Labor

Israel Women's Network v. Minister of Labor & Social Affairs

Case/docket number: 
HCJ 2671/98
Date Decided: 
Tuesday, August 11, 1998
Decision Type: 
Original
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.]

 

The Minister of Labor & Social Affairs (the “Minister”) appointed Respondent 2 to the office of Deputy Director General for the IT & Information System Administration at the National Insurance Institute (IT Deputy). The appointment was for a six-month trial period. Prior to the appointment, eight deputy directors held office in the National Insurance Institute (NII), including one woman. The Petitioner – the Israel Women’s Network – is a public association whose goal is to fight for the promotion of equality and justice between the sexes in Israeli society. The Petitioner argued that the appointment was void because the Minister failed to fulfil his duty to act for proper representation of both sexes among the deputy directors at the NII.

The High Court of Justice (per M. Cheshin) ruled:

A.           (1)         The provisions of sec. 15A of the State Service (Appointments) Law, 5719-1959 – which mandate proper representation of both sexes – apply to civil service employees, but by their language, they do not apply to employees of statutory corporations like the NII (para. 22).

(2)         Section 22(B) of the National Insurance Law [Consolidated Version], 5755-1995, applies the rules for the appointment of civil service employees to the appointment of the employees of the NII. However, the section does not apply to the appointment of the members of the NII Management, which under sec. 18A of that law, also comprises the deputy directors of the NII. Therefore, sec. 15A of the State Service (Appointments) Law does not directly apply to the appointment challenged by the petition (para. 23).

(3)         Section 18A of the Government Companies Law, 5735-1975 – which requires that the composition of a board of directors of a government company reflect proper representation of members of both sexes – does not apply to the appointment under review. Although sec. 60A of the Government Companies Law applies the provisions to statutory corporations, it was only extended to appointments to the Council of the NII, and not to appointments to the Management (para. 23).

(4)         Consequently, the provisions of the law that require proper expression of the principle of equal representation of both sexes apply to the appointment of members of the NII Council and to the appointment of other employees of the NII, but do not apply to the appointment of members of the Management, including the Director of the NII, the Vice Director and the Deputy Directors (para. 24).

B.           Although the appointment of a deputy director at the NII does not require the publication of a tender, it is an act in the field of the public law, and like any act in the public field, the appointment is subject to the general norms of public law. Under public law, the appointing authority must act as a public trustee, with integrity and fairness, without irrelevant considerations, reasonably, equally, and without discrimination. Failure to strictly comply with these principles in making appointments leads to selecting a person who is unfit for the office, it prejudices the civil service, and also raises a concern that a person unlawfully appointed will similarly make appointments in reliance upon improper principles (para. 28).

C.           (1)         Discrimination against women has plagued society from time immemorial. Such ongoing discrimination creates certain lifestyles and thought patterns that cannot be uprooted overnight. Moreover, ongoing discrimination over the course of so many years has created layers of discrimination – one on top of one another – and thus we have cumulative discrimination – discrimination in the attire of a quasi-status (para. 39).

(2)         Discrimination against women is generic discrimination. As distinct from particular discrimination, the person who is being discriminated against “represents” an entire class. Therefore, such discrimination inherently raises the representation issue. Consequently, one of the ways of uprooting such discrimination is by imposing a duty to arrange for the representation of women in various public entities (para. 40).

(3)         The question whether inequality and discrimination have been created will be examined according to the result, and not according to the intentions. No matter how pure the intentions may be, if the result is  discriminatory, the actions will be disqualified. In our case, it is hard to be disabused of the impression that discrimination has played a role in the lack of proper representation of women at the NII Management. It is not special, conscious discrimination, but generations-long discrimination (para. 45; para. 34).

(4)         The duty to give proper expression to the principle of equal representation of both sexes requires vigorous actions to achieve proper representation of women in the civil service. This duty is part of a binding, general doctrine that applies to every appointment or selection in the civil service (para. 46).

D.          (1)         There are various models for the implementation of the doctrine of “proper representation” of women. However, in the circumstances of the present case, there is no need to delve into the meaning of this expression inasmuch as where there is only one woman among nine deputy directors at the NII, the situation clearly violates the proper representation requirement (para. 47).

(2)         Inasmuch no specific, direct statutory requirement applies to the appointment under review, but rather a consideration that the Minister must take into account in exercising his discretion, we cannot conclude that the requirement to give proper representation to women in the NII Management must result in the appointment of a woman to the position of IT Deputy (para. 48).

(3)         Under the circumstances, the Minister’s duty is to search for suitable women candidates for the position. This is a positive duty to investigate and search, to gather information, to sort the relevant information and ascertain its credibility, in a thorough, rational and pertinent manner (paras. 52-54).

(4)         The Respondents’ vague, general reply shows that the Minister failed to meet the burden imposed by the aforesaid duty to initiate and search for suitable women candidates for the said office (paras. 48, 55).

(5)         Under the circumstances, in view of the fact that Respondent 2 took office – for a trial period – several months before the issuing of this judgment, it would not be proper to order the immediate revocation of his appointment. Rather, the Minister must perform his duty under the doctrine of equal representation of women to search for suitable women candidates for the office, and to present them to the appointment committees by the expiration of current trial period, and thereafter decide who will be appointed to the position under consideration (paras. 56-57).

Voting Justices: 
Primary Author
majority opinion
Non-writer
majority opinion
Non-writer
majority opinion
Full text of the opinion: 

HCJ 2671/98

 

 

Petitioner:                               The Israel Women’s Network

           

                                                                        v.

           

Respondents:               1.         The Minister of Labor & Social Affairs

                                    2.         Baruch Marom

 

           

 

In the Supreme Court sitting as High Court of Justice   

[August 11, 1998]

Before Justices M. Cheshin, I. Zamir, D. Beinisch

Supreme Court cases cited:

[1]       HCJ 453/94, 454/94 The Israel Women’s Network v. Government of Israel, IsrSC 48(5) 501.

[2]       HCJ 4566/90 Dekel v. Minister of Finance, IsrSC 45(1) 28.

[3]       HCJ 987/94 Euronet Golden Lines (1992) Ltd. v. Minister of Communications, IsrSC 48(5) 412.

[4]       HCJ 703/87 Crown (Keren) v. Civil Service Commissioner, IsrSC 45(2) 512.

[5]       HCJ 6163/92, 6177 Eisenberg v. Minister of Building and Housing, IsrSC 47(2) 229.

[6]       HCJ 7175/95 Arad v. Knesset Speaker, IsrSC 20(1) 573.

[7]       HCJ 8160/96, 6458/96 Abu Krinat v. Minister of the Interior, IsrSC 52(2) 132.

[8]       HCJ 727/88 Awad v. Minister of Religious Affairs, IsrSC 42(4) 487.

[9]       HCJ 98/69 Bergman v. Minister of Finance, IsrSC 23(1) 693.

[10]     HCJ 7111/95, 8195 Federation of Local Authorities v. Knesset, IsrSC 50(3) 485.

[11]     HCJ 953/87, 1/88 Poraz v. Mayor of Tel Aviv Jaffa; Labor Faction of the Tel Aviv – Jaffa Municipality v. Tel Aviv – Jaffa City Council, IsrSC 42(2) 309.

[12]     HCJ 685/78 Omri Mahmud v. Minister of Education, IsrSC 33(1) 767.

[13]     CA 6926/93 Israel Shipyards Ltd. v. Israel Electric Corporation Ltd., IsrSC 48(3) 749.

[14]     HCJ 1000/92 Bavli v. Great Rabbinical Court, IsrSC 48(2) 221.

[15]     HCJ 6051/95, 6086/95 Rekanat v. National Labor Court et al; El Al Israel Airlines Ltd. v. National Labor Court, IsrSC 51(3) 289.

[16]     HCJ 693/91 Efrat v. Director of the Population Registry, IsrSC 47(1) 749.

[17]     HCJ 104/87 Nevo v. National Labor Court, IsrSC 44(4) 749.

[18]     HCJ 153/87 Shakdiel v. Minister of Religious Affairs, IsrSC 42(2) 221.

[19]     CFH 1558/94 Nafisi v. Nafisi, IsrSC 50(3) 573.

[20]     HCJ 4541/94 Alice Miller v. Minister of Defence [20], IsrSC 49(4) 94.

[21]     CA 84/64 Beit Hananya Ltd. v. Friedman, IsrSC 18(3) 20.

[22]     CA 89/85 Beit Herut – Workers’ Cooperative for Cooperative Agricultural Settlement Ltd. v. Glassman, IsrSC 41(3) 526

[23]     CFH 7325/95 Yediot Aharonot Ltd. v. Kraus, IsrSC 52(3) 1

[24]     HCJ 5503/94 Segal v. Knesset Speaker, IsrSC 51(4) 529

[25]     CA 3798/94 A. v. B., IsrSC 50(3) 133

 

Labor Court cases cited:

[26]     LabA MD/4-20 “Halamish” Ltd. v. The Tel Aviv Jaffa Workers Council, IsrLC 15, 320.

[27]     LabA MH/168-3 Alfariah v. Rotenberg, IsrLC 19 515

[28]     LabA 56/129-3 Plotkin – Eisenberg Brothers Ltd. (unpublished).

[29]     LabA 51/8-3 State of Israel v. Gestetner Israel Ltd., IsrLC 24, 65.

