Rejecting construction workers' claims at the local authority stage, right?
Dec 8, 2021
By: Adv. Maya Arieli
The Builders Association of Israel and the Histadrut estimated that, already about five years ago, the total volume of employee claims in the construction sector against their employers had reached a staggering NIS 6 billion (with an average claim of approximately NIS 150,000).
Attorney Maya Arieli, who specializes in the complex representation of contractors against construction workers, explains how even an issue that may seem “minor”, such as local jurisdiction, can be instrumental in dismissing a claim at the very early stages.
A common occurrence at the end of an employment relationship in the construction sector is that, upon completion of the employment period, the contractor receives a claim in the labor court. Sometimes these are single claims, and at other times there is a real “flood” of claims—especially if the company employs a large number of workers (such as laborers and site managers).
As an attorney representing contractors and construction companies, I receive numerous inquiries on this issue on a regular basis, including from large contractors who are simultaneously facing around 100 different claims (!) .
Upon receiving such a claim, it is necessary to carry out several checks regarding the requested remedies, including: working hours, overtime, industry seniority, rank/position, travel, holidays and vacation days, vacation pay, and more. Another interesting piece of information that emerges from the claim is local jurisdiction—in other words, which court has the authority to hear the claim.
By: Attorney Maya Arieli
The Israel Builders Association and the Histadrut estimated that the scope of claims by workers in the construction industry against their employers reached a huge sum of about 6 billion shekels about five years ago (average claim – about 150,000 shekels).
Attorney Maya Arieli, who specializes in the complexities of representing contractors against construction workers, explains how even a "seemingly marginal" issue such as "local authority" can help to dismiss the proceedings in the early stages of these types of claims.
The common phenomenon when ending an employment relationship in the construction industry between an employer and an employee is that at the end of the employment period, the contractor receives a claim from the Labor Court. Sometimes these are individual claims and sometimes a real "flood" (especially if the company employs a large number of workers (such as laborers and foremen).
As a lawyer representing contractors and construction companies, I receive many inquiries on this subject on an ongoing basis, including even from large contractors who are simultaneously dealing with about 100 different lawsuits (!).
Upon receipt of this type of claim, it is necessary to perform several checks on the requested remedies: working hours, overtime, industry seniority, ranking/rank, travel, holidays and vacation days, convalescence pay, and more. Another interesting piece of information that emerges from the claim is the local jurisdiction. In other words, where does the Honorable Court have local jurisdiction to hear the claim?
What is the local authority?
Regulation 3(a) of the Labor Court Procedure Regulations, 1991 regulates the place of jurisdiction of labor courts. The wording of section 3(a)(1) states that a claim regarding labor relations will be heard by: " The regional court within whose jurisdiction the workplace of the employee who is the subject of the claim is located, or within whose jurisdiction the work was performed ."
Many of my clients receive claims that are called in their language: "copy-paste claims." Often these claims are systematically filed with a specific court regardless of Section 3(a)(1) mentioned above.
This is no trivial matter. Case law has repeatedly determined that local jurisdiction must be asserted at the first opportunity , and therefore it is important to note whether the claim includes reference to the geographic location of the employer's office and/or the last actual place of work .
What is local jurisdiction?
Regulation 3(a) of the Labor Court (Rules of Procedure) Regulations, 1991 governs the place of jurisdiction of the labor courts. Paragraph 3(a)(1) states that in a claim concerning employment relations, the case shall be heard by:
“The regional labor court in whose jurisdiction the employee’s workplace is located, or in whose jurisdiction the work was performed.”
Many of my clients receive claims that they refer to as “copy-paste claims.” Often, these claims are systematically filed in a specific court without regard to the requirements of section 3(a)(1) mentioned above.
This is not a trivial matter. Case law has repeatedly established that objections to local jurisdiction must be raised at the earliest opportunity, so it is important to check whether the claim includes reference to the geographic location of the employer’s office and/or the employee’s last actual workplace.
Being at the right time and in the right place:
In a case I recently handled, the Honorable Tel Aviv Labor Court accepted my request to dismiss the lawsuit prior to appearing before a private committee, and this was only due to the fact that the plaintiff was unable to prove the location of the work and hence local jurisdiction.
In another case, the dispute regarding local jurisdiction developed over the receipt of a request for a bond to secure the defendant's expenses and an award of expenses to the employee. Below is a brief description of the case:
A Palestinian worker filed a lawsuit against a construction company with the Beer Sheva Regional Court. The defendant's registered office in Lod and the work sites at that time were in Modi'in. Already in the defense and before the trial, the claim of the lack of local jurisdiction of the Honorable Court to hear the lawsuit was raised. After an inquiry conducted on behalf of the plaintiff, it was determined that since the work sites were in Modi'in, the Beer Sheva Court did not have the jurisdiction to hear the case.
The Honorable Deputy President of the Court ruled that the claim would be transferred to the Tel Aviv Regional Court and in addition it was determined that the plaintiff must pay the defendant an amount of 500 NIS for legal expenses, which will be paid within 30 days. As stated, the claim was transferred to the Tel Aviv Court, but the plaintiff did not pay the expenses that were ruled against him and the possibility of submitting a request for a guarantee on behalf of the defendant to secure expenses was opened.
After another month, days of rest and a lot of patience, the request was accepted and it was determined that the plaintiff must deposit within a month a sum of 2,000 NIS in the court's treasury in order to be able to continue the proceedings, otherwise the claim would be dismissed. The employee, as expected, did not make the payments and the case was even largely reversed when an enforcement case was opened against the employee plaintiff to collect the costs that had been awarded.
Hence, consulting with an attorney specializing in labor law and the collective agreement in particular upon receipt of the statement of claim can often be a decisive factor in the conduct of the case.
In conclusion, every contractor asks me: "What will happen to these claims?"
The answer is simple and a bit unpleasant. Unfortunately, you, the contractors, are enabling the claims. Remember that as employers , all labor laws and the collective agreement in the construction industry apply to you, including digital/signed time cards, notice to the employee, dismissal in good faith and subject to a hearing, management of a vacation log, and more.
Apart from the fact that the existence of the above may reduce the risk of filing a lawsuit against you, all of this is not a recommendation but your duty as employers . As a member of a family of contractors, I know that the construction industry must run while executing, but from time to time you have to stop and think about how your company employs its employees and how it is managed. Remember that proper employee management may save you a lot of time and money in the future.
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The writer is an attorney specializing in labor law and collective bargaining agreements in the construction industry.
** The above is not a substitute for legal advice or legal counsel. The above should not be considered a recommendation to take legal action or to refrain from taking legal action. Attorney Maya Arieli recommends seeking legal advice in each specific case and subject to the relevant circumstances.
The answer is simple—and a bit unpleasant. Unfortunately, you, the contractors, are enabling these claims. Remember that as employers, all labor laws and the collective agreement in the construction sector apply to you, including: digital/employee-signed timecards, employee notifications, termination in good faith and subject to a hearing, maintenance of vacation records, and more.
Beyond the fact that compliance with these requirements may reduce the risk of claims being filed against you, these are not optional recommendations—they are your obligations as employers. As someone from a family of contractors, I understand that the construction sector must keep moving while work is in progress. However, from time to time, it is necessary to stop and reflect on how your employees are employed and managed. Remember, proper employee management can save you significant time and money in the future.
The author is an attorney specializing in labor law and the collective agreement in the construction sector.
Disclaimer: The above does not constitute legal advice or a substitute for legal consultation. Nothing in this text should be considered a recommendation to initiate or refrain from legal proceedings. Adv. Maya Arieli recommends seeking legal advice for each specific case and in accordance with the relevant circumstances.
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