Resignation deemed dismissal: when you get severance pay even though you resigned

Service page: Unlawful dismissal: when, what you are entitled to and how to sue.

What is “resignation deemed dismissal”?

The Severance Pay Law, 5723-1963, gives a right to severance pay to a person who worked for one year continuously for one employer or in one workplace and was dismissed (section 1(a)). A person who resigns does not fall under this rule. But the Law lists situations in which “the resignation is treated as a dismissal”. In these situations the employee is entitled to severance pay as if they had been dismissed. The expression “resignation deemed dismissal” (התפטרות בדין מפוטר) does not appear in the Law; it is the usual name for these situations.

In which situations does the Law treat a resignation as a dismissal?

These are the situations in the Law. Each of them has its own conditions:

• Health (section 6). An employee who resigned because of their own health or the health of a family member. This applies when, in light of the medical findings, the working conditions and the other circumstances of the case, this was sufficient reason to resign. For this purpose, a “family member” is a spouse (including a common-law partner), a child (including an adopted child or a stepchild), or a parent. It also includes a grandchild, a grandparent or a parent of the spouse who lives with the employee and is mainly supported by them (regulation 11 of the Severance Pay Regulations (Calculation of Severance Pay and Resignation Deemed Dismissal), 5724-1964 (תקנות פיצויי פיטורים (חישוב הפיצויים, והתפטרות שרואים אותה כפיטורים), התשכ״ד-1964)).
• Parenthood (section 7). An employee who resigned within nine months of the day she gave birth, in order to care for the child. The rule also applies to a woman who received for adoption a child under the age of 13 and notified the employer. It also applies to an intended parent under the Embryo Carrying Agreements Law (חוק הסכמים לנשיאת עוברים). And it applies to a foster parent of a child aged ten or under, with the confirmation of the foster care supervisor that the resignation was needed for the child’s welfare. In each case, the resignation must be within nine months of receiving the child. A male employee (a father) is entitled to this only if one of the conditions in section 7(b) is met. For example, his spouse worked as an employee for at least six consecutive months shortly before his resignation. The right belongs to only one of the spouses (section 7(c)).
• Moving home (section 8). Only in the circumstances set in regulation 12 of the regulations. One is moving after marriage to the locality where the spouse lives. The distance between the new home and the previous one must be at least 40 km, and the new home must be further from the workplace (regulation 12(a)). Another is moving from a non-agricultural locality to an agricultural locality (a kibbutz, a moshav or a locality where most residents are farmers). The same applies to moving from a locality outside a development area to a locality in a development area on the list in the regulation. In these two cases, the employee must first live in the new place for at least six months (section 8(2) and regulation 12(b)). Regulation 12(c)–(i) sets further circumstances, under the distance and residence conditions set there. Examples are joining a spouse who moved to a workplace and a home at least 40 km away, or moving after a divorce.
• Material deterioration in working conditions, or circumstances in which the employee cannot be required to continue working (section 11(a)). This is the broadest section, and it is explained below.
• Other situations. An employee who resigned because of a stay in a shelter for battered women, with confirmation as required in the section. This applies if she stayed there for at least 60 days shortly before the resignation (section 7A). A resignation shortly before enlisting for regular military service or starting civilian service, and because of it, under the conditions in section 11(c). A resignation because of election as head of a local authority or as deputy head, serving for a salary from the authority’s funds, under the conditions in section 11(d). A resignation after reaching retirement age (section 11(e)). A seasonal employee under the conditions in section 11(b). A resignation during a period in which the employer was prohibited from dismissing under section 32B of the Families of Soldiers Killed in Action Law (חוק משפחות חיילים שנספו במערכה) (section 11(f)). Separately, when a fixed-term contract ends and the employer did not offer to renew it, the employee is treated as if they were dismissed (section 9(a)).

Material deterioration in working conditions: what must you show?

Section 11(a) provides: “If an employee resigned because of a material deterioration in working conditions, or because of other circumstances in the employment relationship regarding that employee in which they cannot be required to continue working, the resignation shall be treated, for the purposes of this Law, as dismissal”. The Law does not define what a “material deterioration” is.

According to the case law of the labor courts, an employee who claims entitlement under section 11(a) must prove three things:

1. that there was a material deterioration in working conditions, or that there were circumstances in which they cannot be required to continue working;
2. that there is a causal link between the deterioration or the circumstances and the resignation;
3. that they gave the employer reasonable warning of their intention to resign and a fair opportunity to fix the situation, to the extent it can be fixed.

According to case law, the absence of a warning will not deny the severance pay when it is clear that the employer cannot or does not intend to fix the situation. Each case is examined on its own facts, so it is better not to rely on the exception in advance.

In practice, before you resign, it is advisable to write to the employer and set out what has changed. Ask for it to be fixed, give the employer a reasonable time to do so, and keep the correspondence. If you do resign in the end, it is advisable to state the reason expressly in the resignation letter.

What notices must you give the employer?

Advance notice. An employee who resigns must give the employer written advance notice. The notice states the date it was issued and the day on which the resignation takes effect (sections 2(b), 2(c) and 5 of the Advance Notice of Dismissal and Resignation Law, 5761-2001 (חוק הודעה מוקדמת לפיטורים ולהתפטרות, התשס״א-2001)). Its length is the same as the notice on dismissal. For example, for a monthly-salaried employee after the first year of employment, it is one month (section 3(3)). An employee who stops working without giving such notice will pay the employer compensation equal to their regular wage for the period for which notice was not given (section 7(b)).

