National Insurance Institute (Tel Aviv) 49879-10-25 Sandy Ibn Ghanem – National Insurance Institute

Judgment

Was there an employment relationship between the plaintiff and her husband when she was practicing law in the firm he owned? This question, which arose in connection with the plaintiff's claim for payment of maternity allowance, is before the court.

The Factual Background

1. The plaintiff, Ms. Sandy Abu Ghanem (hereinafter - the plaintiff or Sandy), is married to Mr. Udi Al-Turi (hereinafter - Udi or the husband), both lawyers by profession.
2. The plaintiff had previously opened a licensed dealer file, which was closed on January 1, 2024 (Appendix 2 to the plaintiff's summaries).
3. The plaintiff practiced law at Al-Turi & Co., a law firm owned by her husband (hereinafter: the firm), from April 1, 2024, until January 31, 2025.
4. On August 2, 2025, the plaintiff gave birth to her second son.
5. On February 24, 2025, the plaintiff submitted a claim for payment of maternity allowance to the National Insurance Institute (hereinafter - the defendant or the Institute). It should be noted that the plaintiff and her husband stated in the claim that there was a husband-wife relationship between them (P/Sections 5 and 8 of the claim).  In addition, the plaintiff and her husband submitted a questionnaire to examine the employee-employer relationship (P/2).
6. On March 27, 2025 , the plaintiff and her husband gave their statements to the defendant's investigator.
7. On April 6, 2025, the defendant notified the plaintiff of a "change to independent status", inter alia:

"In an investigation carried out on March 27, 2025, it was found that the type of work/scope of hours/days of work        indicate that this is not a contractual relationship between an employee and an employer or that the work     is carried out within the framework of natural mutual aid between family members.  Accordingly, it was decided that your work        It is carried out as an independent worker and not as a salaried worker, you must open a file with the National Insurance Institute and therefore You must fill out a report form and send it to us as soon as possible."/4).

8. On April 8, 2025, the plaintiff was sent a notice, according to which her claim for maternity allowance for the period from February 1, 2025 to May 16, 2025 was approved. On April 13, 2025, a credit was made to the plaintiff's private bank account in the sum of ILS 48, 577.
9. On September 29, 2025, the Institute's decision was given on the subject of "Determination of status following a claim for a benefit (a copy of a letter sent to the employer)", in which it was written, inter alia:

"1.  According to the data in our possession, you reported that Ms. Sandy Abu Ghanem al-Turi had an ID card.  xxxxxxxxxx   As a salaried employee in the period from 05/2025 to 08/2025.

2. After an examination that we conducted, it became clear that Ms. Sandi Abu Ghanem al-Turi does not meet the definition of "Employee" (employee), in section 1 of the National Insurance Law (Consolidated Version) 5755-1995,       Of the reasons listed below, in whole or in part:

- The work was performed as an independent worker and not as a salaried employee.  In light of this decision, if the insured       Continuing to work in this job, he must register and pay insurance contributions as a self-employed worker starting from         01/09/2025.

3. No reimbursement of insurance contributions is due.  The full/partial salary reported by the employee actually belongs to   To the employer in accordance with the instructions Sections 357 and/or 358 to the law.  You must fill out the form      Attached.
4. Accordingly, we would like to immediately cease reporting her as a salaried employee."P/1).
5. In addition, on September 29, 2025, the defendant notified the plaintiff regarding the payment of insurance advances for the year 2025 and regarding the debt that arose following the opening of an independent file as of May 2025.
6. At the time of the filing of the statement of defense, the plaintiff's debt, which stems from the failure to pay advances in accordance with the law as of May 2025, amounted to ILS 6, 560, and it grew as the proceedings in question continued.