[30]     LabA 33/3-25 Flight Attendant Crew Committee v. Edna Hazin, IsrLC 4, 365.

 

American cases cited:

[31]     Frontiero v. Richardson, 411 U.S. 677, 93 S.Ct. 1764 (1973):

 

 

Israeli articles cited:

[32]     Y. Tirosh, Proper Representation of Members of Both Sexes in the Civil Service, 30 Mishpatim 183.

[33]     I. Zamir, Political Appointments in Judicial Review, 21 Mishpatim 145.

[34]     O. Kamir, What's in a Woman's Name, 27 Mishpatim 327.

[35]     F. Raday, About Equality [35], in The Status of Women in Society and the Law (F. Raday, C. Shalev & M. Liben, eds.) (1995) 19.

[36]     C. Shalev, On Equality, Difference and Sex Discrimination, in Landau Book, vol. II, (A. Barak, E. Mazuz eds.) (1995) 893.

[37]     A. Rosen, Male Culture and the Status of Women in Technology, in Women – The Rising Power: Promotion of Women at Work, Shattering the "Glass Ceiling", 2nd ed. (A. Maor, ed.) (1992) 124.

 

Attorneys for the Petitioner:   Adv. Rachel Benziman, Adv. Dafna Heker

Attorney for Respondent 1: Adv. Osnat Mendel

 

Judgment

 

Justice M. Cheshin:

1.         On March 29, 1998, the Minister of Labor & Social Affairs appointed Mr. Baruch Marom to the office of Deputy Director  of the IT & Information Systems Administration of the National Insurance Institute. The appointment was for a six-month trial period. Prior to the appointment, eight deputy directors held office in the National Insurance Institute, including one woman who was on leave (in circumstances under which it was reasonable to assume she would not return to work). The Petitioner – the Israel Women’s Network – is a public association whose goal is to fight for the promotion of equality and justice between the sexes in Israeli society. The Petitioner claims that the appointment is void because the Minister of Labor & Social Affairs, who holds the appointment power, failed to fulfil his important obligation to act for proper representation of both sexes among the deputy directors at the National Insurance Institute. This is the issue we will address: proper representation of members of both sexes – women and men – in the management of the National Insurance Institute in particular, and in the civil service in general.

            For the reader’s convenience: the Minister of Labor & Social Affairs, Respondent 1, will be referred to as the Minister or the Minister of Labor & Social Affairs; Mr. Baruch Marom, Respondent 2, will be referred to as Marom; the Deputy Director  for the IT & Information System Administration will be referred to below as the IT Deputy Director.

2.         The order of the discussion will be as follows: first we will look into the structure of the National Insurance Institute and its procedures for appointments insofar as relevant. We will then describe the proceedings in the appointment of Marom to the office of IT Deputy Director and explain how they fit into the Institute's  system. In the last part of the opinion, we will address the legal issues that arise.

The structure of the National Insurance Institute

3.         As prescribed by sec. 8(a) of the National Insurance Law [Consolidated Version], 5755-1995 (hereinafter: the Law or the NII Law), the National Insurance Institute is a statutory corporation that has three tiers of officers and employees.

The supreme authority of the National Insurance Institute is the National Insurance Institute Council (sec. 8(b) of the Law). Its main role is to oversee the actions of the National Insurance Institute and its management (sec. 12(1)). The Council Chairman is the Minister of Labor & Social Affairs (sec. 14 of the Law). He is the minister responsible for the implementation of the Law (sec. 400 of the Law), and he is the  supervisor of the National Insurance Institute (sec.  8(c)). In general, the Council can be described as essentially the same as a board of directors in another corporation. The Law does not include a provision on the manner of appointment of the Council members, other than the statement that the Council’s composition, manner of establishment, and conditions for termination of membership will be determined following consultation with the Labor & Social Affairs Committee (sec. 11(a) of the Law).

Second tier – under the Council – is the Management layer. The Management is the managerial and executive authority of the National Insurance Institute (sec. 8(b) of the Law), and it is supervised by the Council (sec. 12(1)). The members of the Management are the National Insurance Institute Director, who is the Administrative Chairman, the Vice Director and the Deputy Directors (sec. 18 of the Law). The Director, Vice Director and the Deputy Directors, are appointed by the Minister after consulting with the Council (sec. 20 of the Law).

Third tier – under the Management – is the tier of “other employees”. They are the subject of sec. 22 of the Law (under the title “Organization”), according to which the Management appoints the “other employees of the Institute” (sec. 22(a)). What is most relevant to the present case is sec. 22(b) of the Law, whereby “the appointment of the  Institute’s employees under this section shall be in accordance with the rules for the appointment of State employees, with such changes as may be required…”.

4.         Let us summarize for our purposes and say as follows: There is no direct provision in the Law on the matter of the appointment of the Council members; the  members of the Management are appointed by the Minister; the other employees are appointed by the Management in the same manner that State employees are appointed.

 

Marom’s appointment process

5.         The outgoing IT Deputy left office in October 1997, and in March 1998, as stated, the Minister appointed Marom to the vacated office. Truth be told, it is not clear to us how  the Minister found Marom – or perhaps, how Marom found the Minister – however, we will briefly describe the stages of the process, insofar as they were laid out before us. We received a  description of how candidates are found from Mr. Yossi Tamir, the outgoing Director  of the Institute. Mr. Tamir stated as follows before the Institute’s appointment committee (which we will discuss below):

...we did not publish a notice in the newspaper, but rather a search is performed mainly by companies that deal with such matters, and from  acquaintance with people in the field…an advertisement for the position of deputy director has never been placed in a newspaper, so the Minister did not deviate from the existing practice. About 24 candidates applied, some of whom were also directly referred to us by the Minister. Out of all of the applicants, we selected a small number of candidates. There were candidates who were referred by the Minister who were not accepted. Several candidates remained for the final stage, I interviewed them, spoke with them. In the last stage, the 4 candidates were brought to be interviewed by the Minister, and of the 4 candidates, the minister chose Baruch Marom (p. 2 of the committee minutes of March 23, 1998).

            The Minister’s statements in his affidavit will complete the description:

…candidates who approached me, including Mr. Baruch Marom, information on whose qualifications was brought to my knowledge several months prior to that, were also referred by me to be examined by the National Insurance Institute Director …

I did not receive a recommendation from parties outside the ministry with regard to Respondent no. 2, nor with regard to the other candidates, but I did orally consult with both the Director  of the Ministry of Labor & Social Affairs and the National Insurance Institute Director …

In the consultation that I held, it was emphasized to me that for the IT Department, at this time, the issue of the system’s management and organization is of greater and more important weight than the specific professional issue, although a person who lacks experience and knowledge in the field of data processing cannot be appointed for the job…

…in addition, I took into consideration the suitability and qualifications of the candidate to serve as a member in the National Insurance Institute Management in all of its fields of operation.

After a process of examination of various candidates, I chose Mr. Baruch Marom out of four candidates.

…the consideration of the system’s management and stabilization after a reorganization and big logistic changes tipped the scales in choosing him for the position, although there were better computer professionals among the other candidates.

There are currently several division managers in the IT Department. Their suitability for the offered position was examined, but none of them was found to be able to lead the system toward the goals that it faces. The situation was similar when the former deputy director in this area was appointed (pp. 2-4 of the reply affidavit of July 20, 1998).

Thus, from all of the aforesaid we have learned the following: out of the candidates of whom the Minister heard in one way or another, and after having consulted with the Director  of the Ministry of Labor & Social Affairs and the National Insurance Institute Director , the Minister reached the conclusion that it is Marom who is the candidate suitable for the office of IT Deputy Director.

6.         Once the Minister found that Marom was the proper candidate for the office, he presented the matter to two committees: the Appointments Review Committee that was established under the Government Companies Law, and to the Appointments Committee of the National Insurance Institute Council. Let us review the deliberations that were held by these two committees, in their chronological order.

The proceedings that were held by the Appointments Review Committee under the Government Companies Law

7.         Pursuant to his authority in Section 18B and 60A(b)(2) of the Government Companies Law, 5735-1975 (hereinafter: the “Government Companies Law”), the Minister of Justice appointed a committee called the “Appointments Review Committee” which is a “committee for the review of the qualifications and suitability of candidates for the office of a director, chairman of the board of directors, or director  of a government company…”. Inter alia – and fundamental to our case – the committee is supposed to review whether the composition of the board of directors of a government company gives “proper expression to representation of both sexes.” (sec. 18A(a); see para. 23 below). Since the National Insurance Institute is a statutory corporation, the aforesaid legal provision was applied to the appointment of its director and deputy directors (see: the provisions of sec. 60A of the Government Companies Law and the provisions of sec. 20 of the National Insurance Law).

8.         Thus, on December 31, 1997, the Minister requested that the Chairman of the Appointments Review Committee, Judge (emeritus) Mordechai Ben Dror, bring the matter before the committee over which he presides, for approval of the appointment of Marom to the office of IT Deputy Director.

9.         At this point we will take a small step back, to the appointment of another deputy director at the National Insurance Institute, an appointment that preceded Marom’s appointment. It was in the middle of November 1997 – about six months before his request with regard to Marom – that the Minister sought to appoint Mr. Efraim Shani as a member of the National Insurance Institute’s Management (we should recall that the Management members are the Director, Vice Director, and Deputy Directors). As customary, and as he is legally obligated, the Minister presented the request to the Appointments Review Committee, and the committee approved the appointment. However, on November 30, 1997, the committee chairman wrote the Minister a letter as follows:

In response to your request, I respectfully inform you that the Appointments Review Committee, pursuant to its authority under sec. 60A of the Government Companies Law, has examined Mr. Efraim Shani’s candidacy for membership on the National Insurance Institute’s Management.

