Employment Contracts: To Sign or Not to Sign?

by Tzvi Szajnbrum, Attorney at Law

You are about to sign your first contract with your new employer. This is your first real job in Israel? Wait: Do you really understand the intricacies of this contract? Is the language clear to you?

The Language:

For some reason, hi-tech companies prefer contracts in English. This is very “user-friendly” but if for any reason you have to go to court regarding the contract, it will not be accepted in court in English and you will need a Hebrew version.

It is better to have a Hebrew version signed and a translation for you.

Your Basic Rights:

If you do not find the basics in the contract, such as severance pay, etc., do not worry for a second. These basics are protected by law in such a way that you can never lose or even waive your rights (the paternalist approach of the Israeli law).

The Contract Period:

It is common practice to have “open-ended contracts”, meaning the starting date is stated but not the ending date. It is legal to have an employment contract for only a limited period of time – in which case the termination is agreed upon in advance.

Early Departure (for all kinds of contracts):

It is possible that the employer will impose “sanctions” on an early departure within the established period (even when the contract is an open one with no termination date set in advance). In this case, the agreement should be examined carefully. Think about the meaning and consequences of such a commitment. Is it worth it? Are you sure you won’t move to another city? Commuting could be difficult and you could find yourself having to give up this job – what now? Sanctions or penalties could be “bad news” for you.

There is also “good news”: If the agreement specifies a penalty for early departure, even then it is not certain that this clause is valid and can be enforced in court! It is up to the Honorable Judge to decide and each case is unique.

A Word of Wisdom:

Do everything you can to not agree on these kinds of sanctions/penalties. The new job may be very tempting but as a new immigrant you never know if you won’t have a “special need” causing you to move or make other changes. I have seen this too many times, therefore I suggest this: Avoid signing a contract with that kind of limitation because the last place you want to find yourself is in court trying to convince the Judge.

More Limitations:

If you will be working in a “special field” or on a “special project”, there is a clause of no other work permitted during the period of employment/contract. Do you really mean not to be working on something else? Are you sure you are not already working on something else? Even as a freelancer or as a volunteer for another company or organization? This type of limitation could cause big problems for you.

Very often the limitations imposed are not only regarding the specific work you do but any other work you may want to do in your free time. This is the “total devotion to work approach”.

Clause 14 – A Limitation or an Improvement?

If you have agreed upon this clause giving you the right to receive severance pay regardless of the reason for termination of the contract (quitting or being fired) it could be “good or bad news” – it depends and can be a catch 22 situation.

The Good news:

If you quit after a few years because you find a better job or because you don’t get along with your boss anymore or any other reason, you will still be entitled to receive severance payment. Yes! There is such a thing but wait…

The Bad news:

Many employers, despite the law and their obligation to deposit your pension in any kind of “fund” (insurance company, bank, etc.), disregard the law. And not only that, they do not pay their share into the fund every month, but do deduct your share from your salary without transferring it to the fund!

The consequence:

Let’s say you have worked for ten years in that dream job but now you have been dismissed/fired. You are certainly entitled to receive severance pay but by the same clause (14) you will receive only the existing balance in the pension fund and no more.

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