The duty does not apply to an employee “in special circumstances in which they cannot be required to work during the advance notice period”. The Minister may set such circumstances (section 10(1) of that Law). This is a separate provision, in another law and with different wording from section 11(a) of the Severance Pay Law. So it is worth checking the advance notice question separately, before you stop working.

Resignation of a father under section 7(b). Before the date of the resignation he gives the employer written notice on the form in the regulations. As a rule, it is signed by him and by his spouse. When the child is in his sole care because of the spouse’s disability or illness, a medical certificate is attached. The right to severance pay arises only 15 days after the day he fulfilled these duties (regulations 1–3 of the Severance Pay Regulations (Duty to Deliver Notices to the Employer), 5749-1988 (תקנות פיצויי פיטורים (חובת מסירת הודעות למעביד), התשמ״ט-1988)).

A written demand for payment of the severance pay. The Wage Protection Law, 5718-1958, sets a special rule for a person entitled to severance pay other than under sections 1(a) or 5 of the Severance Pay Law. For them, the due date for the severance pay, for the purposes of compensation for late payment, applies only after a written demand was given to the employer. The demand asks for payment of the severance pay and states the ground. If the demand was given after the regular date, the due date is the day it was given (section 20(c) of the Wage Protection Law). So it is worth demanding the severance pay in writing and stating the ground.

And what about unemployment benefit?

Unemployment benefit is paid under the National Insurance Law, and the test there is different. A person who stopped working of their own will, without justification, is not entitled to unemployment benefit for the first 90 days from the day they stopped working. The Minister may determine what counts as justification (section 166(b) of the National Insurance Law [Consolidated Version], 5755-1995). According to the website of the National Insurance Institute (Bituach Leumi), examples of justification include a material deterioration in working conditions, and the health of the employee or of a family member. They also include a change of home or workplace over a distance that the website sets out. A person who resigned for a justified reason attaches documents about the reason to the claim for unemployment benefit.

The conditions are not the same as those in the Severance Pay Law. For example, for a move of home the Severance Pay Regulations measure a distance of 40 km between the new home and the previous one. The National Insurance Institute website describes a different distance test. So the severance pay question and the unemployment benefit question are each checked under their own rules.

Before you resign: a checklist

• Identify which section you rely on (6, 7, 8, 11(a) or another), and check that its conditions are met.
• Keep evidence: medical documents (for health), payslips and correspondence about the change in conditions (for a material deterioration), documents about the move and its date (for moving home).
• For a material deterioration: first write to the employer and give it an opportunity to fix the situation.
• Give written advance notice, unless you cannot be required to work during the notice period.
• State the reason in the resignation letter, and demand the severance pay in writing, stating the ground.
• Do not sign a waiver without checking it. A settlement regarding severance pay and a discharge receipt (הודאת סילוק) are valid only if they were made in writing and state expressly that they concern severance pay (section 29 of the Severance Pay Law).

The employer does not pay: where and when to sue

A claim for severance pay against the employer is filed in the Regional Labor Court. This court has exclusive jurisdiction over claims between an employee and an employer that arise from the employment relationship (section 24(a)(1) of the Labor Court Law, 5729-1969 (חוק בית הדין לעבודה, התשכ״ט-1969)). Such a claim is, as a rule, time-barred 7 years from the day the cause of action arose (sections 5(1) and 6 of the Prescription Law, 5718-1958 (חוק ההתיישנות, התשי״ח-1958)). But compensation for late payment has much shorter deadlines. Details in the guide Limitation period for wage and employment claims.

When the dispute is about the end of the employment itself, see also the page Unlawful dismissal. When wages, overtime or pension were also left unpaid, see Wage claim against an employer.

Frequently asked questions

What counts as a material deterioration in working conditions?

The Law does not define the term. According to the case law of the labor courts, the employee must show three things. First, that there was a material deterioration. Second, that they resigned because of it. Third, that they gave the employer reasonable warning and an opportunity to fix it. This third condition does not apply if it is clear that the employer cannot or does not intend to fix the situation.

Do you have to give advance notice when resigning in circumstances deemed dismissal?

An employee who resigns must give written advance notice (sections 2(b), 2(c) and 5 of the Advance Notice of Dismissal and Resignation Law). The duty does not apply in special circumstances in which the employee cannot be required to work during the notice period (section 10(1)). An employee who stopped working without giving notice they were required to give will pay the employer compensation equal to their regular wage for the missing period (section 7(b)).

I resigned to move home. Am I entitled to severance pay?

Only in the circumstances set in section 8 of the Law and in regulation 12 of the Severance Pay Regulations (Calculation of Severance Pay and Resignation Deemed Dismissal). For example, moving after marriage to the locality where the spouse lives. The distance between the new home and the previous one must be at least 40 km, and the new home must be further from the workplace. A move that does not fall within one of the circumstances in the regulation does not give a right to severance pay under section 8.

I resigned in circumstances deemed dismissal. Will I get unemployment benefit from the first day?

That is a separate question, under the National Insurance Law. A person who stopped working of their own will without justification is not entitled to unemployment benefit for the first 90 days (section 166(b) of the National Insurance Law). According to the National Insurance Institute website, a material deterioration in working conditions and the health of the employee or of a family member are among the examples of justification. The decision is made by the National Insurance Institute, according to its own tests.