The committee approves the appointment of Mr. Efraim Shani as member of the National Insurance Institute’s Management.

I would like to direct your attention to the fact that in the aforesaid Management there is only one woman as opposed to 8 men (including the aforesaid candidate who was approved at the committee meeting of November 27, 1997).

This state of affairs is inconsistent with the provisions of the law and the judgment in HCJ 454/94.

The Appointment Review Committee will examine the candidacies of men only after women candidates will be proposed to it (emphasis added – M.C.).

Note: the judgment that is mentioned in the letter is HCJ 453/94, 454 The Israel Women’s Network v. Government of Israel [1].

Thus, the Appointments Review Committee Chairman takes note of the discrimination against women in the National Insurance Institute’s Management, and sends a quasi–warning to the Minister that the committee will “will examine the candidacies of men only after women candidates will be proposed to it ”. Clear and unequivocal language.

10.       Back to our case. The Appointments Review Committee examined the Minister’s request to appoint Marom for office of IT Deputy Director, and on February 3, 1998, the committee chairman wrote a letter to the Minister as follows:

I would like to inform you that in its meeting of February 2, 1998, the committee resolved not to address the candidacy of the aforementioned.

The reason for that stems from the provisions of sec. 18A of the law [the Government Companies Law – M.C.] and the Supreme Court’s ruling in HCJ 454/94, and the Attorney General’s letter dated December 31, 1997, on the issue of proper representation of both sexes.

To date, only one woman holds office in the Council as opposed to 7 men.

This situation is inconsistent with the aforesaid provisions.

The committee has written to you on this issue before (see the committee’s decision of November 30, 1997, attached hereto), and referred you to the unfair representation of women and requested that women candidates be proposed to it.

The Appointments Review Committee will address the candidacy of the aforementioned only after women candidates will be proposed to it (emphasis added – M.C.).

True to its previous letter, the committee denied the Minister’s request and informed him that it would address Marom’s candidacy “only after women candidates will be proposed to it”.

11.       The Minister did not despair, and following a conversation with the committee chairman,  he wrote him the following letter on February 26, 1998:

Pursuant to our conversation and correspondence on the said issue, I wish to re-emphasize the vast significance of appointment of an IT Director at the National Insurance Institute.

This is a principal officer of the National Insurance Institute, who is in charge of the National Insurance Institute’s entire computerized system. Such a system is the essential tool without which it is impossible to perform the current work of the National Insurance Institute that affects the entire population of the State of Israel, both with respect to timely payment of pensions and the collection of insurance fees.

In addition, this deputy director is responsible for the development, operation and maintenance of the computerized systems, determination of the development approach and the necessary tools for that, provision of communication services to units at the National Insurance Institute head office and branches, centralization of data and information in the areas of social security and the establishment of a database in these areas.

Furthermore, following the retirement of the previous Deputy Director, the Director decided to assume the responsibilities of the IT Deputy Director, while noting the centrality and significance of the aforesaid role.

The issue of proper representation of members of both sexes (sec. 18A) will be given proper weight in future appointments.

I will be grateful if you bring the appointment of Mr. Baruch Marom to the position of IT Deputy Director at the National Insurance Institute for the review of the committee (emphasis added – M.C.).

This letter is somewhat puzzling, if only because it does not provide an answer to the committee chairman’s complaint about the failure to properly represent women in the National Insurance Institute’s Management, but rather the Minister replies that the position of IT Deputy Director is extremely important. Does this mean that the importance of the position indicates that only a man can fill it properly? All that the Minister tells us is that “the issue… will be given proper weight in future appointments”.

12.       Thus, the issue of Marom’s appointment was again raised before the Appointments Review Committee, and this time the committee accepted the request. In the words of the committee chairman to the Minister in his letter of March 11, 1998:

At the meeting on February 2, 1998, the committee resolved not to address Mr. Baruch Marom’s candidacy for deputy director and member of the National Insurance Institute’s Management, in view of the fact that the Management is not properly representative (there is only one woman as opposed to 8 men).

The committee wrote to you and to the deputy director of your ministry on this matter in its letter of February 3, 1998, and you both mentioned the fact that for it to be possible to appoint a woman for the National Insurance Institute’s Management, it is not sufficient that a suitable woman candidate to be found. The reason for this being that under the law, a woman candidate can only be a woman who holds office as a vice director or deputy director of the National Insurance Institute (see sec.18 of the National Insurance Law). Therefore, a suitable woman candidate must first be found for appointment to the position of vice or deputy as aforesaid, so that she may then be appointed as a member of the Management.

You notified the committee that in the next appointment for the position of one of the deputy directors you intend to appoint a woman candidate to such a position and in any event, and when a woman is appointed to such a position, her candidacy for membership in the National Insurance Institute’s Management will, in any event, be presented to the committee.

Thus, the committee was asked to approve the appointment of the aforementioned candidate subject to the aforesaid, pursuant to which the next appointment as one of the National Insurance Institute’s deputies will be a woman, and that once such a woman is appointed, her candidacy will be submitted for approval by the committee as a member of the National Insurance Institute’s Management.

Subject to the receipt of a letter as aforesaid, the committee approves the candidacy of the aforementioned (emphasis added – M.C.).

The Minister undertook before the committee chairman – apparently orally – that the next appointment for a deputy’s office would be a woman, and consequently, the committee agreed to approve Marom’s appointment. At the committee chairman’s request, the Minister put his undertaking in writing, and as he stated in his letter dated March 16, 1998:

I would like to thank you and the committee members for having considered the qualifications of Mr. Baruch Marom for the position of IT Deputy Director and member of the National Insurance Institute’s Management, and approved his candidacy.

With respect to your letter, I notify you that when it is decided in the future to appoint a deputy director for the National Insurance Institute (who is also a member of the Management by virtue of sec. 18 of the National Insurance Law), I will act in accordance with what was stated in your above-referenced letter.

Marom’s appointment was completed, as aforesaid, on March 29, 1998.

13.       While the Minister and the committee chairman were exchanging letters on the subject of Marom’s appointment, Ms. Hanna Ranel – Director of the Software Infrastructure Division of the IT Department, who has been working at the National Insurance Institute for some 26 years – wrote to the Minister and presented her candidacy for the office of IT Deputy Director. In her letter, Ms. Ranel specified her experience and qualifications, and further emphasized the importance of appointing a woman, particularly in view of the scarcity of women in the National Insurance Institute’s Management. The Minister’s office confirmed to Ms. Ranel that her letter was received. Beyond that, Ms. Ranel received no further response.

14.       The Petitioner in our case also wrote to the Minister, and directed his attention to Ms. Ranel’s potential candidacy. In her letter, the Petitioner also pointed out the need to act for the proper representation of the sexes in the National Insurance Institute’s Management. At the same time, the Petitioner also contacted the chairman of the Appointments Review Committee.

The committee chairman answered the Petitioner on March 16, 1998, stating, inter alia, the following:

The committee over which I preside has decided to inform the Minister that it will only appoint a female candidate as a member of the National Insurance Institute’s Management, and in any event, it is necessary to first appoint a woman for the position of deputy director of the National Insurance Institute.

The Minister of Labor & Social Affairs agreed and confirmed in writing that the next appointment position [sic – M.C.] of deputy director of the National Insurance Institute will be of a woman. Obviously, this is not about just one additional appointment, but at this stage (after there is already one woman in the position) there will be at least one more woman, and thus we will also continue to maintain this principle of equality in the future as well.

And finally, about one week after the completion of Marom’s (temporary) appointment, on April 5, 1998, the Minister answered the Petitioner’s letter to him, as follows:

I hereby inform you that I am acting for the promotion of women in all of the systems for which I am responsible.

The promotion of women at the level of the National Insurance Institute’s Management and in the other positions in this institute is and will be carried out in the future, and as necessary, to a better extent than in the past.

15.       Thus far – the proceedings that in the Appointments Review Committee under the Government Companies Law.

The proceedings before the Appointments Committee of the National Insurance Institute Council

16.       As provided in sec. 20 of the National Insurance Law, the Minister is to appoint a deputy director for the National Insurance Institute after consulting with the Council. The Council delegated its power to an appointments committee, and the issue of Marom’s appointment was raised before that committee in its meeting of March 23, 1998 (following the approval of the appointment by the Appointments Review Committee under the Government Companies Law). The committee examined Marom’s candidacy, and following deliberation, resolved to approve it for a trial period, as stated in its resolution dated March 23, 1998:

Resolution: The committee advises the Minister to appoint Mr. Baruch Marom as IT Deputy Director of the National Insurance Institute.

In view of the nature of the position, its centrality in the National Insurance Institute and essential nature, the committee recommends to the Minister that the initial six-month period from the date of appointment be a trial period.

Upon conclusion of such period, the opinion of the National Insurance Institute Director on the functioning of Mr. Baruch Marom will be presented to the Appointments Committee.

The aforesaid resolution led to Marom’s appointment for a six-month trial period.

