Labor Dispute (Tel Aviv) 37898-06-22 Lisa Miller – Ann Group S. Or. Technologies Ltd.

Judgment

1. Whether the plaintiff is entitled to payment of a bonus after the termination of her employment with the defendant is a question that needs to be decided.

The Facts

2. The plaintiff is a data scientist who began working for the defendant on December 15, 2019, a company engaged in the cyber field.
3. The working conditions were regulated in the employment agreement of December 2, 2019 (hereinafter: the Agreement).
4. Clause 5 of Appendix A to the agreement states as follows:

Bonus - From time to time, the company will consider granting the employee a bonus, the bonus will be at the sole discretion of the company and is subject to the recommendation of the employee's superiors.  For the avoidance of doubt, the bonus is not part of the salary for any purpose, including for severance pay and pension arrangements.

5. On March 16, 2022, the plaintiff received a letter informing her of an increase in her monthly salary (from a total of ILS 34,000 to ILS 40,000). The letter also stated that a bonus (known as a performance bonus) in the amount of ILS 80,000 (hereinafter also referred to as the bonus notice).
6. In the bonus announcement, it was noted that the payment of the bonus is subject to "acceptance" with the relevant shareholders and their final approval (a literal translation of the clause in the notice recorded in the English language). This letter regarding the bonus was sent to other employees.
7. On March 24, 2022, the plaintiff announced her resignation in writing, giving one month's advance notice until April 24, 2022.
8. Subsequently, after the resignation notice, the plaintiff (as well as the other relevant employees) received a notice stating that it had been decided to pay the bonus in two installments (paragraph 4 of the plaintiff's affidavit and paragraph 18 of the defendant's affidavit).
9. On April 7, 2022, the plaintiff sent an email to an employee of the defendant's wages department, Mr. Or Timur, requesting, among other things, whether the bonus would be paid to her in full in the coming month or in two installments. Or replied that "an annual bonus will probably be paid like the rest of the company's employees" (Appendix 6 to the defendant's affidavit).
10. On April 14, 2022, the plaintiff was paid the sum of ILS 40,000 for the bonus.
11. After the termination of the employment relationship, Mr. Tal Fialkov, the plaintiff's direct manager, informed her that it had been decided not to pay the bonus to employees who did not work for the company. In view of the above, the plaintiff did not receive additional payment for the bonus.
12. On June 19, 2022, the plaintiff filed a lawsuit against the defendant and petitioned for payment of the bonus.
13. The defendant filed a statement of defense and denial in the lawsuit.
14. At the evidentiary hearing, the plaintiff testified alone, and on behalf of the defendant, Ms. Michal Alsheikh, an employee of the company (hereinafter - Michal), testified.

Summary of the parties' arguments

15. According to the plaintiff in the affidavit, the bonus in question is for performance in 2021, and since she worked in that year, she was entitled to receive the full bonus, even if the actual payment was made after the termination of the employment relationship. In her summary, the plaintiff argued that Appendix A to the agreement also mentions a grant, which is conditional on the fact that no notice of termination of the employment relationship was given (clause 6), but with regard to the bonus (clause 5), this condition is not mentioned.  From this we learn, according to the plaintiff, that an employment relationship is not required for the purpose of paying the bonus, because it is a bonus for past work.  According to the plaintiff, the bonus notice relates to the bonus given for past achievements, and therefore she is entitled to the full payment.  The plaintiff further noted that although according to the case law the bonus is at the discretion of the employer, in this case the employer has already decided to grant the bonus, while the plaintiff was still working for the company, and therefore she is entitled to the full bonus.
16. It was further claimed in the plaintiff's summaries that no evidence was presented to support the claim that the shareholders decided to pay the bonus in two parts and that no bonus would be paid to the employees who completed their employment with the defendant. In addition, the plaintiff claimed that the bonus was supposed to be paid in one payment and due to the defendant's financial difficulty, it was determined that it would be paid in two installments, so that due to this fact alone, she was denied full payment.
17. On the other hand, the defendant argued that the claim lacked a legal basis, since the plaintiff did not point to the source that entitles her to the payment of the bonus. The documents to which the plaintiff referred in the affidavit do not establish her entitlement to the alleged payment, and the plaintiff resigned, knowing that no commitment was given to pay the bonus.
18. It was further argued that the decision made by the shareholders itself was not at the forefront of the dispute, since no claim was raised on the matter in the lawsuit or in the plaintiff's affidavit.
19. It was also argued that a bonus is a benefit that is at the discretion of the employer, including in relation to the date of payment, and in many cases the purpose is to provide an incentive for the future.

Discussion and Decision

20. After considering the evidence and the arguments of the parties, we found that the claim should be dismissed.
21. At the outset, it should be clarified that the burden of proving that the conditions for the payment of the bonus have been formulated is on the plaintiff (compare: Labor Appeal (National) 63864-06-16 Fashion Products Marketing Concept (1995) in Tax Appeal v. Gideon Goldfinger (January 16, 2019)).
22. The plaintiff did not meet the burden of proof for the following reasons.
23. First, the plaintiff does not deny the claim that the decision in principle to pay a bonus is at the discretion of the employer.
24. The plaintiff does refer to the relevant clause in the employment agreement, and claims that a bonus of the type in question is supposed to pay off even after the termination of the employment relationship. However, the language of the agreement does not require payment after the termination of the employment relationship, but only does not exclude such a possibility.  The agreement stipulates that the bonus is at the discretion of the employer.  In any case, this discretion also includes the possibility that the employer will determine that the bonus will be paid only to employees employed by the company.  There is no provision in the agreement requiring the payment of a bonus even to employees who are not actually employed.
25. Second, the plaintiff did not refer to a written document indicating a final and conclusive decision regarding the payment of the bonus. The bonus notice explicitly states that the payment is subject to the approval of the relevant parties registered in the letter.
26. When in her testimony the plaintiff was asked to present a written undertaking to pay the bonus, she referred, inter alia, to an email message dated April 7, 2022 (prov.   2), but as detailed in the facts chapter, this correspondence does not constitute an obligation to pay, but rather a general non-binding statement that the payment to the plaintiff will be similar to the payment to the other employees.  In this context, we note that in any event, the defendant's claim that other employees who left did not receive the bonus was also not contradicted (Michal's affidavit at paragraph 21).
27. The plaintiff testified that she had received an additional email from her about an obligation to pay, but the document was not kept with her (Prov.    1, s.  37 - p.  2, s.  4).  Since this notice was not presented to us, and no party in the defendant was summoned to testify regarding the alleged notice, in any case this vague claim does not constitute evidence in support of the claim.  Moreover, the plaintiff did not claim in the affidavit that she was sent an email with a commitment to pay, which was not kept in her possession.
28. With regard to the bonus notice, the plaintiff also confirmed that it was a non-final notice and in its language (Prov.   4, para.  31):

The witness, Mrs. Miller:     It has an asterisk that depends on the decision of the board of directors.

29. Third, the defendant's version was not contradicted, that the relevant parties decided to pay the bonus in two installments. Michal testified as follows (Prov.    11):

Adv. Rafaeli: Why was each part approved separately and not the entire bonus approved?