The Ottoman Settlement [Old Version] 1916Main Proceeding

12. 12-34-56-78 Chekhov v. State of Israel, P.D.  51 (2) On October 26, 2025 and December 30, 2025, the statement of claim and the statement of defense before us were submitted, respectively.
13. On January 8, 2026, a pre-trial hearing was held before the Honorable Senior Judge (as she was described at the time) Ariella Gilzer-Katz. At the end, a decision was made according to which "the case is transferred to evidence according to the round on the question of what was the status of the plaintiff during the relevant period.  Was the plaintiff an employee in her husband's law firm or was she self-employed in a law firm" (p.  3, paras.  7-9).
14. On January 18, 2026, the plaintiff submitted an affidavit of main witness on her behalf.
15. On June 15, 2026, the defendant filed an exhibits file on his behalf.
16. On June 16, 2026, an evidentiary hearing was held before me, during which the plaintiff and her husband were interrogated.
17. On August 9, 2026 and August 20, 2026, the parties' summaries were submitted, respectively. Hence my decision.

The parties' arguments

18. According to the plaintiff, the defendant's decision of September 29, 2025 was erroneous, since there was an employment relationship between her and her husband as an employer. This was in light of his supervision of her work; the receipt of monthly wages and lawful pay slips that were paid by bank transfer to her personal account, as well as the deduction of National Insurance contributions and the provision of pension funds; the use of the employer's equipment and work from the office rented by him.  The plaintiff also claims that the defendant's decision exceeded the realm of reasonableness, since it was made without a factual basis and without all the evidence being considered.  The plaintiff further claims that although she had opened a licensed business in the past, she was forced to close it because she did not meet the requirements and the financial burden required to do so, and chose to work as an employee in her husband's office.
19. In the affidavit, the plaintiff discussed her claims in the statement of claim and went on to elaborate on them. According to her, Udi supervises her work, in the sense that he reads documents before submitting them, gives certain instructions in accordance with the decisions that are made, etc.  In addition, Udi makes all deductions and contributions as required by law from her salary, including National Insurance contributions, pensions, and income tax.  As for the firm, the plaintiff noted that it has existed since 2022, with Udi being the controlling shareholder, and he is the one who advertises the firm on social networks and elsewhere.  The plaintiff noted that she does not have clients of her own, she does not run an independent business, does not advertise her services to the public, does not carry a business risk, is not authorized to sign the business account, the accounts are not shared and she does not pay the expenses of the firm, but still bears these expenses.
20. In her summary, the plaintiff discussed her arguments and added that the family relationship between her and her husband does not negate recognition of her status as an employee, and that according to the tests set out in the law and in accordance with the evidence in the case, it should be determined that there was an employment relationship between the plaintiff and her husband for all intents and purposes. The plaintiff further argued that the defendant's attempt to base his claim regarding the profitability of the business on the basis of VAT reports and assessment reports is erroneous.  Therefore, the plaintiff asks the court to annul the defendant's decision and determine that the plaintiff is a salaried employee, while amending the defendant's records.
21. According to the defendant in the statement of defense, his decision was made lawfully after a comprehensive investigation and examination, and it was found that there was no employment relationship between the plaintiff and her husband. According to him, the plaintiff is self-employed in the firm, and does not meet the definition of an employee within the meaning of section 1 of the National Insurance Law [Consolidated Version], 5755-1995 (hereinafter - the National Insurance Law).
22. Quoted from NevoIn his summaries, the defendant clarified that since this is a close relationship, the plaintiff has the burden of proving the existence of the employment relationship, which will be examined by over-examination. Therefore, and taking into account the definitions listed in section 1 of the National Insurance Law, the plaintiff is not considered an employee, but rather an independent person.  The defendant further emphasized that the employment format is unusual, since the plaintiff as an employee earns more than twice as much as her husband, who is the owner of the firm, and the plaintiff's response to this in her cross-examination was far from satisfactory.  In addition, the plaintiff's claim that she was employed as an employee because of the increase in the scope of activity in the firm must be rejected, since according to the defendant, the opposite has been proven.  In addition, the plaintiff's conduct is characteristic of self-employed: her phone number is listed on the firm's logo; she signs in her name and not in the firm's name, including when sending claims for policyholders; she is authorized to sign; she negotiates with clients; she receives clients for a meeting; she noted in her cross-examination that "we" rent the firm; her husband works as an employee for his father and in addition he has an entrepreneurial company, which weakens the supervisory claim; and in fact they are two freelancers or two independent partners in the firm; and regarding signing authorizations, the plaintiff gave different versions in her interrogation with the defendant and in her cross-examination, and even the plaintiff and her husband gave a different answer in their cross-examination regarding closing fees with clients.  Moreover, the defendant claims that no employment agreement was signed and no recording of the plaintiff's working hours or attendance was made, even though it was claimed that her salary was hourly and that the difference of one or two hours between the working days does not explain the difference between the salary of approximately ILS 7, 000 and the salary of approximately ILS 14, 000.  The defendant further argues that the pay slips and deposits are incoherent, in the sense that it is not possible to trace the amounts that vary from month to month.  The plaintiff also did not show a deposit to her account in relation to the months of April and September 2024.  The pay slips did not include car or travel expenses, and there is no utilization and vacation balances.  In this context, it has not been proven that the plaintiff traveled from Cyprus to work during the days she was abroad, and this is inconsistent with the pay slip.  Finally, the defendant claims that prior to the plaintiff's employment, there was no other employee in her place, and that the plaintiff was not appointed a substitute during the maternity leave.

