Adv. Moshe Kahn
(published in Ma’ariv Business)
Quietly, and without receiving the appropriate media attention, a new reality is developing in Israel regarding labor relations, which is breaking the delicate balance that had existed from time immemorial between employers and employees. This is a real revolution that shall soon affect all employers in the Israeli market.
In recent years, we have witnessed a process of new and extensive legislation in Israeli labor law. Alongside the appropriate protection granted by the new laws to the weaker working population, this legislation places an unreasonable and unjustified burden on employers and on those using the services of contractors. It sometimes seems that in its desire to protect the employee, the Israeli legislature is acting as if the employee is an infant having no mind of its own and who requires parental and constant supervision and protection, while the employer is a ruthless and exploitative robber who is trying to rob his helpless employees. Obviously, things are quite different in practice.
This legislative process reached its peak with the enactment of the new Law for Increased Enforcement of Labor Laws, which was recently passed in the Knesset.
This Law will, inter alia, allow inspectors on behalf of the Israeli Ministry of Industry, Trade, and Labor to impose monetary sanctions on employers suspected of violating Israeli labor laws. In addition to imposing monetary sanctions, a list of employers who had violated the law shall be published in the pillory column of the Ministry of Industry, Trade and Labor’s website, all this without the employer’s case being heard before a judicial instance, but only based on the decision of the inspector of the Ministry of Industry, Trade and Labor.
As if this were not enough, the new law goes even further and provides that the imposition of monetary sanctions shall not exempt the employer from the risk of future criminal prosecution for the same offense.
According to the new Law, entities ordering services from contractors engaged in cleaning, guarding, and security, are made responsible for the fulfillment of the contractor’s duties to its employees.
The result of this new situation is that an offense of most of the provisions of the Israeli labor laws now constitutes a criminal offense – on the part of the employer companies and sometimes also on their managers.
In the agreement between the Finance Ministry and the Israel National Labor Federation, it has recently been agreed to add 120 inspectors to the Ministry of Industry, Trade, and Labor. These inspectors shall be in addition to the manpower already existing in the Ministry of Industry, Trade and Labor which today perform inspections for enforcing Israeli labor laws in workplaces, often without advance notice.
We see the growing criminalization of labor laws, forcibly turning the employers and their managers into criminals. Basic principles such as freedom of contractual engagement and presumption of innocence are pushed away by the principle of protecting the employee’s rights.
How is it possible that a small business owner who has not paid his employees on time due to financial difficulties he is encountering, faces criminal charges, is punished to the fullest extent of the law, or, at best, forced to pay a high penalty and published in the public pillory column, whilst a tycoon who has not paid debts of billions to debenture holders of a company controlled by him, is absolved thereof?
It has recently been published that the Ministry of Industry, Trade, and Labor had brought criminal charges against a company, claiming that the company had conspired against an employee who had complained that her rights had been infringed upon. According to the company, the employee was dismissed as part of a streamlining effort.
Was it really appropriate to hear this dispute within criminal proceedings? Are we not turning normative people into perpetrators and criminals, without justification?
Are we not encouraging employees facing dismissal to file complaints against their employers and thus acquire “immunity” from dismissal?
It seems that we cannot undo what has already been done. The legislation exists and it is not about to be changed soon.
All we can do is be prepared for the entry into force of the new Law and hope that the enforcement officials at the Ministry of Industry, Trade, and Labor will act with discretion and proportion in operating the new enforcement measures which will be available to them and that the Israeli courts will not rush to prosecute these new “criminals”.
May 2012
* Adv. Moshe Kahn specializes in Business Law. He is licensed to practice law both in Israel and in the U.S. and is the founder of the Moshe Kahn Advocates law firm in Tel Aviv
