Recently, the National Labor Court set a new ruling with regard to calculating severance pay for hourly employees. The decision was handed down on the matter of Y.B. See Resources Ltd.
Up until now, according to the National Labor Court’s previous precedent, to calculate the severance pay of an employee who earned an hourly wage, it was necessary to compute the severance pay according to the scope of employment during the last 12 months of the employee’s employment. Now, according to the new ruling, the calculation is to be computed according to the employee’s volume of work throughout the entire period of his employment.
In its judgement, the Court relayed a possible situation in which the parties do not have sufficient data about the employee’s scope of employment throughout all the years of his employment. Accordingly, the court ruled that if such a situation arises, then the calculation should be performed using solely the existing data, while also making use of the burdens of proof that apply to the parties in relation to establishing the employee’s scope of employment. (Since 2009, the burden of proof of scope of employment has been imposed on the employer, insofar as attendance records were not kept in relation to the employee.)
In light of the new ruling, it is advisable to retain hourly employees’ attendance records throughout the entire period of their employment, even if they have been working for many years, as well as for the entire prescription period (seven years) after termination of the employment relations.