A director and a controlling shareholder of the company filed a claim asking the court to recognize him as an employee of the company and to grant him all the rights to which he is entitled to as an employee, for the services he provided to the company as a director. The court held that in order to determine the nature of the relations between the parties and to determine whether labor relations existed between them, it is not sufficient to determine the agreements between the parties. Also, a director acting only as part of his position on the board, and even if he receives any compensation for that service, is not considered as an employee of the company. Since in this case the director failed to prove by the combined test that there are indicators that he is an employee of the company (since this was not his only job, since he did not have an office in the company, and many other indicators), the court rejected the claim.
Published in Afik News 231 24.05.2017
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