Making Up for Unpaid Employment Benefits – part II | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The defendant (=def) is an NPO that runs various educational institutions, including the one that the plaintiff (=pl) started to head in 5769. Soon after pl started, def ran into financial difficulties, and in a meeting of heads of def’s programs, many heads agreed to cuts in salary to keep institutions open. Pl is now, after a few years, suing for the following matters: 1. The reduction in salary, which they forced on pl. 2. D’mei havra’ah (recreational payment) for 3 years, part of which def agrees to. 3. Loss of special rights that pl had with a pension fund, which he lost when def delayed payment to the fund, as promised and despite warning. 4. A percentage of the fundraising sums he raised on trips abroad, which def promised pl he would receive but did not give him (22,868 NIS). Def’s specific claims we will see next to each subject raised, but two general claims were: statute of limitations and mechila (relinquishing rights).

Ruling: Last time we dealt with reduction in salary and d’mei havra’ah.

P'ninat Mishpat (803)

Beit Din Eretz Hemda - Gazit

649 - Making Up for Unpaid Employment Benefits – part I

650 - Making Up for Unpaid Employment Benefits – part II

651 - Making Up for Unpaid Employment Benefits – part III

Pension fund: Previous to pl’s employment at def, he would pay the pension fund personally and when pl started working for def¸ def took it on like other pension payments. After def stopped payments due to their difficulties and the fund sent warnings to pl, def’s director told pl something to the effect of "Don’t worry; it will be fine." Although eventually def made the payments (which is what def says the director meant), pl’s loss in benefits is 35,179 NIS (calculated by an actuary).

No matter def’s director’s exact wording and intention, he violated lifnei iver (giving bad advice – see Rambam, Rotzeiach 12:14), as he had no reason to be confident that paying when def would get around to it would be fine. If they could not pay, they should have told pl, "Pay yourself, and we will reimburse."

Regarding financial compensation for such cases, the Shulchan Aruch (Choshen Mishpat 306:6) rules that one is obligated if he gave the advice either for a fee or he is not an expert in the field, but only if the recipient made it clear that he was relying on the advice giver. In this case, def is clearly not an expert in pension funds. It is not fully clear that def knew he was being relied upon, but the stronger implications are that they did or should have known. Therefore, we will make them pay 80% of the damage (but def has the right to bring an alternative actuarial calculation).

Def argues that since pl originally claimed the other elements and not this one, it shows that he was mochel (relinquished rights to) this claim. Beit din rejects this argument. Had def paid all of the other elements, then one could say that the claim he did not make was left out due to mechila. However, it is possible that the matter was a package deal ("pay the basics and you won’t have to pay for damages"), and since def refused to pay, pl can now demand everything. Mechila either needs to be explicit or clear, but inconclusive lack of action is not considered mechila.

P'ninat Mishpat