivors' pension from the pension fund. In addition, additional social rights were claimed, such as pension deposits, severance pay, overtime pay for work, convalescence pay, redemption of vacation days, compensation for violation  of the Wage Protection Law, and compensation for withholding wages.  The appellant and the formal respondents further argued that the corporate veil between the company and respondents 2 and 3, who they claimed served as controlling shareholders in the company, should be lifted, since the two deliberately avoided paying cogent rights to the deceased.
8. The respondents claimed that there was no employee-employer relationship between the company and the deceased. In addition, an argument was raised regarding double compensation, claiming that the compensation received by the appellant under the Unemployment Compensation Law made the compensation that was supposed to be paid from the pension fund redundant.
9. The Regional Court ruled that there was an employee-employer relationship between the company and the deceased. It was further determined that by virtue of the existence of previous pension insurance, the employer should have continued to insure the deceased in the pension fund and view its bylaws as the determining regulations; The court rejected the arguments regarding the question of whether the deceased wished to be insured by pension insurance and ruled that in our case we are dealing with cogent law that is not conditional on the application and cannot be waived.  The Regional Court rejected additional arguments by the respondents, including the need for a qualification period, statute of limitations and actuarial balance, the obligation to exercise the rights vis-à-vis the pension fund, and more.
10. Quoted from Nevo The Regional Court then proceeded to discuss the main question in our case, which is the respondents' argument that a ruling on a survivor's pension to the appellant in addition to receiving compensation from the vehicle's compulsory insurance means double compensation that is not obligated to be made.
11. The Regional Court ruled that the right to double compensation is possible according to the ruling law and according to the pension fund's regulations in our case.
12. However, the Regional Court ruled that even if there is no impediment to receiving double compensation, there is no reason to determine that the employer is obligated to provide double insurance in the event of death.  According to the Regional Court's ruling, since the obligation is contractual in nature, the Contracts Law (Remedies for Breach of Contract), 5731-1970, obligates the employer only to pay for the damage caused.  That is, "the loss of the deceased's income as a result of his death."  Therefore, when the employer insured the deceased with compulsory car insurance that he provided him, there is a "repayment of the duty to compensate".
13. According to the Regional Court, "this one interpretation is also ostensibly consistent with socioeconomic logic. Full compensation has already been given for the risk that has been realized, and excess compensation is ostensibly punitive, or arbitrary.  All of its activity is to create unnecessary cost, overinsurance, and excess burden.  Additional formal support for this position is found in section 3(a) of the Extension Order, which was already quoted above.  According to this section, the employer and the employee are entitled to separate the pension savings from the life insurance.  In other words, the risk of death in an accident could have been insured separately – and this was done.  According to this interpretation, and in relation to the risk that has materialized, there is not even a violation.  After all, employers and employees are entitled to save on insurance premiums by reducing unnecessary coverages.  This interpretation fits with the perception that the justification for the forced aspect of labor law is their preoccupation with basic rights.  The state imposes pension insurance on employers and employees, because it is essential.  According to this view, the fact that the law allows an employee – and any person – to pay high premiums and insure himself with double life insurance, does not mean that it is just to impose it on another person.  An employer is also a human being – or a person behind a corporate veil – and it is ostensibly unjust to cause economic destruction to the second in order to enrich the former by doubling his wealth."
14. The court further explained its ruling by stating that the extension order states that the employee and the employer are entitled to separate pension savings from life insurance, and therefore the risk of death in a road accident can be insured separately.
15. It was further determined that the veil of incorporation between the company and Hani should be lifted and he should be held personally responsible as a shareholder and director of the company. With regard to Micha, it was determined that even though he served as a director in the company and has a business interest in it, the corporate veil should not be lifted against him because he did not serve as a shareholder in it.
16. The appeal mainly revolved around these two rulings of the Regional Court. The first is regarding the non-obligation of the respondents to pay compensation due to the loss of the survivors' pension; and the second regarding the rejection of the lawsuit to lift the veil against Micha.  We will discuss the relevant arguments of the parties in connection with the discussion of the components themselves.

Discussion and Decision:

17. We will preface by saying that after examining the entire case and considering the arguments of the parties before us, in writing and orally, we have reached the conclusion that there is no justification for intervening in the Regional Court's determination that the veil should not be lifted against Micha. On the other hand, on the question of the obligation of society (and I, towards whom the veil was lifted) on the survivors' pension – we have a different opinion.