The Normative Framework

23. Sections 40(b)(1), 49, 50(a), 53(a) and 54 of the National Insurance Law set out provisions regarding the conditions of entitlement to maternity allowance, their rate, calculation, and the income of both salaried and self-employed workers from whom the maternity allowance will be derived.
24. Already about three decades ago, it was determined by the Honorable Justice Flitman (as he was then called) that two basic principles are encapsulated in the payment of the maternity allowance. The first relates to the purpose of the payment of the maternity allowance, according to which it is "an 'income replacement' benefit to maintain the living standard of the working pregnant woman as it was before the birth, for the period of time from the time since she stopped working due to pregnancy or childbirth and until the end of her maternity leave"; and the second relates to the accumulation of the qualification period, according to which "the maternity allowance is not paid for no reason to the insured, but to the insured who is "one of the following: 'an employee or an independent worker'" (Dava 57/0-199 Sigalit Chaikin - National Insurance Institute (November 17, 1998).
25. In the case before us, the core of the dispute in our case, as defined in the pre-trial hearing (pp. 3, paras.  7-9), relates to the question of whether the plaintiff was employed as a lawyer in her husband's office, so that there is an employment relationship between them, or whether she practiced law as an independent lawyer.  On the one hand, in defining "employee" under section 1 of the National Insurance Law, the legislature found it appropriate to clarify that there may be some flexibility in examining employment relations in a family setting.  On the other hand, the language of the definition does not include spouses, such as the plaintiff and her husband, in the definition of "family member".  For our purposes, the words of the Honorable Justice Davidov-Motola in the Lombroso case, according to which "in our case we are not dealing with a 'family member' as defined in the law, and therefore it is ostensibly required to examine the employee-employer relationship without the aforementioned flexibility, but since this is a substantive examination, it is clear that all the circumstances are taken into account, including the characteristics of the business in question and the assumption that when it comes to spouses, there will be no excessive adherence to formal rules" (National Insurance Institute (National) 13710-06-22 Liat Lombroso - National Insurance Institute (July 6, 2023) (hereinafter - the Lombroso case).

