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Based on ruling 69053 of the Eretz Hemdah-Gazit Rabbinical Courts

Case: The plaintiff (=pl) worked at the defendant’s (=def) factory for close to two years. While pl was in miluim (reserve duty), he received a call from def informing him he was fired. Pl refused to accept the firing, which is forbidden during miluim and without warning. After miluim, pl returned to the factory but did not actually work. Def explains that he found out that pl had been agitating against him with other workers and fired him immediately out of anger. Upon realizing it was illegal, he told pl that he would pay him but not allow him to work. Pl is suing for payment of severance pay and for lack of warning, in addition to pension, vacation pay, and recreation pay. Def says that the workers know that he cannot afford mandated social benefits and that he tries to make it up to the workers by giving raises and other benefits when he can (pl did receive payment in this manner).

P'ninat Mishpat (801)

Various Rabbis

505 - Removing a Less than Honest Rabbi – part III

506 - Worker’s Benefits

507 - Fallout from Underground Encroachment – part I

Ruling: Halacha requires an employer to come to an agreement with his workers over wages and benefits before they begin working. Ahavat Chesed (at the end of the first section) explains that when he fails to do so, he leaves the door open for disputes and feelings that the other side "stole" from him. In this case, beyond the per-hour wages, def did not come to an agreement with his workers over benefits. This is improper, and we recommend that he reconsider this in the future.

In such cases, the sides are supposed to follow the local practice (Shulchan Aruch, Choshen Mishpat 331:1-2). The Rama (ad loc.) adds that something is considered local practice only when the situation comes up regularly in society. R. Akiva Eiger claims that if the custom was decided by an important authority, then it is binding even if the situation does not arise often.

In our times, most batei din rule based on the Israeli labor laws. These are valid according to dina d’malchuta, and even those who do not normally apply that rule broadly, agree when the laws form the basis of the standard local practice, which indeed they do in our days. It does appear that in this case, pl was aware at some point that he was not going to get full worker’s benefits, as is evident from the fact that he did not demand paid vacation until he was fired. Nevertheless, since the law requires certain payments and sets the standard, def should pay them.

We are to view the cessation of pl’s work as firing, even if pl was offered a salary in the meantime, because such an unnatural set-up is considered taking away from one’s work conditions, which is equivalent by law to firing. Therefore, pl will receive 1.75 monthly salaries as severance (a month’s salary per year). We exempt def from payment of paid vacation and recreation because it does seem that pl got raises he was not required to receive in lieu of such payments. Expenses of adjudication will be shared equally by the two sides.

P'ninat Mishpat