The issues in dispute

17.       The Petitioner challenges Marom’s appointment to the office of IT Deputy Director at the National Insurance Institute, based on two main arguments. One argument is that the Minister failed to fulfill his obligation to act for the proper representation of women in the National Insurance Institute’s Management. The second argument focuses on the issue of Marom’s qualifications. According to the Petitioner, Marom lacks proper qualifications for the office of IT Deputy Director, which raises a concern that his appointment was based on irrelevant considerations, and that such irrelevant considerations also resulted in the failure to find women candidates with qualifications that are similar to, or even exceed, Marom’s qualifications.

Let us begin with the second argument: the issue of Marom’s qualifications.

The issue of Marom’s qualifications

18.       The Petitioner claims, as aforesaid, that Marom lacks qualifications to hold office as IT Deputy Director, and its main arguments are as follows:

First, the absence of any professional education in the computer field, which – needless to say – is an essential qualification for appointment to the office of IT Deputy Director. In this context it should be noted that the National Insurance Institute’s Appointments Committee also raised concerns with regard to that shortcoming in Marom’s professional education. So, for example, we hear the following from the Director of the Ministry of Labor & Social Affairs at the committee’s meeting: “It seems to me that the candidate is suitable for the position, however, if there were someone who had previously managed professional systems, it would have been preferable”. And the question is: Could no man or a woman be found who previously managed professional systems? Moreover, upon taking office, Marom requested that a professional advisor be appointed for him. This request was refused.

The Minister’s answer to these arguments is that the IT Department is currently undergoing re-organization,. Therefore, what should be emphasized in appointing the Deputy Director is specifically his managerial and organizational abilities, as distinct from his computer abilities. Thus, it was Marom’s organizational skills that led to him being chosen “even if among the other candidates there were better computer professionals”.

The second argument: It was not proven that Marom has organizational and HR management qualifications. Neither his CV nor his interview by the committee revealed the scope of the systems that he managed or the number of people over which he was directly in charge.

Finally: The Petitioner finds support for its arguments in the doubts that arose in the Appointments Committee with respect to Marom’s suitability for the designated position. Those doubts led the committee to decide to appoint him for a six-month trial period.

The Minister’s answer is that Marom has proper experience, and in any event, his suitability for the position will be examined at the end of the trial period. The Minister finds support for the appointment in the decision of the Appointments Review Committee under the Government Companies Law.

19.       We pondered the Petitioner’s argument both in terms of the strength of the opposing considerations and in terms of whether this is the proper case for intervening in the Minister’s decision. However, we have chosen to pave a different route, and have, therefore, decided not to rule on this cluster of arguments presented by the Petitioner. Moreover, Marom has been holding office since the end of March, 1998, some four-and-a-half months, and even if it would have been proper for us to address his suitability for the position, at present – approaching the expiration of the six trial-months – it would not be proper for us to do so.

Thus, let us turn to the Petitioner’s main argument on the issue of discrimination against women in the National Insurance Institute’s Management.

Does Marom’s appointment violate any statutory provisions?

20.       Pursuant to his authority under the National Insurance Law, the Minister appointed Marom to the office of IT Deputy Director of the National Insurance Institute. Did the Minister violate an obligatory statutory provision in making that appointment? Did he skip over a mandatory precondition to the appointment? And in our case, in making Marom’s appointment, did the Minister breach a statutory duty for the proper representation of women in the National Insurance Institute’s Management?

21.       According to the Petitioner, the Minister did indeed breach a statutory duty, as set forth in sec. 15A of the State Service (Appointments) Law, 5719-1959 (hereinafter: the Appointments Law). That duty is to give proper representation to women in the National Insurance Institute’s Management. Is this indeed the case? Let us set our sights on the law and find out.

Section 15A of the Appointments Law

22.       Section 15A of the Appointments Law (as originally enacted) tells us the following:

Fair representation for members of both sexes           

15A.    (a)        Among the employees in the State service, proper expression shall be given, to the extent that circumstances allow, to the representation of members of both sexes (hereinafter: proper representation).                                  

(b)       If the Civil Service Commissioner deems that among the employees of a Ministry, or a unit of a Ministry, or in a type of position, there is no proper representation as aforesaid, he shall act for the promotion of proper representation, to the extent that circumstances allow.

(c)        The Commissioner’s acts may be performed in a plan that will include provisions on preference in a tender for a position, or a group of positions, or a rank, or a group of ranks that will be specified in the plan, and for the period to be determined therein. The plan requires the approval of the Service Committee. In this subsection, “preference” – giving preference in a tender to a member of the sex that is not properly represented, when candidates of both sexes have similar qualifications.                                    

(d)       The Civil Service Commissioner will inform the Knesset’s Constitution, Law & Justice Committee of the principles of the plan as provided in subsection (c). The principles are not required to be published in the Official Gazette.

(In the meantime, the section was amended by the Equal Opportunities for Disabled Persons Law, 5758-1998, to confer rights to proper representation to disabled persons. However, we will refer to the original version, which is the currently binding version insofar as proper representation of members of both sexes is concerned).

This law derives from the principle of equality, and includes two secondary rules with respect to appointments in the civil service: first, the rule that mandates that “proper expression shall be given, the extent that circumstances allow, to the representation of members of both sexes” (sec. 15A(a)); and second, when it arises that the representation is improper anywhere in the civil service, the Civil Service Commissioner will “act” for the “the promotion of proper representation, to the extent that circumstances allow” (sec. 15A(b) and (c)). These two secondary rules are united as one, and the purpose of both is to do what can be done for the proper representation of both sexes in the civil service.

Under the assumption that sec. 15A of the Appointments Law governs Marom’s appointment, it would seem that the Minister did not do what is required for the appointment of a woman to the National Insurance Institute’s Management – he failed to give “proper representation” to women in the Management, and he certainly did not take “affirmative action”. However, the question is: Does sec. 15A apply to appointments of deputy directors in the National Insurance Institute? We checked, and found no legal basis for this argument.

Section 15A of the Appointments Law can apply to appointments of deputy directors in the National Insurance Institute by virtue of three sources: By virtue of the Appointments Law, by virtue of the National Insurance Law, or by virtue of some other, third law. As for the Appointments Law, we do not find that sec. 15A applies to appointments of deputy directors in the National Insurance Institute. The Appointments Law is solely applicable in the civil service, and the National Insurance Institute is not part of the civil service. We did not find a third law and therefore only the National Insurance Law remains as a source. As for the National Insurance Law, we have seen above (in para. 3) a description of the three tiers of people holding office and working in the National Insurance Institute, and we learned that “the rules for the appointment of State employees” (as provided in sec. 22(b) of the National Insurance Law) apply to “other employees” – “other employees of the office[1][sic.[” in the words of sec. 22(a) of the Law – in the National Insurance Institute. The Law refers to the third tier that we discussed, as distinct from the tier of the Director, Vice Director and the Deputy Directors, and as distinct from the tier of the Council members. Thus, we find that the provisions of sec. 15A do indeed apply to the “other employees” as prescribed in sec. 22 of the National Insurance Law – “other  employees of the Institute” prescribed in sec. 22(a) – and at the same time do not apply to the Council members or the Board members.

Thus, sec. 15A of the Appointments Law does not directly apply to the Petitioner’s case.

Section 18A of the Government Companies Law

23.       Everyone agrees that sec. 18A of the Government Companies Law does not apply to Marom’s appointment. However, as we will see below, the description of the relevant background will be incomplete if we do not discuss this legal provision as well, if only briefly. Section 18A tells us as follows:

Proper representation for both sexes

18A.    (a)        The composition of a board of directors of a government-owned company shall express proper representation of members of both sexes.

(b)       Until expression of proper representation as aforesaid is achieved, the ministers will appoint, to the extent that circumstances allow, directors who are members of the sex that is not properly represented at such time in the company’s board of directors.

If we compare this section of the law to sec. 15A of the Appointments Law (see para. 22 above) we can see that the two are substantially the same, and two purposes unite them: one, by way of a principle, to give proper representation to members of both sexes in various institutions, and two, in view of the unfortunate history with regard to the improper representation of women (we say “women” although the language of the law is neutral) – to act for the preference of women in appointments to such institutions.

Like sec. 60A of the Government Companies Law, sec. 18A – and additional provisions of the Government Companies Law, as well – were applied to statutory corporations. However, sec. 18A – unfortunately – as distinct from other provisions of the Government Companies Law – was only applied to the appointment of members to the National Insurance Institute Council. Originally, sec. 18A was not applied to the appointment of directors  of government companies, and for this reason, it would appear, it was also not applied to the appointments of the National Insurance Institute Director, Vice Director and Deputy Directors. Hence, this law that prescribes equal representation and affirmative action does not apply to the appointment of the members of the National Insurance Institute’s Management.

24.       Now, let us take a closer look at the National Insurance Law and be amazed by the miracle, if it indeed is a miracle. As we have seen (above, para. 3), the offices and positions at the National Insurance Institute are arranged in three tiers: the Council tier – which is the upper tier; the Management tier – which is the middle tier; and the tier of the “other employees of the Institute” – which is the third tier. The Council tier – the upper tier – is subject to sec. 18A of the Government Companies Law. The Council must express proper representation of members of both sexes and “until the expression of proper representation is achieved” the ministers must exercise affirmative action. The same also applies to the bottom tier – the tier of “the other employees of the Institute” – that must bend the knee and bow to the provisions of sec. 15A of the Appointments Law. The civil service must express proper representation of members of both sexes, and in the absence of proper representation, the Service Commissioner (in our case: the Management) must act to further proper representation by various methods listed in the law. But as for the middle echelon – the Management – the manner of appointment of its members, surprisingly, neither bends the knee nor bows to any statutory norm whatsoever. As it is written: “A thousand may fall at thy side, and ten thousand at thy right hand; it shall not come nigh thee” (Psalms 91:7).

