High Court of Justice ruling
Traditionally, the role of the unions has been to represent employees and fight for their rights and the improvement of their rights. In Israel, employment law, both statutory and case, has recognised the special status of unions at the collective employment level - especially representative unions - as including:
- the power to represent employees who are not members of the union;
- the power to declare and conduct a lawful strike; and
- the power to negotiate collective agreements.
All of these powers have lawful and effective ramifications, on both the collective and individual levels, which may be detrimental to the employee as an individual.
Membership of a union does not terminate upon the employee's retirement.
In 1181/03 Bar Ilan University v The National Labour Court (April 28 2011) the High Court of Justice ruled on the specific question of whether a union has the power to declare a lawful strike with respect to the retirement rights of retirees who have already retired. It should be emphasised that employee rights, in respect of which the union's traditional role and special status have been recognised, have long been regarded as including termination and retirement rights. The novel issue in this case was whether this role and special status extend to apply to the rights of retirees who have already retired.
The academic staff at Bar Ilan University are represented by a union that is party to several collective agreements with the university. The collective agreements include conditions of retirement. According to the collective agreements, the pension payable to academic staff retirees is linked to the cost of living index and not to the salary of the active academic staff. The union negotiated a collective agreement according to which the salary of the active academic staff was substantially increased. The retirees did not enjoy the benefit of the raise. The union declared a strike in order that the retirees' pensions be raised. The regional labour court ruled that the special status of the union did not extend to representing retirees who have already retired.
The National Labour Court reversed this decision. The university filed a petition to the Supreme Court in its capacity as the High Court of Justice against the National Labour Court's ruling. The unions representing the academic staff of other universities were adjoined as respondents. In addition, the biggest union in Israel - the General Federation of Employees - was adjoined as respondent, together with the Industrialists' Association, which is one of Israel's major employers' organisations, and the attorney general. The Industrialists' Association and the attorney general supported the university's position, while the unions supported the position of the union of the university's academic staff.
The High Court of Justice rejected the petition. It ruled that a union has the power to declare and conduct a lawful strike with respect to the retirement rights of retirees who have already retired. The ruling included the following provisos:
- The ruling must apply only to retirees who are members of the union, on a voluntary basis, and for as long as they are members;
- The retirees must form a distinct interest group that is not identical to that of the active employees and whose rights must be specifically and distinctly provided for;
- The union may act on the collective level to improve the conditions of retirees, and for this purpose may use all recognised legal means, including a strike;
- The union may not derogate from the rights of the retirees as they were established on the date of their retirement; and
- The recognition of the union's status and power to represent retirees does not answer all of the many needs of Israeli senior citizens, which require protection through the creation of effective methods.
The ruling was issued in light of an increased population of retirees and increased life expectancy, which have created a whole new spectrum of needs which have not been adequately addressed. The primary policy considerations are as follows:
- the integral connection between employees and retirees;
- the weak position of retirees;
- the fact that the unions have the power and means to fight to protect and improve the retirement rights of retirees, but that there is a paucity of alternative resources available to do so; and
- the necessity and justification of the unions also taking up this fight in the interests of social solidarity.
This judgment, which affirms the National Labour Court's ruling, is of tremendous importance when consolidating the position of retirees and protecting their interests, because it:
- depicts retirees as an integral part of a group which has recognised constitutional rights and powers;
- prevents their segregation and being left to their own resources, and allows them to benefit from the special status and power and organisation of the unions; and
- places obligations on the unions to fight for retirees and protect their interests.
For further information on this topic please contact Shoshana Gavish at S Horowitz & Co by telephone (+972 3 567 0700), fax (+972 3 566 0974) or email ([email protected]).