"Loss of work capacity" for Palestinian workers in the construction industry
Oct 24, 2018
Attorney Shlomi Hadar – John Geva, Hadar & Co. Law Offices
The Foreign Workers Law, 1991 (hereinafter: the “Law”) establishes an obligation for an employer wishing to hire Palestinian workers to submit an application in accordance with the procedures and instructions of the Foreign Workers Administration (Metash), which is responsible for collecting part of the amounts that employers are required to contribute and deduct, and to obtain a work permit from the Head of the Population and Immigration Authority (hereinafter: the “Supervisor”).
Section 1 of the Foreign Workers Law imposes all employer obligations regarding payment of employee wages and social conditions in accordance with Israeli labor law, including extension orders and collective agreements applicable in the sector in which the employee is employed.
On March 27, 2018, after extensive discussions between our office and the Population Authority, we were informed that the Director of the Foreign Workers and Employers Division at the Population and Immigration Authority had published the Foreign Workers Retirement Procedures, including provisions regarding Palestinian workers legally employed in Israel (hereinafter: the “Foreign Workers Procedures”).
The Foreign Workers Procedures are designed to regulate how the Payments Department of the Population and Immigration Authority (Metash) handles requests from Palestinian workers legally employed in Israel, or former employees and their heirs, for whom funds were deposited for pension insurance in a dedicated retirement fund to cover various future retirement benefits.
According to the provisions of the Foreign Workers Procedures, the employer is required to transfer all payments owed to the employee, including gross wages and contributions for social and other rights, to Metash. Metash then acts as a conduit for transferring these funds (contributions and deductions from the employee’s salary) on an ongoing basis to the relevant bodies in the Palestinian Authority.
Amounts collected for pension insurance are deposited into a dedicated fund (outside the framework of insurance companies or new pension funds) and are intended to finance various retirement payments for Palestinian workers in due course.
This dedicated fund operates similarly to an old-style pension fund, i.e., a defined-benefit pension, whereby the employee’s entitlements are determined as a percentage of their reference salary according to the length of employment and employment share, independent of the amounts accumulated during the savings period.
Attorney Shlomi Hadar – John Geva, Hadar & Co. Law Firm
The Foreign Workers Law, 5751-1991 (hereinafter: "Foreign Workers Law" ) establishes an obligation for an employer wishing to employ Palestinian workers to submit an application in accordance with the procedures and instructions of the Palestinian Employment and Social Security Administration (which is responsible for collecting part of the amounts that employers are obligated to set aside and withhold) and to receive an employment permit from the Head of the Population and Immigration Authority (hereinafter: " the Commissioner ").
Section 1 of the Foreign Workers Law applies all of the employer's obligations regarding the payment of employees' wages and social conditions in accordance with Israeli labor law, including expansion orders and collective agreements in the employment sector in which the employee is employed.
On March 27, 2018, and after lengthy discussions between our office and the Population Authority, we were informed that the Director of Services for Employers and Foreign Workers at the Population and Immigration Authority had published the procedure for pensions for foreign workers, including Palestinian workers legally employed in Israel (hereinafter: " Foreign Workers Procedure ").
The Foreign Workers Procedure is intended to regulate the manner in which the Payments Sections Division of the Population and Immigration Authority (hereinafter: " PIA ") handles applications from Palestinian workers who are legally employed in Israel or from workers who were legally employed in Israel or their survivors and for whom funds for pension insurance were deposited in the designated fund for the payment of various benefits.
According to the provisions of the Foreign Workers Procedure, the employer will transfer to the Ministry of Labor all payments to which the employee is entitled, including the payment of the gross salary and the provision of amounts for social and other rights, with the Ministry of Labor functioning as a conduit for transferring the funds (provisions and deductions to be deducted from the employee's salary) on an ongoing basis to the relevant bodies in the Palestinian Authority.
The amounts collected for pension insurance are deposited in a designated fund (not within the framework of insurance companies or the new pension funds) and are intended, in due course, to finance the various pension payments to Palestinian workers.
This designated fund operates in the format of a long-standing pension fund, namely, a "defined-benefit pension," according to which the member's benefits are determined as a percentage of his salary, which is determined according to the length of employment and the part-time nature of the position, and is separate from the amounts accumulated during the savings period.
It is important to emphasize
The foreign worker procedure is irrelevant to the employment of Palestinian workers outside of Israel . Many questions arise regarding these workers, stemming from the gap between what is desired and what is actually available.
Our office examined many aspects regarding the terms of employment of Palestinian workers outside of Israel, including insurance aspects. A proceeding conducted against an employer represented by our office in relation to a Palestinian worker who worked outside of Israel was dismissed after a professional opinion was submitted that emphasizes the fact that insurance companies in Israel refuse to insure Palestinian workers, and publications indicate that in another proceeding, an opinion was given on behalf of the Ministry of Justice (Attorney Gila Hammi-Fink) according to which businesses in Israeli localities that employ Palestinians across the border are not required to insure them with pension insurance. According to the opinion, the state is also not obligated to those who are not its citizens, and since civilian insurance companies are not prepared to insure Palestinians, this obligation should not be placed on the shoulders of the employer.
As of the date of writing, there is no guiding or binding law on the subject, and appropriate legal advice should be sought in any case of employing an employee outside of Israel, as stated.
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