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Shabbat Parashat Lech Lecha 5779

P'ninat Mishpat: Pay for the End of the Employment Period Part II

(based on ruling 76090 of the Eretz Hemdah-Gazit Rabbinical Courts)

Case: The defendant (=def) is a company that advises those seeking home mortgages; def employed the plaintiff (=pl) for several months as spelled out in a written contract. Hourly pay was minimum rate but there were bonuses per case handled. Def provided its workers with extensive training about real estate, which, def reasons, justifies their clause restricting employees from working elsewhere in the field for three years subsequent to employment at def. Shortly after pl started working, def stopped paying salaries on time, with the claim of extreme illiquidity. They met with all the workers and tried to arrange an installment pay plan. This did not sit well with pl, who shortly thereafter sought alternative employment. Pl is suing for his last two months of salary (April-5795 and May-5457 shekels), for overtime and bonuses not received, and for withholding of pay up to the time of the beit din ruling (34,151 shekels). Def responds that they do not give overtime because they grant breaks during the workday very liberally. The bonuses not given relate to cases which pl did not see through until receipt of mortgage. Def are countersuing for pl’s refusal to follow def’s instructions on helping the client, which they claim caused the loss of several clients. They also claim that pl gave a false report of hours for the last month. They also demand a return of the cost to def of the course pl took, especially since pl is working elsewhere within the field (pl denies this).


Ruling: We continue with further elements of the dispute.

Late pay – Israeli law calls for large penalties for late pay of workers, which can be reduced by the court in cases that: the lateness was due to an honest mistake; it was due to forces beyond the employer’s control; the pay was the subject of a legitimate legal disagreement. Regarding April’s salary, beit din was convinced by def’s actions that they had a financial crunch which made paying workers very difficult, as the workers accepted. The dayanim disputed the ramification of this conclusion. According to one dayan, these are extenuating circumstances in which def should not have to pay any penalty, as the only reason that extra payment for lateness is not ribbit is that the one who owed is being charged for improper behavior (see Minchat Shlomo II, 68). According to two dayanim, the point of the law is to penalize an employer enough to deter him from being late. He should have impetus to find ways, e.g., outside financing, to enable payment of workers. Therefore, a penalty of 2,000 shekels is logical in this case. Beit din was convinced by communications between the sides that the reason for def’s not paying in May was that they had counterclaims that they believed in; therefore, on that amount, there will not be a penalty.

Not following rules – A worker is required to follow the employer’s rules. However, in this case, it is unclear that the rules were made clear to pl. In any case, there is no proof that def was damaged by pl’s style of work, which was legitimate based on his experience.

Paying for course – The course in real estate was a “gift” to the workers and was not linked to a certain amount of time working for the company. Pl denies taking information to another firm and claims to be mainly working in a different field. In any case, since he left def because of withheld salary, he is not bound to the pledge to not work for competing companies.
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