An employee demanded from his employer rights arising from his work for it, despite a partnership agreement signed between the parties before starting his work.
The Labor Court accepted the employee's contention because in practice the employee was not a partner in the partnership that managed the business in which he was employed. The existence of a partnership is conditional upon the fulfillment of three main conditions, among which is the joint management of a business. The existence of the partnership will be examined under the essence of the relations that actually existed and not according to the relations that the parties sought to establish. Here, despite the intentions of the parties who signed the partnership agreement - to have a partnership between them for the purpose of managing and operating a business - at the end of the day, as far as the employee's share in the partnership is concerned, the provisions of the partnership agreement were not perfected and did not go into effect, all the substantial decisions of the business, including that of its liquidation, were accepted by the other two partners without the employee's participation and therefore the precondition of joint management of the business was not met. Therefore, the essence of the relationship in practice was not that of a partner in a partnership but rather that of employee - employer and hence the employee is entitled to the resulting rights.