Legal Updates

When an employee is a partner in a certain project and is not entitled to salary therein a clear distinction need be in place

October 26, 2016

An employee filed a claim for payment of full rights due to disconnection of employer-employee relationship. The employer argued that it was agreed that the employee will be a partner in a joint venture of the employer and the employee and for activity will not be an employee but a partner sharing profits and losses.

The Court held that in case of a dispute as to whether the employee is a partner or an employee for a certain project the employer need prove that there was a clear distinction between the status of the employee as an employee and his status as a partner. Here, the employer did not prove the existence of a partnership that would enable the conclusion that the employee's work was not carried out as part of his work as an employee of the employer but as part of the partnership and thus the employee is entitled to payment of the salary.