25.       Now that we have found that the appointment of a deputy director of the National Insurance Institute is neither subject to sec. 15A of the Appointments Law, nor to sec. 18A of the Government Companies Law, has our journey has come to a dead-end? In appointing a deputy director of the National Insurance Institute, can the Minister choose whomever he pleases without being bound by any norm whatsoever that pertains to equality of the sexes? Or does some binding norm apply to the Minister? This is the question that we will now address, turning from the general to the particular, from the wide to the narrow, from basic principles to rules, and from the legal system as a whole to the National Insurance Law.

From the general to the particular

26.       Our path will be as follows: first we will discuss principles that apply to the process of appointment of people to the civil service; we will move on to discuss the principle of equality as one of the aforesaid principles; we will bring ourselves closer to the principle of equality in applying it to “members of both sexes”, we will try to understand the unique nature of the principle of equality between women and men; we will move on to legislative affirmative action; and we will try to learn of the existence – or non-existence – of a doctrine granting proper representation to women in public entities.

Basic principles of appointment procedures in public law; the principle of equality; the principle of equality between women and men

27.       The rules of tenders apply to the majority of offices and positions in the civil service. Any tender – if performed properly and with integrity – has the power to maximize the best: anyone who fulfills the tender conditions can present candidacy, and ultimately, the best candidate will be chosen. The tender method will bring the best, not the closest, to the civil service: LabA MD/4-20 “Halamish” Ltd. v. The Tel Aviv Jaffa Workers Council [26],  327. Admittedly, the tender method did not succeed in eliminating discrimination against women. For this reason – among others – sec. 15A(c) of the Appointments Law was also enacted (see para. 22 above). For the interpretation of this provision of the law, see: Y. Tirosh, Proper Representation of Members of Both Sexes in the Civil Service [32]. However, everyone would agree that the tender method is the best that has been found until now – if you will: the method that constitutes the lesser of evils to maximize the best and minimize the worst.

            In the present case, the Minister is not obligated to issue a tender, and in any case – and unlike in a tender – no person has a right to propose his candidacy for the office of Deputy Director of the National Insurance Institute. Thus, for example, Ms. Hanna Ranel, Director of the Software Infrastructure Division at the IT Department and an National Insurance Institute employee for some 26 years. Ms. Ranel proposed her candidacy for the office of IT Deputy Director, however, other than a confirmation of the receipt of her letter, she received no response whatsoever.

            Thus, the relevant question is, are there no public-law norms that provide guidance to the Minister and obligate him to act in a certain manner?

28.       The appointment of a deputy director at the National Insurance Institute is an act in the field of public law, and like any act in the public field, the appointment is subject to the accepted  norms of public law (which constitute public law). When acting within public law, the appointing authority acts as a public trustee, and as nothing belongs to a trustee, so, nothing belongs to the appointing authority.  And as a trustee, it is required to behave like a trustee: with integrity and fairness, and without weighing irrelevant considerations, reasonably, equally, and without discrimination, see HCJ 4566/90 Dekel v. Minister of Finance, [2] 33; HCJ 987/94 Euronet Golden Lines (1992) Ltd. v. Minister of Communications, (the Euronet case [3]); HCJ 703/87 Crown (Keren) v. Civil Service Commissioner, [4] 519; HCJ 6163/92, 6177 Eisenberg v. Minister of Building and Housing, (the Eisenberg case [5]). The best will win and those who are not quite as good will wait their turn. Thus, for example, the authority may not take political party affiliations into consideration for a candidate’s benefit (HCJ 4566/90 Dekel [2] above, and pursuant thereto, Itzhak Zamir’s article Political Appointments in Judicial Review [33]; HCJ 7175/95 Arad v. Knesset Speaker [6], 604-610; LabA MH/168-3 Alfariah v. Rotenberg [27]; HCJ 8160/96 6458/96, Abu Krinat v. Minister of the Interior [7]. There are formal qualification considerations – such as specific education – but even if a certain candidate fulfills such educational prerequisites, even then the appointing body may take additional, pertinent considerations into account, both for and against: the Eisenberg case [5] at 256-257; HCJ 727/88 Awad v. Minister of Religious Affairs [8] 491.

Holders of authority to appoint or choose are obligated to act with integrity and fairly, without taking irrelevant considerations into account, reasonably, equally and without discrimination. If they fail to do as is required of them, an inappropriate person may be appointed or chosen. If a proper person is not chosen, public service will suffer. However, the reason that such duties that are imposed on the holder of the authority to appoint or choose does not solely concern a certain appointment or choice. Our concern is not only about a specific improper appointment, but also the fear that the disease will spread and the culture of appointments in the civil service will be forever lost. Moreover: anyone improperly appointed, will follow the same crooked path that he was taught when he must make appointments or choices. The parents have eaten sour grapes, and children who saw their parents will also eat sour grapes. We all know where this path leads.

29.       A fundamental principle of governance – standing head and shoulders above all other principles – is the principle of equality, and by its other name: the principle of non-discrimination. Equality is “… a fundamental principle of our constitutional regime” (HCJ 98/69 Bergman v. Minister of Finance [9], 698, per Justice Landau). So it is in the public law, and so in every single aspect of our life in society. “The principle of equality, is with us from time immemorial, it is the beginning of all beginnings, and all the rest is merely commentary and clarification” (HCJ 7111/95, 8195 Federation of Local Authorities v. Knesset (the Federation of Local Authorities case [10]), 501); and see, ibid, 499ff. Justice Barak stated similarly in HCJ 953/87, 1/88 Poraz v. Mayor of Tel Aviv Jaffa; Labor Faction of the Tel Aviv – Jaffa Municipality v. Tel Aviv – Jaffa City Council (the Poraz case [11]), 332:

… nothing is more destructive to a society than the feeling of its sons and daughters that double standards are being applied to them. The feeling of inequality is among the harshest of sensations. It harms the forces that unite society. It harms a person’s self-identity.

And see the Federation of Local Authorities case [10]), at 503:

And discrimination, as we know, is the worst of all evils. Discrimination utterly undermines relationships among human beings. A sense of discrimination paralyzes and destroys the fabric of human relationships. We encounter the phenomenon of discrimination daily: in the workplace, at home, standing in line, in the attitude of holders of authority to citizens and residents. So it is in personal discrimination, social discrimination, ethnic discrimination, each and in every type of discrimination. Discrimination destroys families. Ongoing discrimination will destroy a nation and bring a kingdom to its knees. Thus, little wonder that the enlightened members of society in every place and in every generation act to eradicate discrimination. It is an unceasing battle – a daily battle. It may be likened to pushing back the sea, where if you rest for but a moment, you will be swept away and engulfed. Obviously, day-to-day human relationships are primary, and even if we don’t strictly fulfil the commandment of “love your neighbor as yourself”, we will certainly demand, and are demanded, to comply with the injunction that “anything that is hateful to you, do not do to your fellow.

There is no need to further elaborate. If we know this – we know everything; and if we don’t – we know nothing. The principle of equality flows through every fiber of the law, and is an integral part of the genetic code of each and every legal rule. That is the case for every law and that is the case in the law of tenders, in which the principles of equality and non-discrimination are fundamental: HCJ 685/78 Omri Mahmud v. Minister of Education [12], 778; CA 6926/93 Israel Shipyards Ltd. v. Israel Electric Corporation Ltd. [13], 770; the Dekel case [2]; the Crown case [4], 521.

30.       Having said all that, we know now what we knew already in the beginning: when appointing a deputy director of the National Insurance Institute, the Minister must act with integrity, fairness, and without irrelevant considerations. And most important in the present matter: he is obligated to act equally and without discrimination.

31.       The principle of equality is, in theory and in practice, the father, or perhaps we should say, the mother principal. When we incorporate it into any legal subject, the principle of equality adapts to its surroundings, and at the same time, it affects its surroundings. The principle of equality in election laws is not the same as the principle of equality in the law of tenders, and the principle of equality in the laws of tenders for services or goods is not the same as the principle of equality in tenders for a position in the civil service. In practice, the principle of equality constitutes a bundle of principles, of which equality in the abstract is the common denominator. The principle of equality between the sexes, between women and men, holds a place of honor among those secondary principles.

32.       This all began in our legal system with the Declaration of the Establishment of the State, in which the founders assumed the obligation that the State of Israel will “ensure complete equality of social and political rights to all its inhabitants irrespective of religion, race or sex…”. This undertaking in regard to the status of women was concretely expressed in the Women’s Equal Rights Law, 5711-1951, in which sec. 1 states: “A man and a woman shall have equal status with regard to any legal proceeding; any provision of law which discriminates, with regard to any legal proceeding, against women as women, shall be of no effect”. More than instructing us as it does, this section of the law heralds the status of women in law. In the words of Justice Barak in HCJ 1000/92 Bavli v. Great Rabbinical Court [14],  240:

The Women’s Equal Rights Law is a “majestic” law”. It establishes the principle of equality in the State’s legislation. This principle is explicitly mentioned in the Declaration of Independence which determines that the State of Israel will ensure equality among its inhabitants “irrespective of religion, race or sex”. The aforesaid principle is among the basic principles of the Israeli legal system.

