A CEO of a company demanded ILS 1,000,000 contending that he was orally promised a retirement bonus of such amount. The company refused to pay, contending that the parties discussed the grant as contingent on the completion of the purchase of the company by another preapproval by the board of directors.
The Labor Court rejected the claim and held that under law the setting of the terms of the CEO's employment require board of directors approval. When an agreement requires consent under law, it is presumed that acceptance of consent is a condition precedent, i.e., a condition without which the agreement does not enter into force. Moreover, a distinction must be made between a promise and a situation in which "effort" is promised, i.e., that the promise depends on a preapproval. When the employee was promised that the grant issue would be brought for approval of the board of directors, the employee could not have relied on the promise when such an approval was not given.