The Nof Hagalil–Nazareth Regional Labour Court recently ruled that an employer who sued for approximately NIS 600 thousand from the company's safety supervisor, will pay the employee compensation of NIS 18 thousand.
The lawsuit shows that a company filed a giant claim against the employee for a total of NIS 593,890. The company claimed that the employee blatantly breached the employment agreement and committed industrial espionage.
It was further claimed that the employee operated throughout his period of employment for a competing company, and even did so while presenting fictitious sick leave certificates to the company. The company claimed that the employee visited its clients during his sick days, withdrew documents for the competitor, and transferred price quotes and profitable client projects to the competing company, which caused it financial damage.
It was also claimed that his unprofessional conduct and repeated absences led to the departure of key clients, including large companies, and to severe harm to the company's reputation. In addition, the employer claimed that the employee reported fictitious working hours on the app during which he ran personal errands, and defamed the company and its managers before clients. The company demanded compensation for economic damages, the restitution of the fictitious hours, as well as damages for defamation, breach of contract, and mental anguish.
On the other hand, the employee, who was represented by Adv. Asaf Kadosh whose office specializes in labour law, rebuffed the allegations and filed a counterclaim for a total of NIS 61,160 for infringement of his social rights and unlawful dismissal. The employee, who was employed by the company for less than 3 years, claimed that he was a devoted and outstanding employee. According to his version, the company violated the law when it did not deliver his employment agreement to him on time, and even refrained from delivering monthly pay slips and attendance reports despite repeated demands.
The employee claimed that the employer made unlawful deductions from his global salary and failed to pay him full convalescence pay. According to him, after he insisted on his rights and complained about delayed wages, the company summoned him to a hearing while raising groundless claims designed to justify his dismissal in advance, and even took the work vehicle from him before the hearing was held.
Finally, the employee was dismissed immediately via a WhatsApp message, without being given prior notice and while denying him severance pay. Within the framework of the counterclaim, the employee petitioned for the completion of severance pay, payment in lieu of prior notice, return of deductions, redemption of annual leave, convalescence pay, and compensation for non-delivery of slips and unlawful dismissal.
With the consent of the parties, the court was authorized to rule in a compromise framework pursuant to Section 79A of the Courts Law, which enables the rendering of a judgment without reasoning. In the judgment given, the court effectively rejected the giant lawsuit of the employer. Within the framework of weighing the mutual claims in the compromise, the court ruled that the employee must pay the company a total sum of only NIS 11,000, whereas the company must pay the employee a total sum of NIS 28,500. This is a difference in the amount of approximately NIS 18 thousand in favour of the employee.
The company attempted to appeal the judgment, but its attempt was rejected, and thereby the legal proceeding ended in the failure of the employer's lawsuit and in the rebuffing of its allegations against the employee.
Adv. Asaf Kadosh, counsel for the safety supervisor, notes that: "The legal importance of the proceeding is in protecting freedom of occupation, and it places a warning sign against employers who use non-compete stipulations. The ruling reflects a clear policy, that stipulations seeking to prevent an employee from moving to a competitor or opening an independent business, usually under the threat of agreed compensation in enormous sums, are void, unless the employer proves that strict tests of proportionality, reasonableness, and protection of a legitimate interest are met. For example: Protection of a trade secret, special training funded by the employer, or special consideration given in exchange for the restriction of occupation."
According to him: "In the aforementioned case, the legal result speaks for itself, the enormous gap between the original lawsuit amount and the amount actually awarded sends a sharp message. The court's ruling clarifies in practice that employers cannot use employment contracts as a weapon. The near-total rejection of the employer's lawsuit itself is a clear and unequivocal statement by the court regarding the eradication of 'intimidation lawsuits'. The message is clear: Slapp lawsuits, filed in absurdly enormous sums with the aim of paralyzing employees and exploiting power gaps, are rejected in the labour courts, and prove once again the importance of a steadfast and uncompromising stand for employee rights."