Labor Court Orders 890,000 NIS Payout for Broken Pension Continuity
A Beersheba Labor Court ordered an employer to pay 890,000 shekels in lost disability pension after failing to transfer funds for an employee who worked only 52 days.
The Beersheba Labor Court ordered an employer to pay 890,000 shekels to an employee who worked for just 52 days and fell ill four years later, covering lost disability pension benefits. The ruling came after the employer, "Maimon David Packaging and Chemical Services," failed to transfer pension funds during the brief employment period, breaking the employee's pension continuity and disqualifying him from disability payments.
The plaintiff had been continuously insured in the Menora Mivtachim pension fund since 2001. In May 2016, he began working at the company as a maintenance manager, staying only from May until mid-July. Although the employer deducted pension funds from his June salary slip, it never transferred them to the fund.
The Breakdown of Pension Continuity
The insurance company subsequently sent the employee a warning letter regarding potential damage to his insurance coverage. Due to the halt in deposits, his insurance continuity was broken, and the fund registered him as a new member.
Four years later, the employee lost his working capacity, but the fund rejected his disability pension claim because it constituted a preexisting condition and he had not accumulated a new qualifying period of 60 months.
Legal Arguments and the Court's Decision
At the center of the dispute was the question of responsibility for breaking the insurance continuity. The employer argued that the employee failed to cooperate, submitted a false health declaration, and did not specify his preferred pension fund. The company also claimed that since the employee did not complete three months of work, it had no legal obligation to insure him under the mandatory pension extension order.
Rejecting these arguments, the labor court ruled that an employee is entitled to pension contributions from the very first day of work. The court emphasized that a mandatory pension is a cogent right that cannot be waived, even by mutual agreement. Furthermore, the employer's failure to remit the deducted funds directly caused the loss of the employee's disability coverage.
"The ruling sends a significant message to employers and sharpens a fundamental principle in labor and social security law: the pension obligation imposed on an employer is a cogent duty that cannot be waived," said Adv. Sharon Braverman-Attia, who represented the employee.
Employer's Intent to Appeal
Representing the employer, Adv. Liron Saban criticized the verdict as unreasonable, noting that the employee worked for only 52 days, resigned before completing three months, and explicitly asked in writing not to make pension deposits. The employer announced plans to appeal the decision to the National Labor Court.
