What will and what will not constitute “ha-ra’at te’naim” (deterioration in an employee’s terms and conditions of employment)?

What Will and What Will Not Constitute Ha-ra’at Te’naim
(a material deterioration in an employee’s
terms and conditions of employment, entitling him to severance pay – pitzuyei pituin – if he terminates his employment)?

“A person who has been employed continuously for one year… by the same employer or at the same place of employment and has been dismissed is entitled to receive severance pay (pitzuyei piturin) from the employer who has dismissed him.”
Section 1(a), Israeli Severance Pay Law, 5723-1963

“Where an employee resigns by reason of an appreciable deterioration of his conditions of employment (ha-ra’at te’naim)…
the resignation shall, for the purposes of this law, be deemed to be
dismissal”
Section 11(a), Israeli Severance Pay Law, 5723-1963

Generally speaking, the Israeli Labor Courts are sympathetic to claims for severance pay on the grounds of ha-ra’at te’naim. However, the following points should be noted:

1) The law speaks about an “appreciable worsening” of terms and conditions of one’s employment, which are introduced unilaterally and without the employee’s consent, such that the employee cannot be expected to continue in his work.

2) Certain conditions must be satisfied in order to be entitled to receive full severance pay. These include giving the employer an opportunity (via notice in writing which explicitly identifies the ha-ra’at te’naim in question), to rectify the ha-ra’at te’naim and stating that if the depreciation is not rectified, the employer should regard this notice as a letter terminating the employee’s work, which will enter into force within a given period of time (e.g. 14 days).

3) Timing is also important – the employee must convey his objection to the ha-ra’at te’naim, immediately upon or proximate to their occurrence, as failing to do so, will deem the employee to have agreed to the new terms and conditions.

What will generally be regarded as ha-ra’at te’naim – and what will not?

The usual cases of ha-ra’at te’naim include lowering an employee’s work load or delaying paying his/her salary on a regular basis. The Labor Court has recognized that an employer’s injurious and denigrating attitude towards his employee can also constitute ha-ra’at te’naim. Worse conditions relative to those that appear in one’s employment contract will likewise be regarded as ha-ra’at te’naim.

A change in the employee’s hours of employment could well be regarded as ha-ra’at te’naim. Thus, for example, when the employer is aware that the number of hours of employment have been agreed in advance, such a change might well impede the employee’s ability to attain additional income or to fulfill other obligations.

Likewise, a material change in the scope of the employment which can be proven might constitute ha-ra’at te’naim.

Finally, where one’s professional status has been changed in an extreme and serious manner, without any connection to salary change, whether for better or for worse, this too will constitute ha-ra’at te’naim.

However, not every change will constitute ha-ra’at te’naim. As we have already noted, the change must be an appreciable change for the worse – not merely minor, which is not consistent with labor laws and/or with the employee’s work conditions in force until the change. The change must impact on the employee in an appreciable manner.

Thus, while negating an employee’s entitlement to his salary cannot be legally enforced, the courts have determined, however, that when there occurs a change of arrangements and procedures in one’s employment – where such change has not been implemented in order to adversely affect the employment terms and conditions or for invalid reasons – this will not be regarded as an appreciable worsening of the employee’s conditions of employment.

Moreover, severance pay is not granted automatically by the courts – in many cases, the courts have determined that at times the employee has been too quick to resign, solely in order to gain entitlement to severance pay. However, where the courts are convinced that the reason for resigning indeed emanated from ha-ra’at te’naim, and that a causal link exists between the terms of the employment and the resignation, the employee will be entitled to receive severance pay.

Because severance pay cannot be guaranteed in cases of resignation, an employee whose terms of employment have changed for any reason can notify the employer that there has been an appreciable depreciation in his conditions of employment according to the law, and request that the employer retract these. Alternatively, he could continue to work as usual and at the same time sue the employer in the Labor Court.

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Simon M. Jackson is a practising attorney, notary and professional translator in Israel. His specialized areas of practice include contracts (including rental and employment agreements), real estate transactions, commercial law (companies, partnerships, amutot-NPOs), wills and successions, and professional translations (notarized translations a specialty). Simon writes an active blog (http://www.jacksonadvocates.net/category/blog) about contemporary legal issues, Hebrew language gems and Torah insights. Simon can be contacted in any of the following ways:

Direct Dial: 0737-40-60-40
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