Legal Updates

‎‎‎‎‎‎‎‎Purchaser of company’s activity will bear past social benefits payments even if otherwise agreed in the ‎acquisition agreement‎

July 4, 2017

In a transaction in which all assets of an active company were purchased, all employees were terminated and received severance pay.  A pregnant employee, at the beginning of her pregnancy, was rehired by the purchaser but terminated after two weeks.  The employee contended that she is entitled from the selling company and the purchaser to compensation and full salary until two months after she gave birth although worked at the purchaser for only two weeks.

The Labor Court rejected the employee's claim against the company and partially accepted the claim against the purchaser and held that when a company's activity is acquired, the employees' connection to the workplace is maintained if they remain in the same place of work and do the same activity. Because it is the same "place of work" the purchaser cannot evade its obligation to pay the full social rights of the employees even if expressly agreed otherwise in the acquisition agreement between the parties.  Thus, the employee is not deemed to have worked only two weeks but a long period justifying employee pregnancy rights.