Financial Case Appeal – Supreme Court by Law (Tel Aviv) 59680-11-24 Shai Alon – Ministry of Defense – Employment Committee - part 3

"In our opinion, it is not inferred from what has been determined, regarding the scope of the intervention of the Labor Court in an appeal against the decision of the Employment Committee under section 24 of the Discharged Soldiers Law, where it was determined that the jurisdiction of the Labor Court in an appeal filed against the decision of the Employment Committee is broad and similar to the jurisdiction of an ordinary court hearing an appeal against a judgment of a lower court, including the Tribunal, may place its discretion under the discretion of the Employment Committee.  All of this, in general, is based on the factual basis that the parties laid out before the Employment Committee...  This is true with regard to the Employment Committee, since the Employment Committee is a quasi-judicial tribunal, and this derives the scope of the Tribunal's intervention in appealing its decisions.  However, this is not the case in our case.  In this case, we are dealing with the decision of the Director-General as an administrative governmental body, and therefore there is no room for the Tribunal's intervention in an appellate perspective..."

29. We have not yet found room to accept the appellant's arguments with regard to the flaws in the way the committee conducted the proceeding, so that its decision, which he claims was born due to a mistake in its perception of itself and the manner in which it conducted the proceeding, should be revoked. The committee explicitly states on page 12 of its decision that "already in the decisions that preceded the hearing held on September 11, 2024, we made it clear to the parties that the hearing of the testimonies will be held only if the committee decides accordingly...  We also clarified that we did not find in the employee's request any special or unusual reason to allow testimonies to be heard." Notwithstanding the aforesaid, the Committee goes on to note on page 17 of its decision that the appellant did not file a request to hear testimonies based on exceptional and special reasons, while also referring to the broad scope of the documents submitted in the proceeding before it by the parties.
30. The Committee further notes that section 41A(b) of the Law does not obligate it in any case to hold an evidentiary hearing in any case, but only to receive the employee's response as much as possible, in which case the appellant was given many opportunities to present all of his arguments, to complete them and to support them with documents and evidence on his behalf. The committee goes on to note that the appellant tried in every way to bring witnesses on his behalf heard, and in the words of the committee, he "almost forced" it to accept the affidavits on his behalf despite its clear decisions that should not be accepted.  Notwithstanding the aforesaid, the committee referred beyond the letter of the law to these affidavits that the appellant had placed before it and noted that although it could have reached a decision even without addressing them, it saw fit to present their main points.  According to her, these testimonies were based on feelings and impressions, and as such constituted prima facie testimonies at most, which in any case would not have helped the appellant.
31. In light of the aforesaid rule, we did not find room to intervene in the committee's decision regarding the manner in which the hearing was conducted, including its decision regarding not hearing witnesses, when the committee was aware that it constituted a "quasi-judicial" tribunal (see paragraph 9 of the decision, p. 17).  This is a well-founded and reasoned procedural decision, which is within its jurisdiction.  The appellant did not even file an appeal against this decision to the committee, nor did he appeal the court's decision in the present proceeding of December 18, 2024, not to allow him to summon a witness on his behalf (Mr. Sinai), when we recall that the witness whose testimony was requested in the hearing of the appeal was not even one of those whom he sought to bring before the committee.
32. It was further stated that even if the appellant is right regarding the nature of the committee and the manner in which it perceives the proceeding being conducted by it, in any case the decision on how to conduct the hearing before it is a procedural decision, in which the court will not be in a hurry to intervene. For the sake of comparison, it is possible to refer to decisions that are given frequently by the National Hearing Center to work in appeals against procedural decisions of the regional courts, including decisions regarding the summoning of witnesses.  In this regard, the case law states that decisions of this kind are at the discretion of the court before which the proceeding is being conducted, and that as a rule, the appellate court does not customarily intervene in discretion in decisions of this type, except in exceptional cases (see, for example, Request for Leave to Appeal (National) 30504-02-23 Nir Koren - Tarya P2P Ltd., given on February 19, 2023).
33. Finally, we did not find room to intervene in the committee's decision on the merits of the matter, according to which the company proved the existence of both reasons for granting a dismissal permit.
34. As is well known, the scope of the intervention by the appellate court is limited, and will be done only in cases where the trial court (in our case, the committee) made a clear and distinct error, and this rule is true, inter alia, with regard to findings of fact determined by the trial court (see, for example, Labor Appeal (National) 316-10-19 Zeit Tafari - Opus Manpower Services in Tax Appeal et al., given on December 3, 2020).
35. Thus, there is no room to intervene in the committee's decision with regard to the lack of connection between reserve service and the appellant's dismissal. First, its determination as to the date of raising the claim regarding the absence of a connection between reserve duty and dismissal by the appellant in any case was not the only reason that was at the basis of its decision, and it justified its decision, inter alia, by the fact that the business dispute between the parties broke out even before the war and without any connection to it, the fact that the company did not dismiss the appellant on the date on which he performed the critical mass of consecutive reserve days, and the fact that it based its request not on his absence from work but on alleged acts he committed.  We did not find any legal error in this conclusion of the committee, which was reasoned, detailed and based on the extensive material that was brought and placed before it by the parties.
