- Amendment to the Male and Female Workers (Equal Pay) Law – Corporate duty to report:
Amendment No. 3 to the Male and Female Workers (Equal Pay) Law has entered into effect recently. This Amendment imposes on entities that are subject to a reporting duty regarding the wages of workers or officeholders – a duty to also refer to gender.
This means that where a reporting duty attaches to an entity regarding the wages of the employee or an officeholder, that entity is required to make reference also to the employee’s or officeholder’s gender, due to the legislator’s intent to increase transparency in such matters.
This duty applies to the following entities:
- A budgeted or supported entity as defined in the Budget Fundamentals Law, in section 33 of the Law, namely a body corporate that has been set up by, or in whose budget, the government participates, or a body corporate that has been prescribed by statute to be a supported entity, and includes local authorities, religious councils, the Bank of Israel, government companies and municipal company.
- A non-profit society that has been set up pursuant to the Non-profit Societies Law, 5740-1980, in the framework of the annual financial statement that it is required to issue.
- Everybody corporate whose securities have been issued to the public according to a prospectus or are traded on the stock exchange, and to which there consequently apply the Securities (Periodic and Immediate Reports) Regulations, 5730-1970. That is to say, the Amendment applies to every public company.
- All water and sewerage corporations whose function is to provide a public service, and to which in consequence, the Water and Sewerage Corporations (Periodic and Immediate Reports) Rules, 5770-2010 apply.
- New Extension Order in the Cleaning Industry:
Many companies throughout the economy regularly outsource cleaning and maintenance services contractors on their premises.
Necessarily, the payment charged by the cleaning and maintenance contractors for their services derives, inter alia, from the cost of their employees’ wages.
The Minister of Finance signed an Extension Order to the terms of the general collective wage agreement in the cleaning industry on 11 July, 2013, ruling that from 1 March, 2014 onwards (subject as hereinafter provided), the terms of the agreement as extended will apply to all workers employed in cleaning or maintenance work by employers in the cleaning or maintenance industry (hereinafter: “the Extension Order”). The Extension Order enhances the pay and fringe benefits of cleaning and maintenance workers (that will, for convenience, be jointly referred to as “Cleaning Workers”) and is thus expected to significantly increase the costs of their employment – such increase will be in excess of 20% simply due to the direct wage costs for an employee in the first year. As a result, the expenses of the outsourcing service-customer are expected to rise.
Note that according to the terms of the Labor Law Increased Enforcement Law, 5772-2011, the outsourcing service customer is responsible for not entering into an engagement on terms which can cause financial loss to the cleaning contractor and thus will be liable under a duty to take reasonable measures to prevent the erosion of the Cleaning Workers’ rights that work at his premises.
The Extension Order increases the minimum wage in the industry to NIS 24.98 per hour, provides entitlement to an advanced training fund (as from 1 October 2014) and to a seniority increment, grants privileges in excess of the provisions prescribed by statute relating generally to annual vacation, sick leave and holiday allowance, provides for beneficial pension rights (up to 22.83% of the contributions that will also reflect the holiday allowance, increments for overtime and travelling costs) and more.
In addition, the Order prescribes the rights of Cleaning Workers when employers change (substitutions of cleaning contractors by the service customer).
It is important to note that there is no obligation to transfer any payment to the cleaning contractor to cover the cost of accrued vacation, accrued holiday allowance and/or contributions to severance pay which have accrued to the credit of the employees in the past. Having said that, from now on, the terms of the Order in all the matters described therein must be complied with.
- Update of the value of the maximum daily travelling costs
An Extension Order has also been published regarding the employer’s participation in employee’s travelling costs, which updates the reimbursement rate of the travelling expenses from 1 January 2014 onwards, retroactively to a maximum amount of NIS 26.40 per working day.
We would mention that the duty to pay for the reimbursement of travelling expenses shall be in accordance with the employee’s actual expenses up to the maximum amount mentioned or the monthly cost of a monthly travel card (‘Hofshi hodshi), the lower of the two.
The remainder of the Extension Order Rules remain unchanged.
- New judgment clarifying the activity framework and power of the Commissioner of the Women’s Labor Law
We would remind you that an absolute prohibition applies to the dismissal of a female employee who is pregnant during the period of her pregnancy, maternity leave and during the period following the employee’s return to work (hereinafter: “the Protected Periods”). There is however an option of filing an application with the Commissioner of Women’s Labor Law to allow the dismissal, there being no other method to dismiss such an employee until after a permit has been received.
The Commissioner, in her general overview of the benefit of the employee, does not easily permit the dismissal of a female employee during the Protected Periods, and on many occasions, determines in her decisions that although dismissal is permitted, it will only enter into effect on a date falling after her decision, that is, on the date on which the employee begins maternity leave.
The Labor Court recently handed down a new judgment per the Honourable Justice Ariela Gilzer-Katz in Labor Case – 3727-03-13 Yaniv Marketing Strategies Ltd., v. Naama Gur Ari, that was brought against a decision of this kind.
In that case, the employee was in the seventh month of her pregnancy. The Commissioner determined that she was persuaded that the employee’s dismissal had not resulted from her pregnancy and affirmed the dismissal but only from the date of the employee beginning maternity leave, namely, some two months after the making of the decision.
The parties have appealed the Commissioner’s ruling.
Two rulings were held in the judgment:
The first – in the framework of making a decision with regard to the dismissal of an employee who is pregnant, and which does not result from the pregnancy itself, the Commissioner is entitled to consider other factors – namely, the employee’s condition, but such considerations are subject to increased judicial review and the interests of the female employee are not specifically to be preferred as against those of the employer, and the employer need not act as a “deep pocket”.
Secondly – rulings that recur in the Commissioner’s decisions to the effect that the employee will remain at work until she takes maternity leave, are unlawful and are inconsistent with the provisions of the Women’s Labor Law, and in the framework of the decision, the Commissioner has three options only: to permit the dismissal on the date of the decision; permit the dismissal retroactively or not permit the dismissal at all.
We believe that these rulings are material and could clarify the working framework of the Commissioner and her power.
For additional information please contact Yael Dolev, Partner, Head of Labor Law,
Tel +972 (3) 6074800 email yaeldolev@gkh-law.com.
