The CEO of a company wakes up one morning and suddenly notices that some of the company's employees, who have been employed for a very long time, have not signed formal fee agreements. Instead, their employment terms are based on verbal agreements or understandings.
The CEO is aware, or someone tells him, that this is an unhealthy and unrecommended situation, but refrains from changing it, fearing that the process of preparing the agreements itself, as mentioned, will "stir up sleeping devils,' and among other things, will cause unrest among the company's employees and lead to demands from them regarding their employment conditions, and possibly even threats of lawsuits.
The concern is understandable. But the CEO is mistaken in his decision to "maintain the status quo'.
Why? Because at the price of so-called 'industrial quiet,' the CEO is digging himself and the company he manages into a deep, immeasurable pit.
First, employing workers without their employment terms being clear and in writing is against the law (among other things, the Notice to Employee and Candidate for Employment (Terms of Employment and Screening and Acceptance Procedures) Law, 2002) and exposes the company, for this reason alone, to liabilities of tens of thousands of shekels!
Beyond that, employing workers without their relationships with the company being regulated by organized and signed agreements, which meet all current legal requirements, is a veritable time bomb, which could, at any moment, cause conflicts and even severe legal disputes between the workers and the company, which will inevitably take up a lot of time, sour the atmosphere in the company, and even expose the company to liabilities of tens and hundreds of thousands of shekels.
Potential disputes are numerous – is the employee's employment subject to any collective agreement or industry expansion order? What is the base salary from which pension and severance payments are made? Is the employee entitled to overtime, and in what manner? What social benefits is the employee entitled to, and how are they calculated? What benefits is an employee entitled to? What are the conditions for granting them? Is the employee entitled to bonuses? How are they calculated? And so on and so forth.
So what do we do? Overcome our fears and don't waste another day!
We recommend that you contact an experienced labor law attorney, who has experience and seniority in preparing employment agreements for company employees, and settle the matter.
We invite you to contact us to clarify any questions.
Adv. Dov Kerner 052-6371983