33.       This was the beginning, and as we followed our path and the sound of the trumpet grew louder and louder [Exodus 19:19]. One law followed another, and another, and all of them – one by one – were braided into the wick of equality. Below are some of the laws (not necessarily according to the order of their enactment): the Male and Female Workers (Equal Pay) Law, 5756-1996 (replacing the Male and Female Workers (Equal Pay) Law, 5724-1964). Section 1 of the law determines its purpose, the purpose of equality, and reads:

This law is intended to promote equality and prevent discrimination between the sexes in all that concerns wages or any other compensation in relation to work.

It is immediately followed by sec. 2 of the law:

                        The right to equal wages

2. Female and male workers employed by the same employer in the same workplace, are entitled to equal wages for the same work…

Similarly, the Equality of Opportunities in Labour Law, 5748-1988, states:

Prohibition of Discrimination

2.(a)     An employer shall not discriminate between his employees or between applications for employment on the basis of their sex…with respect to any of the following:

                                    (1) acceptance for employment;

                                    (2) conditions of employment;

                                    (3) promotion;

                                    (4) training or professional studies;

                                    (5) dismissal or compensation for dismissal;

(6) benefits and payments given to an employee in relation to retirement.   

(b)       For the purposes of subsection (a), the setting of irrelevant conditions shall be seen as discrimination.

(c)        …

And see and compare: HCJ 6051/95, 6086/95 Rekanat v. National Labor Court et al; El Al Israel Airlines Ltd. v. National Labor Court [15]; LabA 56/129-3 Plotkin – Eisenberg Brothers Ltd. (the Plotkin case [28]); LabA. 51/8-3 State of Israel v. Gestetner Israel Ltd. [29].

The Names Law, 5716-1956, originally saw a wife as following her husband with respect to her surname. Later, the law was amended (in the Names (Amendment No. 3) Law, 5756-1996), and since that amendment, a woman hold holds the same right as a man. See: Orit Kamir, What's in a Woman's Name [34], and see: HCJ 693/91 Efrat v. Director of the Population Registry [16].

Lastly, we will mention the Authority for the Advancement of the Status of Women Law, 5758-1998, and its purpose as stated in sec. 1:

                        Purposes of the Law

                        1.         The purposes of this law are to advance equality between the sexes in Israel, to achieve coordination among the bodies that treat of the status of women in Israel, to promote education, legislation and enforcement in these areas, to promote activity for the prevention of violence against women, to provide the government with the tools and information needed to achieve these purposes, and to establish a central authority that will act to implement these principles.

34.       Needless to say, the principle of equality that we are discussing is in essence “substantive” equality, and substantive equality simply means justice and fairness.

A close examination will reveal – unsurprisingly – that “substantive equality” is nothing other than one of the derivatives of justice and fairness. Justice and fairness have many aspects, one of those aspects is equality. The principle of equality can be formulated in many ways that are not identical to one another: equal prospects, equal results, equal starting point, equal resource allocation, equal needs, etc. However, “substantive equality” in each of the aforesaid is synonymous – both in theory and in practice – with justice and fairness as viewed by the members of a specific society in a specific period. In other words: equality that leads to justice, equality whose path is the path of fairness (the Federation of Local Authorities case [10], 502).

We should further remember that the principle of equality looks to the result: as pure as a person’s intention may be, if the result of his actions is discriminatory, his actions will be annulled, or as Justice Bach stated in HCJ 104/87 Nevo v. National Labor Court [17], 759:

I am prepared to assume that the Petitioner’s employers did not intend to discriminate against her and the other women employees when they signed the work constitution. However, the Respondent’s intention is inconclusive with regard to the issue that we are required to decide, since the test for examining the existence or non-existence of discrimination is objective and not subjective. It is not the motive for creating a difference between men and women that decides the matter, and in order to determine that discrimination exists, the final result as reflected in the social reality must be examined.

And so stated Justice Barak in the Poraz case [11] (at pp. 333-334):

…the city council did not seek to infringe the principle of equality because it believed that it is wrongful. The opposite is true. Many city council members repeatedly stated that they accept the principle of equality, however they were not prepared to realize it. Thus, they violated it. The question is not only about the motive of those who decide; the question is also about the result of the decision. A decision is wrongful not only when the motive is to infringe equality, but also when the motive is different but equality is prejudiced in practice.

See further: Frances Raday, About Equality [35]; Carmel Shalev, On Equality, Difference  and Sex Discrimination [36].

35.       Over the years, the word of the legislature in regard to the equality of women went hand-in-hand with the case law that interpreted the law, filled the cracks, and that stood on its own two feet by virtue of the basic principle of equality. Thus, for example, Deputy President Elon ruled in HCJ 153/87 Shakdiel v. Minister of Religious Affairs (the Shakdiel case [18],  240, on the issue of non-selection of a woman as a member of the religious council:

…the exclusion of a female candidate from appointment to a religious council, because she is a woman, clearly contradicts a fundamental principle of Israeli law which prohibits discrimination on grounds of sex. This fundamental principle was laid down in the Declaration of Independence, and is among those fundamental principles that have been given expression in legislation, and is not merely an “unwritten” right that derives from the judicial legislation of this court.

            And in like manner, Justice Barak stated (ibid., 274):

Between two possible interpretations, we must choose that which guarantees equality in the optimal manner, and reject the interpretation that contradicts equality. It follows that we must interpret the Religious Services Law in a manner that guarantees equality of the sexes. Indeed, it is a fundamental principle of our constitutional regime that equality between men and women be ensured, and that a man should not be discriminated against because he is man, nor a woman because she is a woman.

            That was also the case in the Poraz case [11] when a local authority refrained from choosing a woman for the assembly that selects the city rabbi, merely because she was a woman, regarding which Justice Barak said (at p. 322):

The set of considerations that the city council may take into account is the set of considerations that falls within the “four cubits” of the Religious Services Law and the regulations. This set of considerations is determined through the interpretation of the Religious Services Law and the regulations. Such interpretation should take into account the language of the law and the regulations on one hand, and the purpose of the law and the regulations on the other … It should further be assumed that such purpose includes – in the absence of contradictory evidence –  purposes designated to fulfill values and principles of our legal system. The interpretation of the language of the law and the regulations against the background of their (particular and general) purpose, leads, in my opinion, to the conclusion that a consideration that denies a woman, as a woman, the ability to be included in the selecting assembly due to the practical concerns that I pointed out, is an irrelevant consideration, inasmuch as it contradicts the purpose underlying the law and the regulations, which is the purpose of realizing the principle of equality.

            Similar statements were made by the Court, per Justice Bach, with respect to the obligation of women to retire at a younger age than men, and in his own words (the Nevo case [17], 761):

When the court encounters a distinction between groups, it must carefully examine whether such distinction is not based on stereotypical perceptions that derive merely from prejudice.

Establishing the discriminatory distinction between men and women in regard to retirement age reinforces the perception that women cannot be equal in the job market and this, in effect, infringes the equality of opportunities for women.

            If all of the aforesaid is not enough – and it appears that it is – below is another contribution from CFH 1558/94 Nafisi v. Nafisi [19], 626:

The point of departure of my journey is to be found in the principle of women’s equality, a principle that has been accepted and taken root in Israeli law – in statute and in case law ... Any attempt to challenge this principle of women’s equality would be the equivalent of heresy in our society. The community property presumption between spouses – a presumption created by the courts – is like a branch that sprouted from the tree of equality, and it is from equality that it draws its strength. This is also true of the provisions of the Law and its resource balancing agreement, which were also derived from the principle of equality. In the Bavli case - as we are all aware – the Court gave strong support to the community property rule between spouses as an outgrowth of the principle of equality, whether as a derivation of the Women’s Equal Rights Law, or whether as an independent rule in its own right...

Moreover, the principle of equality between men and women and between spouses has assumed the status of an overarching principle in Israeli law – or, if you prefer, a fundamental principle – and within its prescribed boundaries all other normal provisions and rules will kneel and bow.

            Moreover, discrimination on the grounds of gender was also recognized, as articulated by Justice Dorner, as infringing the right to dignity under Basic Law: Human Dignity and Liberty:

The degradation of a human being violates his dignity. There is no reasonable way of construing the right to dignity, as stated in the Basic Law, such that the degradation of a human being will not be considered a violation of that right.

Indeed, not every violation of equality amounts to degradation, and therefore not every violation of equality violates the right to dignity. Thus, for example, it was held that discrimination against small political parties as opposed to large parties, or against new parties as opposed to old parties, violates the principle of equality … Notwithstanding, such infringements of the principle of equality, which have even led to the disqualification of Knesset laws, did not express degradation, and so they also did not involve a violation of human dignity.

This is not the case with certain types of discrimination against groups, including sex discrimination, and also racial discrimination. Such discrimination is based on attributing an inferior status to the victim of discrimination, a status that is a consequence of his supposedly inferior nature. This, of course, is inherently degrading to the victim of discrimination (HCJ 4541/94 Alice Miller v. Minister of Defence [20], 132).

36.       We reviewed the provisions of several laws, and presented case law that was issued by the courts: case law that interpreted laws, case law that found a place between gaps in the laws, and case law that stands on its own two feet. The common denominator of all such provisions of law and case law was – and is – the pressing social need to recognize the equal status of women and to act for the reinforcement of equality. The laws are “progressive” laws, as is the case law.