36. The same is true of the second aspect of the committee's decision, which concerns the existence of 'special reasons' for granting the permit. In this regard, the Committee details at length and in detail those special reasons that it found justifying the granting of the permit, first and foremost the essence of the appellant's role as the CEO of the company and the critical weight that must be attributed to the trust that prevails between him and the Board of Directors, as explicitly arises from the Companies Law, 5759-1999.  In a parenthetical article, we note that this matter also arises from case law, which has more than once determined that special trust is required between the CEO of a company and the board of directors (see, for example, Labor Appeal (National) 47000-09-13 Otzar Marine Enterprises in Tax Appeal v.  Ariel Zilber, given on May 10, 2015).
37. The Committee goes on to refer to the circumstances that it believes are at the basis of the crisis of trust between the appellant and the Board of Directors, including the event of the signing of the collective agreement by the Appellant, and notes that this is a claim relevant to the proceeding before it and that the evidence indicates that this was a lengthy proceeding that took place over several weeks, that the Appellant led it on behalf of the Company and that it was conducted without coordination with the Chairman of the Board of Directors and without regular update by the Board of Directors, even though this is a proceeding whose importance to the Company is not negligible. The committee argues that these findings were not denied by the parties and that the appellant did not explain why he acted as aforesaid, why he did not respond to the demand to send a copy of the agreement to the chairman of the board of directors, and that his arguments were limited to the fact that the right of the workers to organize should be respected as a basic right.
38. The committee further notes that the appellant confessed to an incident that took place around the Passover toast in April 2024, during which he prevented one of the company's project managers from speaking. According to the Committee, even though this was an event of less importance than other events detailed in the company's application, the appellant did not refer in his responses to the detailed description brought by the company and did not explain why it was conducted as it was, including why he blocked the manager with her body and why he said things against her and Tnuva's condemnation in the presence of the employees.
39. The Committee goes on to address additional allegations regarding the appellant's conduct, including that despite his claim that he was not present at the company due to reserve duty on most of the dates mentioned in the application, he admitted to conducting intensive negotiations to sign the collective agreement, correspondence he conducted with company officials was presented and he did not refer to the letter signed by him addressed to the company's service providers and providers, in which he announced that Tnuva and the chairman of the board of directors had ordered the payment to be halted without any justification. In the Committee's opinion, this letter, as well as the signing of a distribution agreement on behalf of the Company and contrary to the decision of the Board of Directors, illustrate the Company's claims regarding the Appellant's actions in breach of the contractual and legal obligations imposed on him.  This is a detailed and reasoned legal conclusion, based on the evidence that was before the committee and we did not find any intervention in it.
40. Subsequently, the committee also addressed the events surrounding the replacement of the company's CFO and determined that in this matter as well, it emerged that the appellant acted in contravention of the decisions of the board of directors, and that the large number of lawsuits filed against Tnuva and the chairman of the board of directors should also raise the question of the future of his relationship with the company. The committee goes on to determine that even if, according to the appellant's approach, he acted to save the company in the face of what he saw as improper conduct by Tnuva, the controlling shareholder, the resulting rift created creates a situation in which the company has proven that it can no longer rely on the appellant as 'doing its bidding' and that it will exercise its discretion in its favor as defined by the board of directors, to which it is subordinate.  Finally, the committee, in the absence of an evidentiary basis, rejects the company's claims regarding the creation of chaos by the appellant at the meetings of the board of directors or the deviation of his rights to sign and withdraw funds illegally on his part.
41. Here we note that we have not found a basis for the appellant's argument that the "special reasons" referred to in the law, which are required for the purpose of granting a severance permit by the committee, are essentially parallel to the reasons justifying the denial of severance pay from an employee in accordance with sections 16-17 of the Severance Pay Law, 5723-1963, and that when the committee did not believe so, there was an error in its decision justifying its intervention. In this argument, the appellant relied on the explanatory notes to Amendment 17 to the Law (Government Bill, 2008, 351, 278), which added to the Law the requirement of special reasons in addition to the requirement that there be no connection between reserve duty and dismissal.
42. In accordance with the Supreme Court's ruling, explanatory notes to a bill constitute only one of the interpretive tools available to the court, and they alone are not sufficient to decide the interpretive question at hand (see, inter alia, Civil Appeal Authority 10011/17 Maital Engineering and Services in a Tax Appeal v. Khaled Salman, given on August 19, 2019).