The deceased was an employee of the company:

18. First, we will remember that there is no appeal before us against the Regional Court's determination that the deceased was in the status of an employee. A counter-appeal filed by the Respondents was deleted and removed from the Tribunal's file in a decision dated November 4, 2024, while it was determined that the Respondents would be entitled to raise their claims regarding the employment relationship between the parties in the framework of their arguments as respondents in the main appeal.  Since there is no counter-appeal, at most these arguments can be used to reject the arguments in the appeal on its own, and in our opinion they are not sufficient to do so.  In any event, we found no reason to intervene in the conclusion of the Regional Court – based on a correct analysis of the evidence and its application and factual findings – according to which the deceased should be regarded as an employee of the company.
19. In summary, we note in this regard that we accept the determinations of the Regional Court according to which the deceased engaged in the company's core business as a installation technician; Most of his work time was devoted to this activity; His main contribution to society was nothing more than the supply of his workforce; The company provided him with a vehicle and equipment that was used for his work; Even if the deceased had a certain side occupation, this still does not determine that the deceased did not integrate into the company's enterprise; The deceased was not independent in terms of the choice of customers or the schedules for the execution of the installations; There is no significance to the engagement agreement, which includes incorrect and irrelevant details, and that no weight should be given to the deceased's consent to the manner of the engagement, and in particular that despite the formal attire, the consideration paid to the deceased was not against invoices, but against pay slips.

Obligation of Respondents to Pay a Survivor's Pension:

1. The obligation to arrange pension insurance for the deceased:
2. Since the deceased was an employee of the company, it was obligated – as its employer – to insure him with pension insurance. This obligation originates in section 3(a) of the Extension Order (Consolidated Version) of the General Collective Agreement Regarding Compulsory Pension (Publication Portfolio 6302 of September 27, 2011), which states: "Every employee...  will be entitled to be insured under this order and to choose... In a comprehensive pension, including a provident fund for an annuity approved by the commissioner... provided that it also includes coverage in the event of death and disability in the same health plan or in another health plan...".
3. It is clear that there was no dispute that even in the determination of employment relations retroactively, to the extent that an employer breaches his legal obligations regarding the arrangement of pension insurance, he is exposed, event controls entitle him to a claim concerning compensation for all the damage caused by the breach, and in our case, compensation for the entire survivors' pension. This claim is essentially a contractual claim.
4. In this context, see, for example, the ruling in Labor Appeal (National) 16350-11-11 Estate of  the late Igor Ifraimov - Bilik Felix Metal Industries in a Tax Appeal (October 25, 2015) (hereinafter: the Ifraimov case): "The cause of action in both proceedings is the company's breach of its duty to insure the deceased in a comprehensive pension fund, in accordance with the provisions of the Extension Order, which constitutes a breach of the employment contract between the deceased and the company.  It should be noted that in the previous proceeding it was not determined that the compensation was awarded for "breach of contract" but rather for breach of the provisions of the extension order, but in essence it is compensation for breach of contract, since the provision of the extension order is part of the employment contract between the deceased and the company (section 30 of the Collective Agreements Law, 5717-1957), and therefore its breach entitles the deceased to compensation."
5. See also the ruling in Labor Appeal (National) 39115-01-21 Yonatan Shai Tirosh - Yifat Ben Shahar (February 22, 2023) (hereinafter: the Ben Shahar case): "Section 19 of the Collective Agreements Law, 5717-1957 (hereinafter – the Collective Agreements Law) states that provisions in a collective agreement regarding working conditions shall be regarded as part of the employment agreement. Therefore, already a generation ago, it was ruled in similar circumstances as follows: 'The cause of action here is not in tort, but in breach of contract, it is the employment contract that obligated the employer and the deceased by virtue of the extension order... When the employer breached the employment contract by failing to make payments to 'insurers', as imposed on her under the collective agreement that applies under the extension order, the deceased has the right to sue.  The choice was to sue for performance in kind by enforcing the payments to 'insurers' or to claim compensation for the breach of contract'...  Since the source of the right under the Pension Extension Order is in a collective agreement, the provision of section 20 of the Collective Agreements Law  applies, according to which "rights granted to an employee by personal provisions in a collective agreement cannot be waived."
6. As stated, in this context of the basic obligation to insure the deceased with a survivors' pension and its scope, the Regional Court has made a series of determinations that are not warranted and are acceptable to us. Thus, it was rightly held that by virtue of the existence of previous pension insurance, the company should have continued to insure the deceased in the pension fund and to view its articles of association as drafted on the day of death as the determining bylaws (compare: Labor Appeal (National) 1342-01-24 Meir Ben Shaton vs. Raphael Turgeman (October 10, 2024)).
7. The Regional Court also legally rejected the arguments relating to the question of whether or not the deceased requested to be insured by pension insurance, and ruled that in our case we are dealing with cogent law that is not contingent on the application and cannot be waived (see the Ben Shahar case above).
8. The respondents' argument that in light of the employee's right to choose, it can be assumed that the employee would have waived his survivors' pension insurance. Indeed, this is an assumption that needs to be proven, and since it contradicts the default in the extension order of insurance in a comprehensive pension arrangement, the burden of proving it is heavy.  In cases where the employer's liability for disability insurance has been reduced (such as in a labor appeal (national) 7243-10-15 Lilian Landsberg v. Gal-Rov Consultants in a Tax Appeal (August 20, 2018) (hereinafter: the Landsberg case), we are talking about the actual choice of employees in a partial insurance arrangement and not about speculation regarding the question of what the deceased would have chosen.
9. To this, we will add that in any event, when the Regional Court ruled that the starting point for the attribution is that the deceased should have been insured in a comprehensive pension fund, we are dealing with a device in which disability and survivors' insurance is a built-in part of the rights granted to the member (see, for example, paragraph 73 of the judgment in the Landsberg case).
10. As stated, the Regional Court rejected additional arguments by the respondents, including the need for a qualification period; statute of limitations and actuarial balance; The obligation to exercise one's rights vis-à-vis the pension fund and more – in these matters, the result reached by the regional court is acceptable to us for its reasons. The bottom line in this matter is that the company is obligated to insure the deceased in Menora Mivtachim's comprehensive pension fund, including survivors' insurance, which is a built-in part of a comprehensive pension.
11. The option to take out double insurance:
12. As determined in the judgment of the Regional Court, the Supreme Court in Civil Appeal 7946/09 New Campus Pension Funds v. Yael Enoch (February 29, 2012) has already ruled that there is no impediment to the injured party receiving double payment in such cases. This was also ruled by the Supreme Court in Civil Appeal 1659/21 Malka Yona v. Clal Insurance Company in a Tax Appeal (July 5, 2022) (hereinafter: the Malka Yona case).  In the same matter, it was determined that the compensation due to the estate for the death of the deceased in a road accident should not be deducted from the compensation due to him from the survivors' pension (i.e., by virtue of the Pensions Law).  In the same matter, it was determined, inter alia, that there is a purposive distinction between the two payments, such that "the survivors' pension is paid to the appellant due to the death of the deceased and in accordance with his working conditions.  On the other hand, the compensation in the tort claim for the 'lost years' is paid to the estate, which falls into the shoes of the deceased, for his death as a result of the accident."  In any event, whether or not there is a right to offset in certain cases, there is no dispute that the starting point is that there is an entitlement to payment from the pension fund even in the case of another insurance for the same qualifying event.
13. Therefore, the respondents' basic argument that the very possibility of awarding compensation for the loss of the survivors' pension in addition to the payments under the Survivors' Pension Law is "double compensation" that is contrary to the law. At most, without going into this discussion on its merits, the claims of offset can be argued in the framework of the management of the pension case itself, but not in the framework of the question of the pension fund's obligation to pay.
14. It should be noted without exhaustion that in this matter there is a distinction between a claim for a disability pension from the fund and a claim for a survivor's pension in the event of death. Our case focuses only on cases of death.

