Legal Updates

Review of whether an employee position is a trust position not encompassing payment for overtime is pursuant to the circumstances and not the name given to the job

April 23, 2020

In a family company, held by two brothers both over 70 years old, a conflict broke out between the brothers. The son of one of the brothers, who served as a manager in the company, demanded that the company pay him about ILS 725,000 for overtime.
The Labor Court dismissed the claim because the employee worked in a trust position and was therefore not entitled to overtime compensation and even required the claimant employee to pay legal expenses of dozens of thousands of shekels. The law dealing with employee working hours does not apply to employees in managerial positions or positions that require a special degree of personal trust or those whose working conditions and circumstances do not allow the employer any supervision over their working hours and rest. The name given to a particular role in the company (senior/professional manager/regional manager) is not the determining factor but the true nature of the role (based on the company's special circumstances). For example, location in the organizational hierarchy, does the role consist of involvement in setting policies and application of independent discretion, wages and working terms, whether the employee is required to be available to the employer during non-routine hours or work without a fixed working time frame, does the employee have access to sensitive company information which is shared by few, and more. Here the employee managed projects independently, made orders, attended management meetings, was a signatory of the company, negotiated with suppliers and even handled employee hiring and dismissal and is thus a manager in a position of trust and is not entitled to payment for overtime.