Court: Ex-Electric Corp Worker Entitled to Free Power Despite Misconduct

Company didn't investigate suspicions and didn't anchor intention to nix supply in their agreement, judges rule

An Israel Electric Corporation employee fired for alleged embezzlement will continue to enjoy free electricity, up to the usual threshold applicable to the power utility's workforce, the National Labor Court ruled on Sunday.

David Ben Yehuda-Zaken had worked at the Israel Electric Corporation for 22 years. His last position, before he was tossed out, was manager of the utility's regional office in Eilat.

The IEC fired Ben Yehuda-Zaken after suspecting he had made illegal use of the electricity gauge at his house, and at the homes of other consumers in Eilat.

He denied most of the charges, but did ask to consider the suggestion that he retire. On January 9, 2005, the company signed an agreement with him, in which he would take "severance retirement" and receive 49% of his pension and half the compensation he'd have been due at regular retirement.

But a month later the company advised him that it had decided to terminate his entitlement to discount power, on the grounds that he had broken the Electricity Law.

In response, Ben Yehuda-Zaken demanded that the agreement with him be annulled, that he be restored to work, and that he be paid in full for the months since his severance. The company rejected his position and so they wound up in court.

Ben Yehuda-Zaken sued the IEC at the Beer Sheba labor court, where the judge narrowed the topic to one question alone: was Ben Yehuda-Zaken entitled to free power, or not. He ruled that he was, because that right is fundamental to the employment and retirement terms at the IEC.

Both Ben Yehuda-Zaken and the company appealed. Ben Yehuda-Zaken repeated his demands that he be taken back as a full employee and the company insisted that it had the administrative privilege to take away his right to free electricity.

An expanded panel of judges headed by Labor Tribunal President Steve Adler rejected both appeals. They ratified the agreement struck between the IEC and its disgruntled former employee, saying both had entered it without coercion. But they also ruled that the man was entitled to free power: the IEC could have investigated its suspicions and given him a chance to  present his position, but it didn't. The company missed its opportunity, the court ruled, by not entering its intention to terminate his free power supply in the agreement.