An Overview of Israeli Contract Law- Shani Oppenheimer
Israeli contract law, particularly regarding employment agreements, is crucial for ensuring a clear and fair relationship between employers and employees.
In Israel, employment law governs contracts for both Israeli citizens and foreign workers with valid work visas. There are two main categories of employment agreements, differentiated by their duration and termination clauses:
Indeterminate contracts, also known as contracts for an unlimited period, are the most common type of employment agreement in Israel. These contracts don't have a pre-defined end date and continue indefinitely until terminated by either party. An indeterminate contract can be terminated by either the employer or the employee with proper notice. The specific notice period may be influenced by collective bargaining agreements that apply to certain sectors. Fixed-term contracts specify a predefined duration of employment, tied to a specific project or timeframe. These contracts automatically terminate at the end of the designated period, without requiring notice from either party. Renewals: Fixed-term contracts can be renewed upon mutual agreement between the employer and the employee. However, restrictions exist to prevent employers from continuously renewing fixed-term contracts to avoid obligations associated with indeterminate contracts. Early Termination: If an employer terminates a fixed-term contract prior to its expiry, the employee may be entitled to damages equivalent to the salary for the remaining term.
Israeli law mandates the signing of a written employment contract within 30 days of an employee's start date. The contract should outline key details to clarify the expectations and obligations of both the employer and employee.
Basic Information
Employee and Employer Identification: This section includes the names and contact information of both parties involved in the agreement.
Job Title and Description: This section outlines the employee's role, responsibilities, and reporting structure.
Commencement Date: This clause documents the official start date of employment.
Compensation and Benefits
Salary: This section specifies the employee's base salary, including details on payment frequency (e.g., monthly) and method (e.g., bank transfer).
Overtime: If applicable, the agreement outlines the terms of overtime pay, including rates and calculation methods.
Benefits: This section includes details on additional benefits like health insurance, vacation days, sick leave, and pension contributions. These should comply with minimum standards mandated by Israeli law.
Work Schedule and Leave
Working Hours: This section defines the standard work week, including daily working hours and any breaks included.
Vacation and Sick Leave: The agreement specifies the entitlement to paid vacation and sick leave days according to Israeli legislation.
Termination
Notice Period: This clause outlines the required notice period for termination by either the employer or employee.
Grounds for Termination: The agreement can specify reasons for termination considered a breach of contract by either party.
Changes in an employee’s job description are sometimes necessary due to evolving business needs or shifts in company strategy. Here’s how to go about these changes:
Consultation and Agreement: The employer should consult with the employee regarding the proposed changes. This ensures transparency and helps in securing the employee’s agreement.
Written Amendment: Any changes to the job description should be documented in writing. This can be done through an addendum to the original contract, clearly outlining the new responsibilities and any related adjustments in compensation or working conditions.
Reasonable Notice: Provide the employee with reasonable notice before implementing the changes, allowing them time to adapt or voice any concerns.
When to Draft a New Contract
Significant Changes in Role: If an employee is promoted to a significantly different position with new responsibilities and a different compensation structure, a new contract is advisable to reflect these substantial changes.
Change in Employment Terms: When there are fundamental changes in employment terms, such as transitioning from part-time to full-time status or from temporary to permanent employment.
Legal Compliance: To ensure compliance with new labor laws or regulations, a new contract might be required to incorporate these legal changes.
Mutual Agreement to Re-contract: Sometimes, both parties might mutually agree that a fresh contract is the best way to clearly outline their current expectations and responsibilities.
