Collective agreement: who it applies to, what it requires, and what cannot be waived

Service page: Employment lawyer: dismissals, wages and severance pay.

Many employees discover that a collective agreement applies to them only when something goes wrong: a dismissal, a change in terms, a change of ownership. Many employers discover that the agreement still binds them after it has expired. Both discoveries come from the same place: Israeli law does not treat a collective agreement only as a contract between organizations, but as a source that feeds content directly into the individual employment contract.

What counts as a collective agreement at all

Collective Agreements Law, section 1 (unofficial translation)

A collective agreement is an agreement between an employer or an employers’ organization and a trade union, made and submitted for registration under this Law, on matters of hiring a person for work or ending their employment, terms of employment, labor relations, the rights and duties of the organizations that are parties to the agreement, or on some of these matters.

Two formal conditions come with the definition. Section 7 provides that a collective agreement must be in writing, and so must any change to it or its extension. Section 10(a) requires a copy to be submitted for registration to the Minister of Labor within two months of the date of signing. The duty applies to each of the parties, and once one of them has submitted it, the others are exempt (section 10(b)).

Two types, two representation tests

Section 2 distinguishes between a special collective agreement, for a particular enterprise or employer, made between the employer or an employers’ organization representing it and the representative trade union, and a general collective agreement, for the whole country or part of it, for certain branches of work or for all of them, made between the representative trade union in the branch or area and an employers’ organization.

The representation test is different for the two, and the difference matters. For a special agreement, section 3 requires two conditions: that this is the organization whose members include the largest number of organized employees to whom the agreement will apply, or that represents them for that agreement, provided that this number is not less than one third of all the employees to whom the agreement will apply. For a general agreement, section 4 requires only the first condition: the largest number of organized employees. There is no one-third threshold.

The one-third threshold is the line that decides organizing drives in a workplace. It is measured against all the employees to whom the agreement will apply, not against those who joined the organization.

Who the agreement applies to

Section 15 provides that a special agreement applies to the parties to the agreement; to the employers represented for that agreement by an employers’ organization that is a party to it; and to all employees of the categories included in the agreement who are employed by an employer that is a party to the agreement or is represented as described, in the occupations or positions included in the agreement.

Section 16 does the same for a general agreement, with one important addition: it applies to employers who were members of the employers’ organization when the agreement was signed or became members while it was in force, except members who were expressly excluded from the agreement. In other words, joining an employers’ organization in the middle of the period brings the employer into the agreement. An employee who does not know whether the agreement applies to them can start by checking their rights from the payslip: industry-wide additions and contributions that come from a collective agreement appear on it by name.

The mechanism that turns an agreement between organizations into a personal right

This is the central section of the whole Law:

Collective Agreements Law, section 19 (unofficial translation)

Provisions of a collective agreement concerning terms of employment, ending of employment, and personal duties imposed under those provisions on an employee and an employer and rights granted to them (hereinafter – personal provisions), shall be deemed an employment contract between every employer and every employee to whom the agreement applies, and they shall remain in force even after the collective agreement has expired, as long as they have not been lawfully changed or canceled; participation in a strike shall not be deemed a breach of a personal duty.

Three direct conclusions. First: the employee does not need to be a party to the agreement to sue under it, because the personal provision is part of their employment contract. Second: the expiry of the agreement does not cancel the personal provisions; they survive until they are lawfully changed or canceled. Third: taking part in a strike is not a breach of a personal duty.

The hierarchy: what overrides what

Four short sections build the order of priority:

• Section 20: rights granted to an employee in the personal provisions of a collective agreement cannot be waived. An employee’s agreement to waive them has no effect.
• Section 21: an employee’s rights set by law can be added to by a collective agreement, but not reduced.
• Section 22: where a provision of an employment contract differs from a personal provision of a collective agreement, the provision of the collective agreement prevails; if the difference is in the employee’s favor, the provision of the employment contract prevails, unless the collective agreement contains something that expressly prevents that change.
• Section 23: where more than one collective agreement applies to an employee, the provision that is in the employee’s favor is followed.

The qualification at the end of section 22 is the one that gets forgotten in practice: a collective agreement can expressly prohibit individual improvements, and then even an addition in the employee’s favor in the individual contract will not prevail. This is worth checking before you promise an employee unusual terms.

Extension order: when the agreement also applies to those who did not sign it

Section 25 authorizes the Minister of Labor, on their own initiative or at the request of a party to a general collective agreement, to extend by order the scope of application of any provision of a general collective agreement, if in the Minister’s opinion it is right to do so, having regard to the number of employees and employers to whom the agreement applies and to the weight of the agreement in the system of labor relations and in setting conditions in the labor market. The Minister may do so whether the agreement is in force or its validity was made conditional on an extension order being issued.

The result is defined in section 30(a): once an extension order has been issued, the provisions of the collective agreement that were extended by the order apply to all the employees and all the employers to whom the order applies, and they are deemed part of the employment contract between them. Section 30(b) protects the upper level: this does not detract from an employee’s right under a provision of an employment contract or a collective agreement that grants better terms.

This is why an employer that is not a member of any employers’ organization, and has never negotiated with a trade union, may still be bound by provisions that come from a general collective agreement. For example, the duty to make pension contributions across the economy rests on the Extension Order for Comprehensive Pension Insurance (Mandatory pension contributions: rates and conditions).