• 00The obligation to insure a survivor's pension also insured an employee who is insured by car insurance:

0

32. As stated, the Regional Court ruled – although there is no impediment to making arrangements for double compensation – that in our case the employer is not obligated to do so. The employer fulfills its obligation in the circumstances of the case to arrange compulsory car insurance.  We have a different opinion on the matter.   From the moment the employer is obligated to pay for pension insurance – and this obligation cannot be stipulated – a breach of this duty imposes on the employer a duty to compensate when the breach caused the damage.  Failure to provide an employee with pension insurance means that in the event of death, the employer must compensate the survivors for the damage caused by that failure and put them in the position they would have been in if there had been valid pension insurance.  Had the company fulfilled its duty to the deceased and deposited benefits on his behalf to the pension fund, the appellant would have been entitled to a survivors' pension without reservation.  These or other offset arrangements, to the extent permitted by law, should have been examined in the framework of the settlement proceeding, and not in a theoretical claim against the pension fund as aforesaid.
33. In our case, there is an independent obligation by virtue of the law  for compulsory car insurance and an independent obligation for pension insurance.  The legislature did not link these obligations and did not set any restriction on the obligation to pay for pension insurance or a limitation on the amount of compensation.  Even in the relevant contractual documents – the policy and the regulations, there are no conditions or qualifications linking the insurances, as far as a survivor's pension is concerned in the event of death (as mentioned, there are other arrangements regarding a disability pension and there is no room to extend them).
34. The basic assumption in the interpretation of a law or contract, and especially when it comes to such a far-reaching interpretation, is that it must be anchored in the language. In our case, as stated, we are dealing with two independent and separate obligations, which the legislature – or the relevant parties to the general collective agreement that was expanded in the expansion order – did not see fit to connect them or to limit them either in the statutory law or in the contractual documents deriving from it.  This is the interpretive starting point.  Therefore, no linguistic basis was found for the conclusion that in arranging the compulsory insurance, the company fulfilled its obligation to arrange pension insurance.
35. From a purposeful point of view, too, our opinion differs from that of the Regional Court. The Regional Court found no purpose in the claim that the legislature established double compensation in the case of death in a road accident, but not in other cases.  As noted, in our opinion, this is not the way to look at things.  The legislature established two separate and independent insurance obligations.  Whenever the conditions are met according to the fund's bylaws or according to the insurance policy, there is entitlement to compensation.  In some cases, the terms will activate both the policy and the regulations, and in others they will not.  The duty imposed on the employer cannot be interpreted solely according to the outcome.
36. On the contrary, the Regional Court qualified its determination only to a specific case in which no pension insurance was established by the employer and the determination was made retroactively. However, the justification for this restriction is not clear.  If this interpretation is indeed consistent with "socioeconomic logic," then it should apply to the outset as well.  Ostensibly, there should therefore be a mechanism that allows the employer to reduce the premiums to the pension fund in the event that it also provides compulsory car insurance.  Alternatively, in accordance with this logic, there should have been a mechanism that exempts a person insured by pension insurance from the obligation to arrange car insurance.  It is clear that these mechanisms do not exist in law.
37. Although they were said in a different context, the words of the Honorable Justice Barak Erez in the Malka Yona case are relevant for our purposes, from which the lack of connection between the two types of compensation arises: "On the substantive level, it is easy to see that the survivors' allowance does not coincide with the compensation that should be paid – neither in its rate nor in the identity of the beneficiaries. In terms of its rate, the survivors' pension reflects the pensioner's length of service and his earnings during those years.  On the other hand, the amount of compensation is forward-looking and is directed at the expected work and earnings of the pensioner.  In terms of the identity of the beneficiaries, as it was argued, the survivors' pension, as its name implies, is paid to the survivors, and not to the heirs.  The overlap between the group of survivors and the group of heirs is possible but not necessary... To this, it can be added that the death of the pensioner in a car accident created, at most, an "acceleration" of the entitlement to pension payments, but did not create the entitlement itself out of thin air."
38. There is no dispute that in other insurance mechanisms as well, the legislature has consciously determined double compensation, and in others it has consciously and explicitly determined that this will not be the case. In this context, see the ruling of the National Labor Court in  Labor Appeal (National) 6471-03-21 Rina with Ran - Yonatan Shai Tirosh (February 22, 2023): "The employer argued that the value of the disability and survivors' pensions paid by the National Insurance Institute for the rest (disability) and the respondents or any of them (survivors) should be deducted from the compensation to the respondents.  There is no basis for the claim for the simple reason that these allowances – as distinct from other allowances (such as allowances for work injuries and allowances under the Rehabilitation and Victims of Hostile Acts Acts) – are not deducted from the disability and survivors' pensions paid by the pension funds.  Therefore, if the employer had insured the deceased, the deceased and the deceased's children would have been entitled to both disability and survivors' pensions from the pension fund and to National Insurance Institute pensions."
