Israel's Top Court Bars State From Giving $62m in Sick Pay Owed to Palestinian Workers

The state recently decided to give the money to Israeli employers, although critics point out that there is no transparency in the way it's calculated

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Palestinian workers in Jerusalem, May 2019.
Palestinian workers in Jerusalem, May 2019.Credit: Emil Salman
Or Kashti
Or Kashti

The High Court of Justice this week forbade the state from giving employers some 218 million shekels ($62 million), which have accumulated in a sick pay fund for past and current Palestinian workers, pending a court debate scheduled for next week.

The state had recently decided to give the money to the employers.
The court’s interim order was issued at the request of Kav LaOved Workers Hotline and the Association for Civil Rights in Israel. The Histadrut also objected to the state’s intention to give the money to the employers without any transparency in the way it was calculated and without ensuring the Palestinian workers’ rights to sick pay.

“The workers are entitled to some of the accumulated funds, because although they were insured with the sick pay fund, in fact it was almost impossible for them to receive any sick pay,” the Histadrut said.

Until the beginning of 2019 employers automatically set aside 2.5 percent of their Palestinian workers’ wages for a “sick pay fund,” run by Israel's Population and Immigration Authority. But the process of receiving sick pay is much longer and more complicated for Palestinians than for their Israeli counterparts. The requests are usually filed only for serious diseases and injuries and require an intricate labyrinth of administrative and medical permits. Only rarely is the sum paid in full.

For many years the Population Authority passed the unused funds to the treasury. The state’s response to the court shows that so far 515 million shekels have accumulated in the fund, much more than reported so far.

A Palestinian worker in in Beit Shemesh, November 2019.Credit: Gil Cohen Magen

In 2016 Kav Laoved and the Civil Rights Association petitioned to the High Court of Justice in demand to use the sick pay deducted from the Palestinian workers wages for its intended purpose – ensuring that workers are paid in the event of becoming sick or incapable of working.

The state said in response that it was having difficulties in allocating the money to specific workers and that there were other problems with managing the sick pay fund. Official state data show that a tiny percentage of the Palestinian workers receive sick pay. In 2014-2017 only 1-1.5 percent of 50,000-70,000 workers received sick pay, although they are employed in physical labor, where the risk of injury is high.

In June 2018 the state said it had set up an inter-ministerial team to examine the use of the money in the sick pay fund. Haaretz found that the team had examined the possibility of using the hundreds of millions of shekels that accumulated in the fund to improve the checkpoints in the West Bank, through which the Palestinians enter Israel. A week later the employers asked to join the petition.

“After the sum was published, the employers’ organizations started showing an interest in their Palestinian workers’ rights, which they had never properly implemented,” wrote Kav LaOved lawyer Michal Tager.

As far as is known the team finished its work at the beginning of 2019, but due to the last election campaign and the formation of the caretaker government the team’s recommendations were neither discussed nor approved. For this reason the state asked the court to postpone its debate on the petition, which had been scheduled for the beginning of the month.

A Palestinian worker at a construction site in Jerusalem, May 2019.Credit: Emil Salman

But a few days later the Israel Builders Association announced that “after a long struggle the Population Authority has begun returning to contractors hundreds of thousands of shekels charged from them over decades” for Palestinian workers in their employ.

In an urgent request for an interim order, Tager wrote that it was unacceptable to return “even one shekel in a unilateral move, without correcting the failure for which the petition was submitted.” She noted that the legal process was in its midst and the inter-ministerial team’s recommendations had not been drafted or issued yet.

Tager said the sum the state had passed to the employers was much higher than the sum set aside for the Palestinians they employ, which is estimated at a few million shekels. A Housing Ministry report said last year that only about 5 percent of the Palestinian workers are employed by the same company for more than five years.

Kav LaOved and the Civil Rights Association argued that the employers set to receive hundreds of thousands of shekels will have an incentive to fire veteran workers, to whom they are obliged to give sick pay, and replace them with new workers who are not yet entitled to sick pay.
“This is easy profit, because there’s no ban on firing a worker who has accumulated tens and hundreds of ‘unused’ sick days,” they said.

The state claimed in response that the inter-ministerial team only dealt with the money that would remain in the sick pay fund after reimbursing the employers for “active workers” – a sum totaling 218 million shekels. The sum is intended to be used by employers for sick pay by law, as needed, the state said.

The petitioners say there’s no factual or professional basis for the state’s argument that there are two kinds of funds in the sick pay fund. They say the sum is 100 times higher than the money that was actually paid Palestinian workers in 2015.

“A hundred entire years will pass until Palestinian workers receive from their employers sick pay in the sum the state has decided to give their employers now, in a non-transparent calculation,” they said.

“Although we’ve been dealing with the issue for three years we learned of the state’s plan to give employers close to a quarter billion shekels from the social networks,” Tager says.

“The astronomical sum will be given employers without notifying the court, unconditionally, with no supervision and without a government decision and a professional team that was set up to discuss sick pay in the future and the past. The only meaning and purpose of this sum is to lower the cost of employing the workers, while totally renouncing the responsibility of implementing their rights,” she says.

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