Discussion and Decision

26. After considering the arguments of the parties, examining the evidentiary evidence and being impressed by the testimonies heard before me, I came to the conclusion that although this is a borderline case, the claim should be accepted, in the sense that there was an employment relationship between the plaintiff and her husband. I will explain.
27. First, there is no dispute that the plaintiff is a lawyer by profession, and that in her position at the firm she practiced law. Thus, the plaintiff noted in her notice to the defendant's investigator that in her position she is a lawyer for all intents and purposes (paras.  42), deals mainly with cases of bodily injury and road accidents (paras.  26-27), and also works with the National Insurance Institute (paras.  42-44) and with clients' insurance companies (paras.  112-115).  She also noted that as part of her work, she works through the 'Aand Dychnit' program (paras.  114), uses e-mail and regular mail, works on medical documents, including letters to experts on behalf of the court, which she signs (paras.  67-69).  As far as the party in charge of her was concerned, the plaintiff noted that Udi was her direct supervisor (paras.  49-50) and that they had a joint WhatsApp group called "Alturi Law Firm" that was intended for labor matters only (paras.  107-108).
28. In his statement to the defendant's investigator, Udi was asked to describe the plaintiff's role and what a routine day at work looks like, and he replied that she is a lawyer in the firm. In addition, he noted that she works with clients, writes pleadings and deals with all the 'paperwork' of the firm, except for the field of bookkeeping, which is under his responsibility.  He also described that the plaintiff was in a number of medical committees at the National Insurance Institute and in online court hearings.  He also clarified that the plaintiff collects and deposits mail and performs money transfer operations with the trust account at the bank, where she is authorized to sign (paras.  70-75).  He also noted that she enters his schedule into his diary (Q.  102), sends about 10 to 20 emails a day, writes pleadings and affidavits, and works through an "updated" program (Q.  111-118).  In addition, he stated in his statement that he is the owner of the office (Q.  47, Q.  60).  In response to the question of who the plaintiff's direct manager is, he replied, "I.  She already knows how to do everything, she receives a client, she takes the documents, prepares pleadings, submits them" (Q.  91-93).  Udi also noted that the plaintiff has a dedicated WhatsApp group for work matters and that he is careful to separate home from work (Q.  119-121).  When asked what evidence there was that the plaintiff actually worked, he replied emails, WhatsApp messages to and from clients, pleadings, 'updated' software, diary summons and her signature on documents (paras.  164-168).
29. The plaintiff also attached as appendices to the affidavit supporting documents attesting to her practice of law, which were attached to the questionnaire for examining the employee-employer relationship that was submitted to the defendant (hereinafter - the supporting documents), including email correspondence, letters signed by her on office paper, a screenshot from an "updated" program showing documents she wrote in various files, documents she submitted on behalf of clients to the National Insurance Institute, minutes and decisions from court hearings where it was noted that she serves as counsel for one of the parties, etc.
30. In terms of the workplace, both the plaintiff and Udi claimed in their statement to the defendant's investigator that the plaintiff worked from the firm (paras. 57-58 of the plaintiff's statement; paras.  96-97 of Udi's statement).
31. The defendant did not claim in his pleadings that the plaintiff did not practice law, and in the cross-examination he did not question the plaintiff and Udi about her involvement in this matter, except when he asked Udi whether the plaintiff writes all the pleadings in the firm, and the latter replied not all of them but those that he forwards to her (pp. 9, paras.  29-32); and to the question of whether she appears in court, he replied, "There are cases that she appears if I can't appear and there are cases that she doesn't" (p.  10, paras.  3-4).
32. Therefore, there is a positive aspect in our case (Labor Appeal (National) 15868-04-18 Gabriel Kuta - State of Israel Ministry of Justice (April 7, 2021). The plaintiff practiced law as part of her work, subject to Udi's supervision, when the plaintiff performed her work from the firm itself using the means given to her and thus integrated into the core of the firm's activity.
33. Second, I found that the negative aspect did not exist in the plaintiff's case. This is because the plaintiff's integration into her work in the firm was not done through her own business (which, as stated, was closed about a month after it was opened (pp.  6, paras.  17-20), since she had difficulty meeting the requirements involved (paragraphs 27-28 of the plaintiff's affidavit).  In addition, the plaintiff did not bear the risks of the business and did not benefit from efficiency, inter alia, because her salary was paid according to working hours and not according to fees per case.