39. In this context, the appellant is correct in arguing that the Regional Court itself ruled that the survivors' allowances paid to the appellant from the National Insurance Institute should not be reduced, but its reasoning for the difference between these allowances and the survivors' pension relates only to the amount paid. This reason, insofar as we are concerned with the question of the liability itself , cannot stand.  A breach of a contractual duty may impose a significant amount of liability on the violator, and the amount of the sum is not a reason for determining that there is no obligation.
40. The Regional Court ruled that the language of the extension order allows the employer to save on premiums by "reducing unnecessary coverages" by relying on car insurance. Our opinion in this context, too, is different.  Section 3A of the Extension Order does allow coverage in the event of death and disability to be valid "in the same or other health plan".  As stated, in the Landsberg case,  the National Court gave significance to the employee's free choice in this context.  However, as we said above, when it comes to a comprehensive pension fund, as in our case, the things are intertwined anyway.  According to the fund's bylaws, which the regional court rightly determined to be the relevant one, a member who is married cannot choose the track without survivors' insurance.
41. Even if this was not the case, it is certainly not to go so far as to view an insurance policy against death in road accidents as a "different fund" as stated in the expansion order. As mentioned, these are two devices from different "families" and come for different purposes.  It is clear that the term "fund" in the Expansion Order refers to the various definitions in the Supervision of Financial Services (Provident Funds) Law, 5765-2005, and it is clear that an insurance policy against personal injury is not a fund according to any of the definitions there.
42. Moreover, the Appellant is correct that there is a difficulty in the Regional Court's determination that the employer was obligated to draw up pension insurance – a determination according to which the employer was obligated to pay the premium (benefits payments) to that insurance, and on the other hand, in the determination that he is exempt from paying the survivors' pension that was lost due to non-payment of that premium. As stated, the pension arrangement is a comprehensive arrangement and the premiums paid are intended to cover all the components of the regulations: an old-age pension for an employee, a disability pension and a survivors' pension in the event of death.
43. The appellant is further correct that the result of the judgment is liable to incentivize employers not to act in accordance with the law, since it neutralises, in the common case, a great risk that they face in the event of a violation.
44. Let us note above the need that the ruling of the National Court (the Ben Shahar case) held that, as a rule, when it comes to the basic level of pension insurance in which the employer is obligated to do so, it would not be correct to attribute "contractual contributory fault" to an employee for thwarting the possibility of insurance. This is with the exception of exceptional cases that relate, inter alia, to beneficial arrangements beyond the level of the legal obligation.  It was also determined that "there may be exceptional and exceptional cases in which the employee will thwart the possibility of making a pension insurance arrangement without the knowledge of his employer."  The question of whether, when the format of the engagement with the employee is le-khatḥila as that of an independent contractor, there is any consideration to deviate from this rule – we will leave it for the time being.  It is possible – without setting any precedents – that in this context, the employee's conduct in bad faith, full initiative and his clear interest in the form of the engagement, etc. – will increase the tendency to view this as an exception that allows the use of contributory fault.  In any event, it emerges from the evidence that there is certainly no room for this in our case, and there is no room to elaborate on it.
45. Additional claims:
46. As to the respondents' argument regarding the act of the court, it is clear that the judgment given in the appellant's claim against Harel relates to the insurance events relating to the road accident, and does not constitute an act of the court in connection with the parallel claim relating to survivors' pension, and there is no room to elaborate on this matter.
47. Thus, and briefly, the respondents' arguments that with regard to compensation for road accident victims there is a "singularity of cause" should be rejected. Certainly, this does not relate to parallel claims by virtue of different contracts – relating to life insurance arrangements, survivors' pensions, and the like, but only to the tort claim itself.
48. To conclude this matter, we will note above the need to reject the appellant's argument for widening the façade. There is no dispute that it was only after the submission of the summaries in the case that the respondents sharpened the front of the dispute on the question of the entitlement to a survivors' pension of a person who received compensation under the Pensions Law.  In paragraph 79 of its judgment, the Regional Court rejected the Appellant's arguments for the expansion of the front in this matter.  We did not see fit to intervene in this factual determination.
49. In any event, from a formal standpoint, the court did what was necessary to broaden the front of the dispute. As stated, the argument arose at the summary stage.  At this stage, the Regional Court instructed the parties to address its intention to instruct the Company to submit the judgment in the matter of the Patent and File Arbitration and the actuary's opinion according to which it was given.  As a result, the discovery of the documents was completed at this point and the Regional Court ordered the submission of an amended statement of defense (it will be mentioned – after summaries).  According to this decision, an amended statement of defense was filed on February 12, 2024, which explicitly included this ground.  The appellant submitted a reply to the amended statement of defense, which addressed the issue in detail on its merits.  After that date, no supplementary evidence was requested on behalf of either of the parties, and on April 7, 2024, the appellant filed a motion to continue to discuss the proceedings from the stage in which they are in and to render a judgment.  If so, formally, the pleadings were amended and the appellant expressed her opinion that there was nothing to add in this matter from an evidentiary point of view, as opposed to the arguments she heard.