The right to organize, and the prohibition on harming it

Section 33H says it in one sentence: every employee has the right to act to organize employees in a workers’ committee and in a trade union, to be a member of them and to act within them.

Section 33H1 adds a duty on the employer: in an initial organizing drive at its workplace, the employer must negotiate on the matters listed in section 1 with a trade union that is representative under section 3. The section states expressly that it does not oblige an employer to sign a collective agreement. An “initial organizing drive” is defined as organizing by a trade union that has become representative under section 3 at that employer, which again means the one-third threshold.

Section 33J(a) prohibits an employer from dismissing an employee, worsening their terms of employment or refusing to hire a person because of: membership or activity in a trade union; activity to set up a trade union; not joining or leaving an organization; membership or activity in a workers’ committee that operates within a trade union; and activity to set up a workers’ committee. Section 33J(b) defines “terms of employment” broadly, including promotion at work, vocational training or professional development, severance pay, and benefits and payments given to an employee in connection with retirement.

Note the third item: the law protects the employee also when they choose not to join an organization or leave it. The protection works both ways. For the practical steps in setting up a committee, see Setting up a workers’ committee: the right to organize, and how to exercise it.

What to check in practice

• Whether the agreement was submitted for registration. Section 1 itself defines a collective agreement as one “made and submitted for registration under this Law”, and section 10 sets the deadline: two months from signing.
• What type of agreement it is. The one-third threshold in section 3 applies only to a special agreement; for a general agreement, section 4 does not require it.
• When the agreement expires, and what remains after that. Section 19 keeps the personal provisions in force until they are lawfully changed or canceled, so “the agreement has expired” is not an answer.
• Whether there is an extension order. Section 30 applies the extended provisions also to an employer that is not a party to the agreement.
• Whether the agreement expressly prohibits individual improvements. The qualification at the end of section 22 makes a personal promise unenforceable.
• A waiver that was signed: check whether the right comes from a personal provision. Section 20 denies such a waiver any validity.

Conditions and deadlines in the Collective Agreements Law

Hypothetical example: a special collective agreement is signed on 1 March 2026 and is in force until 31 December 2026. It had to be submitted for registration within two months of signing, that is, by the beginning of May 2026 (section 10(a)). After 31 December 2026, a seniority increment that it set as a personal provision continues to apply to the employees until it is lawfully changed or canceled (section 19), and if an employee signs a waiver of it, the waiver has no effect (section 20). The rules are based on the text of the Law as of 4 October 2026.

What to keep

• A copy of the collective agreement, and any change or extension of it.
• Payslips that show additions or contributions that come from the agreement.
• Any document you signed about a waiver or a change in terms.
• Correspondence with the workers’ committee or the trade union about rights.
• Notices about a change of ownership, a merger or a restructuring.

Frequently asked questions

What is a collective agreement?

Under section 1 of the Collective Agreements Law, it is an agreement between an employer or an employers’ organization and a trade union, made and submitted for registration under the Law, on matters of hiring a person for work or ending their employment, terms of employment, labor relations, the rights and duties of the organizations that are parties to the agreement, or some of these matters. Section 7 requires the agreement to be in writing.

What is a representative trade union?

For a special collective agreement, section 3 provides that it is the organization whose members include the largest number of organized employees to whom the agreement will apply, provided that this number is not less than one third of all the employees to whom the agreement will apply. For a general collective agreement, section 4 requires only the largest number of organized employees, without the one-third threshold.

Does a collective agreement remain binding after it expires?

Its personal provisions do. Section 19 provides that they are deemed an employment contract between every employer and every employee to whom the agreement applies, and that they stay in force even after the collective agreement expires, as long as they have not been lawfully changed or canceled.

Can an employee waive a right under a collective agreement?

No. Section 20 provides that rights granted to an employee in the personal provisions of a collective agreement cannot be waived. Section 21 adds that a collective agreement can add to rights set by law but not reduce them.

What happens when the employment contract contradicts the collective agreement?

Section 22 provides that the provision of the collective agreement prevails; but if the change in the employment contract is in the employee’s favor, the provision of the contract prevails, unless the collective agreement contains something that expressly prevents that change. Where several collective agreements apply, section 23 says to follow the provision that is in the employee’s favor.

How does a collective agreement affect wages?

The wage provisions of a collective agreement are personal provisions: they are deemed part of the employment contract of every employee to whom the agreement applies (section 19), and they cannot be waived (section 20). The agreement can add to the minimum wage set by law but not reduce it (section 21), and a higher wage set in the individual contract prevails, unless the agreement expressly prevents this (section 22). The link also works the other way: under section 4 of the Minimum Wage Law, 5747-1987, the minimum wage is increased by cost-of-living allowances and wage increases that were set in a general collective agreement and are paid to most of the employees whose terms of employment are governed by collective agreements.

What happens to the collective agreement when the plant is sold, split or merged?

The agreement continues to apply. Under section 18, if an enterprise passes from one owner to another, or is split or merged, the new employer is deemed an employer to which the collective agreement applies. In addition, under section 30 of the Wage Protection Law, 5718-1958, the new employer is also liable for the wages and the payments to a provident fund that the previous employer owed; it may publish a notice and require such claims to be submitted to it within three months, and the section does not apply to a transfer as a result of bankruptcy or liquidation because of inability to pay debts.