Introduction

The legality of employing workers on fixed-term contracts in permanent positions (ie, positions that are not inherently temporary, only to be replaced by other employees on fixed-term contracts) has not been fully scrutinised by the judiciary in Israel.

In a recent case (the New General Federation of Labour v the Courts Administration), the regional labour court ruled that the state's fixed-term employment of judges' legal assistants for four years was unlawful.(1) The ruling, which is now under appeal, highlights some of the issues involved in fixed-term employment.

Background

A distinction can be drawn between:

  • employment in state or government bodies subject to the laws and regulations applicable to government employees or to employees in the public sector (the civil service);
  • employment governed by collective agreements or arrangements regulating tenure, legitimate reasons for dismissal and union involvement in dismissal (organised employment); and
  • employment in wholly private places of employment (the private sector).

While fixed-term employment is a recognised type of employment and there is no general restriction on it applicable to all of the above sectors, several arrangements of broad applicability, as detailed hereafter, reflect a fundamental sense of unease with this type of employment.

State Service (Appointments) Law

The State Service (Appointments) Law 1959 and the regulations promulgated thereunder, which apply to government and other civil service employees, allow for different types of employment. However, the main type of employment in the civil service is by letter of appointment, which involves tenure essentially until retirement age. Fixed-term employment in the civil service is permitted only in certain categories as specified in the law's regulations.

Manpower Agencies' Employees Agreement

The general collective agreement of February 16 2004 between the major unions in Israel (the New General Federation of Labour and the National Federation of Labour) and the Organisation of Manpower Services Companies and the National Association of Manpower Companies – affiliated with the Chamber of Commerce – regulates the employment conditions of manpower agencies' workers.

The agreement was established to meet the conditions of the Employment of Employees by Manpower Contractors Law 1996, which provides, among other things, that manpower agency workers are entitled to the same employment conditions which are given to regular employees employed in the workplace where they are employed, unless the employment conditions of the former are regulated by a general collective agreement whose provisions have been extended by extension order (the Equalisation in Employment Conditions Provision).

The New General Federation of Labour took advantage of employers' interest in avoiding the application of the Equalisation in Employment Conditions Provision to fill – albeit partially – a lacuna in the Manpower Contractors Law: the inexistence of a definition of the types of employment and employees to which the law applies. In the absence of such a definition, employers employ manpower agency workers in essentially permanent positions for the maximum period allowed under the law (ie, nine months, extendable in special circumstances to 15 months), after which they replace the employees with other manpower agency workers. At the demand of the New General Federation of Labour, the Manpower Agencies' Employees Agreement provides that it only applies to a closed list of types of employees and jobs that essentially include temporary employees or temporary places of employment. Thus, at the very least, generally there is no exemption from the Equalisation in Employment Conditions Provision when the manpower worker is not employed in a temporary job.

Collective agreements

Many collective agreements and collective arrangements contain provisions that provide tenure (for employees employed in permanent positions, which constitutes protection against dismissal). The notion of tenure is contrary to employing staff in permanent positions on fixed-term contracts.

Employing staff on fixed-term contracts is not inherently advantageous for the employer. Subject to specific restrictions on termination, such as those included in the Equal Opportunities Law 1988, the Women's Work Law 1951 or individual or collective employment agreements (that regulate tenure, legitimate reasons for dismissal and union involvement in dismissal), employment in the private sector is 'at will', in the sense that generally an employer may terminate employment subject to advance notice which, according to the Advance Notice for Dismissal and Resignation Law 2001, is a maximum of one month. Therefore, employers have no general incentive to employ staff on fixed-term contracts because, unless an early exit provision exists, early termination contrary to the provisions of the contract usually entails the payment of damages in the amount of salary and benefits for the remaining contractual period of employment, subject to the duty to mitigate damages. However, cases of fixed-term employment do exist and can serve the legitimate interests of both or one of the parties.

Labour court decision on fixed-term employment of judges' legal assistants

As mentioned above, the issue of fixed-term employment has not yet been fully scrutinised by the judiciary, but the case in reference can give a sense of the interests involved and claimed.

In the case in reference, the New General Federation of Labour brought under judicial scrutiny the issue of fixed-term employment of judges' legal assistants, who are employed on fixed-term contracts for a maximum of four years. The general rule is that employment in the civil service is by letter of appointment and that fixed-term employment is permitted only in certain categories as specified in the State Service Regulations (Special Contract) 1960.