34. In this context, the defendant's argument that the plaintiff's conduct characterizes her as independent should be rejected. In the circumstances of the case, the characteristics noted by the defendant do not include the publication of the telephone number on the firm's logo; conducting negotiations with clients, closing fees and receiving clients; and signing legal documents on her behalf - in order to show that the plaintiff practiced law independently, since they can be seen as inherent characteristics of her work as a lawyer in a private firm.  It should be noted that with regard to the signature on her behalf, the defendant referred to an email correspondence regarding a client with Clal Insurance and Finance (p.  36 of the plaintiff's affidavit).  It is not clear why this correspondence, which does not contain the plaintiff's signature at all, serves the defendant's argument.  In any event, a review of the supporting documents and not only the specific page to which the defendant referred does not support his claim, since it appears that the e-mails are sent through the firm's common address; its signature shows the name of the firm; and even a letter signed by it is written on the firm's letterhead.
35. Other characteristics that the defendant noted to substantiate his claim that the plaintiff acted independently did not go unnoticed. As to the question of whether the plaintiff is authorized to sign and authorize the bank account, there is indeed a difference in the plaintiff's versions, when in her message to the defendant's investigator the plaintiff answered in the affirmative to both questions (paras.  70-73), but in the affidavit she claimed that she was not authorized to sign in the business account (paragraph 29 of the plaintiff's affidavit), and even in her cross-examination she said that she was not authorized to sign (pp.  8, 33-34).  Udi's version was consistent, since he said in his notice to the defendant's investigator that the plaintiff was authorized to operate in the trust account (paras.  89-90), and also in his cross-examination he said that to the best of his recollection she was authorized (pp.  9, paras.  13-14).  In addition, the plaintiff said in her notice to the defendant's investigator that "we" were renting the firm (paras.  58); and when she was asked about this in her cross-examination, she corrected it and said, "He rents the office" (p.  8, paras.  17-21).  Admittedly, such signing and power of attorney authorizations, as well as the hiring of the office, may constitute characteristics of independent work.  However, whether or not the plaintiff is given such authorizations; And whether the plaintiff and Udi rent the firm together or whether Udi rents it alone as the owner of the firm and there was a wording error in her words, in any event, an examination of the totality of the circumstances of the case indicates that the plaintiff's work was not done independently and that there is no negative aspect in her case.  In my opinion, these two characteristics, insofar as they existed, do not tip the scales.
36. Third, the plaintiff's work was performed in exchange for a salary. In the claim form for payment of maternity allowance, the plaintiff stated that the scope of her work is full-time, on Sundays through Thursdays, at varying hours according to the urgency of the work (section 11, n/1).  In the questionnaire for examining the employee-employer relations, it was noted that she worked "all days of the week, Sunday-Thursday, most of the hours from 8:30 to 16:00" (section 3, p/2).  In her statement to the defendant's investigator, the plaintiff claimed that she does not start her work at the exact time but rather at 08:00-09:00, and ends it at 4:00 p.m.  when her home is picked up from the framework, while Udi's mother picks up the child and she can work more or less, depending on the need (paras.  51-54).  In Udi's notice to the law, the defendant was asked what the scope of the plaintiff's job was, and he replied, "At first a part-time position, there are no fixed days, but it starts at 08:00 and I don't know when it finished, after about a month or two, Sandy moved to a full-time position, Sunday-Thursday at 08:00 or 08:30 and until 17:30 and sometimes even more, depending on the job" (Q.  71-74).  In her cross-examination, the plaintiff claimed that she works from 08:00 or 08:30 until 4:00 p.m., when her working hours are not fixed in the sense that she sometimes works more or less hours, depending on her children in the kindergarten, and sometimes she asks Udi's mother to pick up her children and thus works until 5:00 p.m.  (p.  5, s.  33 - p.  6, s.  2).
37. On the issue of the manner in which the plaintiff's working hours were monitored, the plaintiff claimed in her notice to the defendant's investigator that no recording of working hours and days had been made, and noted that the 'Updated' system had documentation of the documents she had handled (Q. 55-56).  She was also asked how her working hours were calculated and replied, "I more or less know what I work, there are times when I work overtime" (Q.  90).  In Udi's message to the defendant's investigator, the latter noted that the office does not have an attendance clock.  In response to the question of whether there is any documentation regarding the working days and hours, he answered in the negative, noting that documents are filed in the "Updated" software (paras.  40-43).
38. In order to calculate the salary of the plaintiff, who earned an hourly wage, it was necessary to record the scope of her work hours every month. In her cross-examination, the plaintiff was asked why the pay slips show different amounts if she worked every day from 08:30 to 16:00, and she replied, "I did not say that I work exactly by the minute, but that it depends on hours, an hour less, two hours yes two hours less" (pp.  6, 29-31), and in response to a question about a "jump" of almost 50% between pay slips, she replied, "There are days when there were no overtime, obviously" (pp.  6, paras.  32-33).  She was also asked, "You have to tell your boss that you deserve this and that.  Do you have record hours?" and she replied, "No, there aren't.  It's more or less but he knows enough how much I work and there's a program per minute" (p.  6, 36 - p.  7, 1).  Udi was also asked about this in his cross-examination:

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