Waiters employed at the luxury restaurant "Segev" received their salary from a shared tips pool. In 2019, the restaurant unilaterally decided, without the employees' consent, to deduct 20% from the tips to fund social benefits and related contributions. The employees objected to the change and even took organizational steps to oppose it.
The National Labor Court held that the change to the agreement was unlawfully made and therefore, the employees are entitled to compensation. An employer may unilaterally implement changes to work arrangements without the employee's consent. However, any change to the detriment of employee’s terms and conditions of employment requires the employee’s consent, without which it may constitute a breach of contract. Generally, an employer may use tips money only to pay employees' salaries and is not allowed to deduct sums from it to cover expenses or liabilities, including social benefit contributions. An exception may be made by formulating a deviating contractual clause, which validity depends on the employee's explicit and informed consent. Here, the clause in question is a deviating contractual clause that touches the core of the agreement and requires full permission for the change. Not only did the employees not give explicit consent to the change, but they also did not sign new contracts and even took steps to oppose it. Therefore, the deductions from the tips were made unlawfully and the employer is to compensate the employees.