Under these regulations, a person may be employed by the state under special contract if the civil service commissioner has determined that the person's employment is essential for the state and that there is no practical way to employ that person under the employment conditions or wages applicable to state employees hired by letter of appointment. These regulations further provide that the period of employment will be limited to five years, extendable for additional periods of up to five years in total.

The New General Federation of Labour has continuously contested the legality of fixed-term employment in permanent positions, claimingamong other things, that this method of employment aims to undermine the right to unionise and weakens the power of the union.

In the case in reference the court declined to scrutinise the general issue of the legality of fixed-term employment in permanent positions and instead focused on the legality of the state's specific decision to employ judges' legal assistants using this method of employment. Fixed-term employment of judges' legal assistants had been supported over the decades by prominent figures in the judiciary (ie, presidents of the Supreme Court and the courts administrator).

The state conceded that the position of a judge's legal assistant is not essentially temporary, but nevertheless argued that employing legal assistants on fixed-term contracts was necessary and could be justified by the following main reasons:

  • The position is particularly suited to junior attorneys.
  • Fixed-term employment enables changeover and thus exposes more lawyers to the unique experience involved in being a judge's legal assistant, and this benefits the judicial system as a whole.
  • Legal assistants are employed directly by judges and unless they are employed on a fixed-term contract, there will be instances in which judges will be forced to dismiss their assistants, which could result in a judge being forced to enter into a legal battle over the legality and reasons for dismissal. This could be demeaning and involve divulging confidential information that pertains to judicial considerations and deliberations.
  • The lack of opportunities for promotion for judges' legal assistants could lead to them becoming burnt out.
  • The employment of a legal assistant for a prolonged period could be seen by the public to affect a judge's independent discretion.

The court ruled that some of the reasons that the state had put forward were unsound or did not stand the test of time. For example, in contrast to the state's contentions, the court found that a significant number of legal assistants were not junior; rather, they were experienced attorneys. Further, the state had not proven that judges' legal assistants had become burnt out over the years. In addition, some of the other reasons which the state had put forward could be dealt with by more balanced means than the widespread employment of judges' legal assistants on fixed-term contracts.

The court further found that the state had not taken the following considerations into account:

  • The delay of work that occurs when an experienced and competent legal assistant is replaced with a non-experienced legal assistant. Such delay runs contrary to the fundamental reason for employing judges' legal assistants (ie, to increase the efficiency of judges).
  • The lack of job security and ensuing harm to the individual who fulfils his or her job competently and to the satisfaction of the judge that he or she is assisting, but who is nevertheless forced to leave his or her job for extraneous reasons without alternative employment as a judge's legal assistant being available.

The court did not rule that the employment of judges' legal assistants by special contract was prohibited and that they should be employed by letter of appointment. Further, the court did not find that employing judges' legal assistants on fixed-term contracts was aimed at undermining their right to unionise or weaken the power of the union. However, the court did rule that it was unlawful for the state to take into account only the general considerations of the judicial system and ignore the individual considerations of the people employed as legal assistants.

The court ruled that taking such individual considerations into account is part of public policy, which overrides the principle of freedom of contract. Therefore, the court declared the fixed-term employment provision in the contracts of judges' legal assistants to be annulled. Further, the court issued a permanent order that prohibited the state from terminating the employment of legal assistants only because the fixed term of their employment has expired.

The court concluded its ruling by stating that the method of employment of judges' legal assistants would best be decided by negotiation and agreement between the parties involved in collective employment relations.

Comment

The case in reference, as well as the other arrangements of broad applicability discussed above, show that the employment of temporary employees in permanent positions, only to replace them at the expiry of their fixed-term contract with other temporary employees, raises questions of fundamental legality which deserve judicial and legislative attention.

For further information on this topic please contact Shoshana Gavish at S Horowitz & Co by telephone (+972 3 567 0700) or email (shoshanag@s-horowitz.co.il). The S Horowitz & Co website can be accessed at www.s-horowitz.com.

Endnotes

(1) Collective Dispute 1054-11-13, the New General Federation of Labour v the Courts Administration(Nov 25 2014, Jan 1 2015).

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