Amount of compensation:

49. In light of the compilation, his conclusion is therefore that the appeal in this matter should be accepted and it is determined that respondents 1 and 2 are obligated, jointly and severally, to pay a survivor's pension to the appellant.
50. As to the amount of the sum, in our opinion, the Regional Court is correct that although it was possible to question some of the determinations of the opinion on behalf of the appellant, "in the absence of a counter-actuarial opinion, and after we have rejected all the individual arguments of the defendants, the opinion on behalf of the plaintiffs stands alone as decisive evidence".
51. However, as the Regional Court held, in fact, the amount awarded for non-payment of provident and compensation premiums must be deducted from the amount claimed. As is well known, it is not possible to claim both the damage in respect of the insurance incident and the premiums, and in fact it is a matter of double compensation (see, for example, in the case  of Ifraimov,  paragraph 39 of the judgment).
52. In light of the aforesaid, the appellant is entitled for the loss of the survivors' pension in the amount claimed – NIS 1,075,699, of which a sum of NIS 21,080 must be deducted.

Lifting the veil against Micah:

53. As stated, the Regional Court decided that there was a cause for lifting the corporate veil against Hani (a determination that we cannot appeal against) but dismissed the claim on this ground against Micha. There is no dispute that Micha was not a registered shareholder in the company.  The appellant pointed out to the Regional Court and reiterated before us that there are indications that justify determining that even though he was not registered as such, Micha was in fact a controlling shareholder in the company, and there is justification, as stated, to lift the corporate veil against him.  In the judgment, the Regional Court, after analyzing the relevant rulings, ruled that the claims in this context had not been proven and that it was not possible to determine that Micha was a hidden shareholder or a hidden controlling shareholder in the company.  The Regional Court ruled that "the business interest of an employee and a director... does not constitute grounds for lifting the veil.  This is not an aspect of fraud, or deprivation of creditors, or impairment of the ability to repay, which is required by section 6 of the Companies Law."  He later stated in connection with the claim that Micha had admitted that he was the owner of the company, that "such things were indeed said, but they do not show that defendant No. 3 was the owner.  The conduct is appropriate for a situation in which he serves as a director and as an influential employee with a financial interest, and he and defendant No. 2 are not precise in their language.  We determine that a situation in which a manager says that he is the owner does not grant him shares.  It could, under the appropriate circumstances, establish grounds for deception, but that did not happen in our case."  He also ruled that "it has not been proven before us that defendant No. 2 is a straw man, and therefore we will not lift the veil against defendant No. 3, according to this rule."
54. As stated, in our opinion, the appeal on this point should be dismissed: there is no need to expand that the Regional Court is correct in its determination that lifting the corporate veil under section 6 of the Companies Law, 5759-1999, means attributing a company's debt to a shareholder in it. The legal instrument of lifting the veil does not allow attributing a company's debt to a manager, director, senior employee, business interest, etc.
55. Indeed, it is known that registration with the Registrar of Companies is not the be-all and end-all, and that ownership of the share is substantial and does not depend on the registration. However, the claim that Micha is in fact a  shareholder in the company requires proof.  In this context, there is no significance to the appellant's arguments, which the Regional Court determined to be correct in themselves, regarding Micha being a director and having business interests in the company.  There is also no significance in this context to the issues that the Regional Court decided regarding the significance of the transfer of the company's business activity to another company and the intention behind it.  From a factual point of view, Micha is not registered as a shareholder in the company and it has not been proven that he is in fact a shareholder.  The claim that this was a covert partnership in shares that was not registered or that Hani was a "straw man" on Micha's behalf should have been backed up by much clearer and clearer evidence than those that were submitted.