37.       From a bird’s eye view, the laws and case law may appear somewhat strange, and may to present nothing but a tautology. I assume that the day will come when children will chuckle at the statutes and case law in which adults now take pride.

For example, women are entitled to equal wages “for the same work” as provided in sec. 2 of the Male and Female Workers (Equal Pay) Law (above, para. 33). Is the law not stating the obvious? Is packing 500 boxes a day different depending on whether it is performed by a man or a woman? Was the legislature’s intention not clear and self-evident even before it was articulated? Would we not have derived what the legislature says from the principle of equality itself? The same applies to the provisions of the Equality of Opportunities in Labour Law. Does the law not say what we have long-known – that women must not be discriminated against merely because they are women? This goes for these two laws and for all of the other laws. All of these laws – these and others as well – were only intended to eliminate unlawful acts of discrimination that put down roots in our society. The legislature’s instructions were only intended  to declare to the world which norms do – and should – prevail here. The explicit words of the law were intended to declare the need to uproot wrongful conduct to which we have become accustomed, and to place women where they should have been from the outset. Indeed, slowly but surely, the legislature has created new norms – norms that were perhaps not self-evident – but essentially the laws were intended to declare norms, and thereby establish them in the life of the law and of society. And incidentally to establishing the norms, the legislature – rightfully – deemed fit to set sanctions for their violation, all as provided in each and every law.

Laws that we presented and case law that we reviewed appear to us as points of light. The light is the light of equality, equality between women and men, for all intents and purposes. If we step from one point of light to the next, the doctrine of equality will reveal itself in all its glory.

From equality to representation

38.       Reuven and Shimon are competing in a tender for a position in the civil service. Levi, chairman of the tender committee, is a close friend of Reuven. Levi would like to help Reuven, and tips the tender in Reuven’s favor. Shimon was discriminated against in the tender. The tender was not performed on terms of equality and should be annulled. This act of discrimination is a one-time act, although it may repeat itself – and indeed does so – often, and under a variety of circumstances. This is particular discrimination. It would also be particular discrimination if we were to change the details and assume that the competitors are Reuven and Leah. If Levi tips the tender in favor of Reuven merely because he is Reuven’s friend, this too would be particular discrimination.

The discrimination that we are now discussing is different. The discrimination of a woman – as a woman – is generic discrimination. Thus, for example, in the above example, if Levi were to prefer Reuven because he is a man – or decide against Leah because she is a woman – this would be generic rather than particular discrimination. Another example of generic discrimination is discrimination against someone because of his skin color or race. Generic discrimination, as has already been said, is discrimination that critically injures a person’s dignity. A person does not control his sex (female or male), his skin color (black, yellow or white), or the wholeness of his body (disabled or not). In his lifetime, a person does all that he can to acquire wisdom and knowledge, to be a good, generous person, affable and honest, and yet he is rejected in favor of others merely for such characteristics over which he has no control – a genetic or other characteristic.

At this point it would be proper to examine the words of Justice Brennan in Frontiero v. Richardson (1973) [31], at pp. 685-87:

It is true, of course, that the position of women in America has improved markedly in recent decades. Nevertheless, it can hardly be doubted that, in part because of the high visibility of the sex characteristic, women still face pervasive, although at times more subtle, discrimination in our educational institutions, in the job market and, perhaps most conspicuously, in the political arena. . .

Moreover, since sex, like race and national origin, is an immutable characteristic determined solely by the accident of birth, the imposition of special disabilities upon the members of a particular sex because of their sex would seem to violate “the basic concept of our system that legal burdens should bear some relationship to individual responsibility”.... And what differentiates sex from such non-suspect statuses as intelligence or physical disability, and aligns it with the recognized suspect criteria, is that the sex characteristic frequently bears no relation to ability to perform or contribute to society. As a result, statutory distinctions between the sexes often have the effect of invidiously relegating the entire class of females to inferior legal status without regard to the actual capabilities of its individual members. (citations omitted) (footnotes omitted).

39.       Discrimination against women has plagued society from time immemorial, for hundreds and thousands of years. Such ongoing discrimination has created certain lifestyles and thought patterns that have put down deep roots, so much so that it sometimes seems – by way of hyperbole – that they created a kind of mutation in our genetic system. In any event, we all know that it is impossible to uproot these patterns overnight. Moreover, ongoing discrimination over the course of so many years has created layers of discrimination – one on top of another – and thus we have cumulative discrimination – discrimination in the attire of a quasi-status. For example, clearly a woman cannot serve in an Air Force aircrew (the Alice Miller case [20]); clearly a woman is unsuited to serve as a member of a religious council (the Shakdiel case [18]); clearly a woman is unsuited to be included in the assembly that selects a city rabbi (the Poraz case [11]), clearly a woman should retire at age 60, while a man can retire at 65 (the Nevo case [17]); clearly a woman is not suited “to work after 4 P.M.” (the Plotkin case [28]); clearly a female flight attendant’s track to promotion does not lead – like that of a male flight attendant – to the rank of purser but only less (LabA 33/3-25 Flight Attendant Crew Committee v. Edna Hazin [30]); clearly a woman’s right to vote in meetings of an agricultural cooperative society is inferior to that of her husband (CA 84/64 Beit Hananya Ltd. v. Friedman [21]); clearly a woman cannot be the “head of household” in an agricultural cooperative society, and receive the associated “right to work” that is “reserved for men only” (CA 89/85 Beit Herut – Workers’ Cooperative for Cooperative Agricultural Settlement Ltd. v. Glassman [22]); and many more.

40.       Reformers have taken a number of routes to uproot such wrongful thinking patterns that afflict us. One of the routes was through imposing a duty to give representation to women in various entities. Generic discrimination – such as discrimination against women – inherently raises the representation issue. In generic discrimination – as distinct from particular discrimination – it is as if the person who is being discriminated against “represents” the discrimination of an entire class. The dark-skinned is discriminated against merely because of his dark skin; the woman is discriminated against merely because she is a woman. This means that the black man and the woman each “represents” discrimination against their class: he – all blacks; she – all women. To rectify this situation, the reformers in our case chose the route of imposing a duty to arrange for representation of women in workplaces, on boards of directors, etc. The same issue (but not it alone) gave rise to the institution of affirmative action, which also derives from the deficient “representation” of women.

41.       The provisions of secs. 15A of the Appointments Law and 18A of the Government Companies Law may serve as fitting examples of imposing norms that mandate ensuring proper representation of women in the civil service and on the boards of directors of Government Companies, and of adopting affirmative action to achieve the goal of proper representation (see above, paras, 22 and 23). Section 15A of the Appointments Law was originally intended to apply to the civil service, but as we have seen, the legislature extended the scope of its application to the majority of National Insurance Institute employees, as well. As for sec. 18A of the Government Companies Law, the legislature saw fit to extend its scope as well, and applied it to statutory corporations (see above, paras. 22-24). To complete the picture, we will add that the Government decided, pursuant to its authority under sec. 3 of the State Service (Appointments) Law, 5719-1959, to apply sec. 15A(a) of the Appointments Law to all of the local authorities (in a decision dated August 14, 1997, published in the Official Gazette on September 2, 1997, No. 4563 for the year 5757, on page 5392). The aforesaid are not the only relevant examples.

We find a somewhat esoteric example in the Cinematograph Films Ordinance, 1927, under which the Censorship Board reserved at least one spot for a woman (in accordance with sec. 3 of the Ordinance, a censorship board will be established consisting of the chairman and several additional members “of whom one at least shall be a woman”). However, more important in our case are the laws that were enacted in recent years. Thus, for example, sec. 4 of the Senior Citizens Law, 5750-1990, provides for the establishment of a public council for senior-citizen issues, and the law prescribes (in sec. 4(b)) that “at least one third of the council members shall be women”. Section 48 of the National Health Insurance Law, 5754-1994, requires the establishment of a national health insurance council. Section 49 establishes the number of council members and the bodies to be represented therein, and sec. 49(b) further determines:

Composition of the Health Council   

49.       (a)        ……………….

(b)       At least one quarter of the panel of members appointed from among the government employees shall represent both sexes. The panel of representatives in a body represented by three or more, shall include representation of two sexes [sic].

 (The words “two sexes” at the end of sec. 49(b) seems to have been a lapsus calami, and the intention most probably was, “both sexes”).

Section 1 of the National Battle against Road Accidents Law, 5757-1997, establishes a “steering committee” for the National Road Safety Authority. Section 11(a) of the law determines that the steering committee shall be composed of 7 members, and sec. 11(c) further determines that “the steering committee shall give proper expression to the representation of members of both sexes, insofar as possible in the circumstances of the matter”.

Moreover, sec. 13 of the same law establishes an advisory committee for the National Road Safety Authority. The advisory committee is composed of 21 members, and as prescribed by sec.13(b): “At least eleven of the committee members shall be women.”.

The National Authority for Certification of Laboratories Law, 5757-1997, establishes a seven-member council, and in accordance with sec. 8(b)(3), the representatives of the Minister of Finance and Minister of Science on the council “shall be members of the sex that is not properly represented at such time in the entire council.” The law also establishes a thirty-member “advisory committee” and, in accordance with sec.16(c) thereof, “at least one half of all of the advisory committee’s members shall be women”.

