The employer's duty to inquire about the provident fund the employee chose upon commencement of employment.

May 28, 2019

An employee who had accumulated pension rights in the old Menachem Pension Fund (Mivtachim) with various employers over the years discovered that her new employer had enrolled her in a new Menachem Pension Fund.

The employee, who filed a lawsuit against the employer, claimed that upon her hiring, she had provided the employer with pay slips clearly showing that she had been insured in the old Mivtachim pension fund for all prior years. According to her, the employer’s act of enrolling her in the new Mivtachim fund without consulting her or obtaining her approval violated the employer’s duty of care to verify her pension arrangements.

While the plaintiff claimed substantial financial damages, the employer argued that the significant delay in filing the claim by the employee caused him considerable harm and worsened the company’s situation over time. The employer further contended that it was the employee’s responsibility to ensure her pension rights were preserved, and that no duty of care regarding this matter rested with him.

Regarding the delay in filing the lawsuit – the court reasoned that the pay slips the employee received from the employer over the two years prior to filing clearly stated her pension terms, and she could have monitored the relevant information on a monthly basis. In light of this, the court determined that the delay should be attributed to the employee and concluded that there was contributory negligence on her part in causing damages to the employer.

Regarding the issue of responsibility – the court accepted the plaintiff’s claim that she had provided the employer with pay slips explicitly indicating her pension terms in the old Mivtachim fund. Consequently, the employer’s argument that it was the employee’s responsibility to provide documentation from the old fund was rejected. The court held that the employer was required to verify with the employee, at the start of her employment, which pension fund she had chosen.

According to the court’s ruling, both the plaintiff and the employer caused substantial damages—the employee due to the delay in filing the claim, and the employer due to negligence in failing to confirm the pension fund selection.

The court ruled that apportioning responsibility in this case was the appropriate outcome and ordered the employer to pay the pension differential, calculated in present value, minus the contributory negligence of the employee due to the delay in filing the claim.

See case: Iris Melo v. Tel Mond Local Council, Case No. 34848-07-16, dated 20.12.2018, delivered by Honorable Judge Hadas Yahalom, Tel Aviv Regional Labor Court.

An employee who had accumulated rights in the long-standing insurance pension fund with various employers over the years discovered that at her new workplace, the employer insured her in a new insurance pension fund.

The employee who filed a lawsuit against the employer claimed that upon accepting the job, she presented her employer with pay stubs that clearly showed that she had been insured in the old Mivtachim Pension Fund for all these years. She claimed that the employer, who added her to the new Mivtachim Pension Fund without consulting her and obtaining her approval, violated his duty of care to inquire about her pension terms.

While the plaintiff claims substantial financial damages, the employer also claimed that the fact that the plaintiff filed the claim with a significant delay caused him significant damages and worsened the company's situation over time. The employer also claimed that the plaintiff was responsible for ensuring that her pension rights were preserved and that the duty of care in this matter did not apply to him.

Regarding the claim of delay in filing the lawsuit - the court justified its decision and noted that the pay slips that the plaintiff received from the employer for two years, prior to filing the lawsuit, stated her pension terms and she was able to monitor the relevant information each month. In light of this, the court determined that the delay should be attributed to the employee's liability and determined that there was a degree of contributory fault in causing damages to the employer.

Regarding the claim of liability - the court accepted the plaintiff's claim, according to which she provided the employer with pay slips that explicitly stated her pension terms in the old pension fund. Therefore, the employer's claim that the plaintiff was responsible for providing him with a reference from the old Mivtachim pension fund does not stand up to him, and it was determined that the employer should have inquired with the employee at the beginning of her employment which pension fund she would choose.

According to the court's ruling, both the plaintiff and the employer caused substantial damages both due to the delay in filing the lawsuit by the plaintiff and due to the employer's negligence in not clarifying the pension fund that the employee had chosen.

The court decided that dividing responsibility in this case was the desired outcome and ruled that the employer would be reimbursed for pension differences on a discounted basis, minus the contributory fault to the plaintiff's liability due to the delay in filing the claim.

See Judgment: Case No. 34848-07-16 Iris Mello vs. Tel-Mond Local Council dated 20.12.18, issued by the Honorable Judge, Hadas Yahalom, in the Tel Aviv Regional Labor Court.