In accordance with the provisions of the employment agreement, Beitar Jerusalem football players who were employed under termed contracts did not receive severance pay after their employment agreement was not renewed at the end of their employment term.
The Labor Court accepted the employees' contention and held that the agreement cannot supersedes the provisions of the law. An employee employed under a termed contract is considered to have been terminated at the end of that term unless the employer offered him/her to renew the employment agreement. However, the parties may agree that the salary already includes the severance compensation component, provided both of the following two conditions are met: this agreement is stipulated in the employment agreement and that agreement was approved by the Minister of Labor or someone authorized by it. Here, the agreement, that the salary includes severance pay, was stipulated in the employment agreement, alas the agreement was not approved by the Minister of Labor. Therefore, the second condition was not met and the employer must pay severance pay to those employees whose employment period has ended and were not offered to renew the existing employment agreement.