Legal Updates

An employee who continued to work after deterioration of the terms of employment will be deemed after a few months as one who agreed thereto

November 6, 2020

An employee worked for a company and was entitled under the agreement signed with him to sales commissions on a quarterly basis from the company's sales as well as to a bonus for investment in the company by external investors who are not existing shareholders in the company. The company initially paid commissions higher than the employee's own sales but at some point stopped doing so and only paid for sales that the employee made himself. After the termination of the employment, the employee demanded the difference in commissions.
The Labor Court held that the employee is not entitled to commissions from all of the company's sales due to the change in the agreement by conduct. In order to change a material condition in an employment agreement, the consent of both parties to the agreement is required. However, when the employer adversely changes the terms and the employee protests the change but does not file a claim and does not resign, after several months of such conduct the employee is deemed to have agreed to the new terms of employment. Here, the company stopped paying the employee commissions beyond the sales he created and the employee protested, but despite this, for two years he continued to work under the new terms and is therefore deemed to have agreed to update his terms of employment.