56. Indeed, this tribunal ruled in Labor Appeal (National) 41428-01-13 Mordechai Shaham - Kobi Biton (10.05.18) (hereinafter: the Shaham case) that in that case the appellant should be regarded as a controlling shareholder in the company despite the lack of registration. Thus it was held: "The fact that Shaham is not registered as a shareholder as a result of a deliberate act of concealment, using straw men, does not raise or lower it, in circumstances in which registration in the books of the Registrar of Companies has a declarative role only... and the registration of "straw men" as shareholders does not constitute a means of acquiring immunity from lifting the veil on the controlling shareholder of the company...  In the Kamri case, too, the court had a similar "feeling", but there was a lack of real evidence, following Shaham's concealment and evasion activities, and these were found in the conviction in the VAT case.  Thus, Shaham is the controlling shareholder and the living spirit of the companies that employ him, and there is no impediment, subject to the circumstances, to apply the provisions of section 6 of the Companies Law to him."
57. In the Shaham case, the National Court's ruling was based on the appellant's conviction in a criminal case, in which it became clear – after an investigation – that the appellant was indeed the controlling shareholder of companies registered in the name of straw men.  This is far from the situation in our case.  Indeed, the Regional Court ruled that Micha was a director of the company, even though he was not registered as such with the Registrar of Companies.  This is on the basis of a public servant's certificate issued by the Corporations Authority, according to which Micha was appointed as a director as part of the company's incorporation documents.  However, as stated, the fact that he is a director does not indicate that he is a shareholder or that he is a straw man.  In addition, it was determined that Micha's name appears in the company's name (M.L.H.S. – the acronym for Michael Levy and Hani Salim).  Even these assertions, although they raise questions, are not sufficient according to the balance of probabilities to justify lifting the veil against Micha.  All of these can have legitimate explanations of one kind or another and there is no clear evidence in them.
58. The appellant claims that decisive evidence is the fact that the Regional Court ruled that the company's activity was transferred by Micha and Hani to another company, in which they serve as shareholders with equal distribution. However, as the respondents' counsel argued before us, these facts can equally point to the opposite conclusion as well.  The fact is that when the new company was established, Micha was indeed officially and openly registered as a shareholder in it.  Hence, there may be various and strange legitimate interests and explanations as to why it did not do so at the time of the establishment of respondent No. 1.  It is not impossible that a certain person who is the owner of the hundred invests in the company in exchange for being the shareholder, while his friend who is the owner of the opinion will serve as a manager and the living spirit of the company without being considered a shareholder.  Even with regard to the statements made by Micha that he is the "owner" of the company, we accept the reasoning of the Regional Court and its conclusion that this is not sufficient to prove ownership of the shares, and in any case we do not intend to interfere with the factual conclusions of the Regional Court in this context.
59. In light of this conclusion, as stated, there is no significance – in terms of the question of lifting the veil per se – to the appellant's arguments regarding the significance of the transfer of business activity to another company, to the question of whether the deceased asked Micha to make deposits to the pension fund and the latter made a false representation to him in this matter, and more.
60. Conclusion: We have found it appropriate to accept the appeal with regard to the obligation of respondents 1 and 2 to a survivors' pension. In accordance with the opinion submitted by the appellant, these respondents will pay it the sum claimed and collected in the opinion less the payments awarded to the provident and compensation.  The sum claimed is NIS 1,075,699, from which the sum of NIS 21,080 must be deducted.  The amount will be paid together with NIS interest from the date of filing the claim until the actual payment.
61. Respondents 1 and 2, jointly and severally, will bear the appellant's expenses in the sum of NIS 25,000 in the circumstances of the case. In the relationship.

It was given today, 2 Tevet 5786 (December 22, 2025), in the absence of the parties and will be sent to them.