43. Moreover, we have examined the explanatory notes to which the appellant referred and we have not found in them the support that he wishes to read about the nature of those "special reasons" that are required for the purpose of granting a permit. Thus, in the same explanatory notes, it was stated that in the past, the employment committees acted in a manner that reduced the types of cases in which permits were issued for exceptional cases involving "embezzlement or breach of trust by an employee, additional cases in which according to labor law an employee can be fired without prior notice, as well as cases of closure of the business or part of it that require the dismissal of employees within a short time." After the ruling of the National Court, which determined that the interpretation of the committees was erroneous and that they were required to grant a permit for dismissal whenever there was no connection between the dismissal and reserve service, the legislature reached the conclusion that the law should be amended in a way that would clarify that "a permit for the dismissal of an employee during the aforementioned periods will be granted only for special reasons that will be recorded, so that the rule according to which a permit for the dismissal of an employee will not be granted during the period of his service and in the period close thereafter, will be preserved.  except in exceptional cases that justify granting a permit."
44. The law, and thus also the explanatory notes, do not specify what those exceptional cases are, and the appellant did not refer to a normative source or case law, which support his claim that these are the same reasons that justify the denial of severance pay/advance notice to an employee, and only in them. The Committee also referred to the interpretation of the term in its decision and noted that it is the policy of the Employment Committees to interpret the term "special reasons" as "an extreme event in the employee-employer relationship, which justifies the denial of the protection granted to an employee of reserve duty against dismissal during the protected period..." (see p.  19 of the Committee's decision, paragraphs 18-19) and this is how it found the matters that were brought before it.  Thus, we did not find any source that supports the interpretation that the appellant sought to read into the section, according to which it was possible to grant a permit for dismissal only when the committee had determined that for those reasons it was possible to justify denying severance pay/advance notice to an employee.
45. In summary of this point, a review of the Committee's decision shows that it was detailed, reasoned, based on its impression of the documents, evidence and arguments that were brought before it, and we did not find that this was an exceptional case in which there is justification for our intervention in the findings of fact as determined by it. As stated, we determined that the committee's decision regarding the manner in which it conducted the proceeding, including its decision not to hear witnesses, does not constitute a legal error, and in any event, even if we were to determine that it was supposed to conduct the proceeding in a different legal path, the manner in which it was conducted is a decision that is entrusted to it as a quasi-judicial body.
46. On the merits of the matter, there is no room to intervene in the committee's determination regarding the existence of the two cumulative conditions for granting a dismissal permit. Thus, there was no flaw in its determination that there is no connection between the dismissal and reserve duty and also in relation to the requirement for "special reasons" for granting the permit, when we are of the opinion that the reasons detailed at length by the committee were well founded and that its legal conclusion that their accumulation constitutes a special reason for granting the permit does not establish grounds for intervention.
47. To this it should be added, as we detailed above, the committee even made it difficult for itself towards the end and raised the question of whether it was necessary to dismiss him during the reserve period, but in this matter it reached the conclusion that the appellant himself did not deny that he did not report to work and did not contact the company, even though on those dates he no longer served in the reserves continuously.
48. Taking into account the aforesaid rule, we did not find that there is room to accept the appeal against the committee's decision. In a parenthetical article, we note that the remedy to which the appellant petitioned in the notice of appeal was the cancellation of the dismissal permit granted by the committee.  At the same time, in completing his argument, the appellant petitioned for two additional alternative remedies that were not originally requested: to return the hearing of the permit application to the committee or to order that the reasons on which the permit was granted be canceled and that they could not be used in existing and future proceedings.  We determined, as stated, that we did not find room to grant the request to cancel the dismissal permit, in the absence of grounds for intervening in the committee's decision.  For these reasons, we have found no reason to order that the discussion be returned to the Committee.  As to the third remedy that was requested, to order the cancellation of the committee's reasoning, apart from the fact that we did not find a defect in the committee's reasoning, the appellant did not refer to any normative source that authorizes the tribunal to grant such relief, and therefore we even found that this remedy should be rejected.
49. Before concluding, we have decided to state the obvious, according to which the Tribunal is full of appreciation for all the reserve soldiers, whoever they are, and the appellant among them, and that our conclusion that there is no reason to intervene in the committee's decision is based on what is stated in this judgment and does not impair this great assessment or affect future claims, should they arise, regarding the rights to which the appellant is entitled due to the period of his employment.

Conclusion

50. The appeal was dismissed, as stated above.
51. In view of the outcome of the proceeding, the appellant will bear the company's expenses in the sum of ILS 10,000, which will be paid within 30 days from today.
52. Appeal lawfully to the National Labor Court.

It was given today, February 04, 2025, in the absence of the parties and will be sent to them.