Section 9 of the Authority for the Advancement of the Status of Women Law, 5758-1998, establishes an authority for the advancement of the status of women, and mandates the appointment of a 35-member “advisory committee”. Section 9(a) of the law lists various entities that will be represented in the committee, and sec. 9(e) prescribes that “in the composition of the members that will be appointed under subsecs. (b)(2) and (3) there will be representation of each of the sexes of at least forty percent of the members” (subsecs. b(2) and (3) speak of 18 representatives of the 35 members). It should be added that in accordance with sec. 3 of the law “the duties of the authority shall be performed by the director [the term is in the female gender – ed.] of the authority”, and we cannot assume that the use of the female gender also encompasses the male gender.

Finally, on June 30, 1998, Amendment (no. 11) to the Companies Ordinance (Representation of both Sexes on a Board of Directors of a Public Company) Law, 5758-1998, was published. Following the amendment sec. 96B(a) of the Companies Ordinance [New Version], now states (the amendment is emphasized):

Appointment and qualifications        

96B.    (a)        At least two public directors shall serve on the board of directors of a company, elected by the company and certified by the committee that they met the qualifications set in this title. If one of the positions of a public director is vacated in a company in which all of the members of the board of directors are of one sex, at least one of the directors of the public shall be of the other sex.

                                    (b)       …

42.       In conclusion, we reviewed a number of women’s “representation provisions” in the new Israeli legislation. Such representation provisions do not speak only of themselves; they speak of a new, hitherto unknown zeitgeist in the Israeli legal system. There is a fresh breeze blowing through the laws of Israel. Elsewhere in our opinion (see above, para. 37), we compared provisions of the law that pertain to equality for women and the prohibition to discriminate against them to points of light. We connected all of the points of light and behold, an Israeli legal doctrine revealed itself – a doctrine whose power extends beyond the particular provisions of law. Connecting the points of light has created a kind of critical mass, and thus a doctrine of far-reaching consequences was created. Just as in the case of that doctrine, so it is in the case of the doctrine now revealed in the present matter: the provisions of the law that pertain to the proper representation of women are also like points of light. Connect the points of light and you will see that a kind of critical mass is created that also gives rise to a doctrine or, at the very least, a quasi-doctrine. If you prefer, a doctrine in formation has revealed itself to us.

Let us consider it. The representation provisions that we reviewed in the legislation vary; the representation provisions in one law are not identical to the representation provisions in another law. However, absolutely all of the representation provisions, despite their differences,  individually constitute a crystallization of the same substance and expresses the same basic principle. That principle is: granting proper representation to women and men in public entities as a need required by the principle of equality. Each one of those provisions reflects and reveals, in its defined and delineated areas, the same basic principle of equality.

43.       Against the background of all of the aforesaid, the question that now presents itself is: what is the doctrine or quasi-doctrine that we can derive from the law and case law? To what extent is a duty imposed on the authorities to bring about proper “representation” of women? We will now turn to this and other related questions.

The representation of women as an element of the discretion of a competent authority

44.       The following is how man was created on the sixth day of the Creation (Genesis 1:27):

So God created man in His own image; in the image of God He created him; male and female He created them.

This is what the book of the generations of Adam tells us (Genesis 5:1-2):

This is the book of the generations of Adam, in the day that God created man, in the likeness of God made He him; male and female created He them, and blessed them, and called their name Adam, in the day when they were created.

Both the male and the female were created – created together – in the image of God. The woman and the man are one: she too is Adam, he too is Adam, they are both Adam.

That is how it was and how it should have been; that is how it is and how it should be; that is how it will be and how it should be. Let us remember and heed.

45.       The question whether a situation of inequality and discrimination has been created will be examined – as we have seen – according to the results and not according to the intentions. Good intentions are insufficient to bring about a nice day, and insufficient to be of any help if the result obtained is one of discrimination. Indeed, the phenomenon that is revealed to us is one in which women are absent from public entities to an extent and in circumstances that the laws of statistics would be hard pressed to explain without introducing the element of discrimination into the equation. In order to avoid misinterpretation we will quickly add: we did not – and will not – say that discrimination is the sole factor that led to the situation in which there is only one woman (on leave, and in circumstances in which it would have been reasonable to assume that she would not return to work) out of nine deputy directors in the National Insurance Institute. However, it is hard to be disabused of the impression that discrimination played a role in this phenomenon – directly or indirectly – and perhaps even a considerable role. We do not mean special discrimination – certainly not conscious discrimination – within the National Insurance Institute. As we said above, we are concerned with generations-long discrimination, of strata of discrimination that accumulated on top of one another over many years.

46.       We have extensively discussed the principle of equality and its application in the relationship between men and women. We discussed various provisions of law that mandate equal treatment of women. We further discussed provisions of law that mandate giving representation to women in various public entities. Legislation and case law together have shown us the way, and the way is that of the doctrine that everything that can be done must be done to arrange for “appropriate representation” of women in public entities. In other words, when making a selection or an appointment in public entities, the competent authority must consider the proper representation of women, or perhaps we should say, the representation of members of both sexes.

We have learned time and again that an authority’s discretion is fed by two tributaries. The source of one tributary is the law under discussion:  the purpose of the law, the principles of the law, and the particular provisions of the law. The source of the other tributary is the legal system as a whole: the purpose of the legal system, its principles and values, and the doctrines that sustain it (see, for example, the Poraz case [11],  328ff). The National Insurance Law speaks of establishing a management for the National Insurance Institute, and outlines the boundaries of its powers. Provisions that pertain to the management are framework provisions, skeletal provisions, “dry” provisions. However– like the other provisions of the National Insurance Law, and like all the laws of the State – they are immersed up to their necks in the tributary of principles, values and doctrines. These principles, values and doctrines of the legal system – or perhaps we should say: of Israeli society as viewed through the lens of the law – constitute an integral part of the genetic code of all the provisions of the law and all the case law of Israeli law. The rules of the law do not live without them. It can even be said, as we have said elsewhere, that such “credo” principles of the legal system precede the particular rules of the law (see: CFH. 7325/95 Yediot Aharonot Ltd. v. Kraus [23] p. 71ff ; HCJ 5503/94 Segal v. Knesset Speaker [24] p. 562; CA 3798/94 A. v. B. [25] 165ff).

Having learned all the above, we shall add that a sincere, honest effort to position women at the same starting point as men, and vigorous actions to give proper representation to women in the civil service are duties intertwined with the general doctrine that requires proper expression for the representation of both sexes in the civil service. The meaning of this is that in each appointment or selection in the civil service, the competent authority must do its best to realize the requirements of the doctrine.

47.       What is “proper representation”? A review of the statutes that speak of proper representation shows us that they are not uniform. Some of the provisions determine rigid models of proper representation, and some determine flexible ones; some determine that among the members of a certain entity there will be a certain percentage of women and some do not determine a certain percentage. Among those that do determine a specific percentage, the provisions of the laws are not identical. My colleague Justice Mazza addressed this issue of “proper representation”  in the Women’s Network case [1], saying, inter alia, as follows (pp. 527-528):

I accept that the term “proper representation” — with regard to the representation of both sexes in the composition of a board of directors — must be construed in accordance with the special circumstances of the case. This means that we are not speaking of fixing equal quotas, or any quotas at all, for the representation of either men or women; but we are speaking of giving proportional representation to each of the sexes, and the proper degree thereof should be determined in accordance with the character, the purposes and the special needs of the Government or statutory corporation under discussion, and according to the distribution of the candidates of both sexes found to be suitable for the specific office that is sought. It is possible that the conclusion that derives from this premise is that in the absence of proven circumstances that justify giving greater weight to members of one sex, ‘proper expression’ should be interpreted to require equal representation for men and women. However, in general and specifically, we must take care not to instill an approach that holds that giving any representation to women may be deemed giving women proper representation [emphasis original – M.C.].

In the present matter, there is no need to delve any deeper in order for us to reach the conclusion that women are not fairly represented in the National Insurance Institute’s Management. Prior to Marom’s appointment, there were eight active deputy directors in the management, including one female deputy director on leave (in circumstances in which it could have been assumed that she would not return to work). Moreover, as we have seen, the Minister was explicitly told that the representation of women in the National Insurance Institute’s Management was inappropriate, and he is presumed to have known so himself. Even if we were to say that representation of less than one half is “proper representation” – and we do not say so – in our case we are indisputably far, very far, from proper representation. Let us say it explicitly: women have no representation in the National Insurance Institute’s Management.

48.       What conclusion does this require? Is it that the Minister has a case-law duty to appoint a woman for the office of IT Deputy? We believe that this is not necessarily the case. Even if we were to say that the Minister has a duty to do whatever can be done – under the circumstances of each and every case – to give fair representation to women in the National Insurance Institute’s Management, it would be improper to add that the aforesaid duty must translate itself – in our case – into an actual appointment of a woman for the office of IT Deputy. Had the legislature constrained us by a legal provision requiring the appointment of a woman, then needless to say, we would heed the order. However, we are now wandering in the field of principles and doctrines. Trees of discretion grow in this field, and we must strictly examine whether everything that was required was done or omitted in this area.

After all the above, let us say that in the circumstances that were revealed to us, we would have expected to hear some explanation from the Minister for the failure to grant representation to women; viz., in the present matter, a justification for not appointing a woman for the office of IT Deputy. We did not hear an explanation or a justification, and we are unaware of any proper explanation or justification.

49.       What duty does the case law impose upon the Minister? All would concede that it is, first and foremost, to enquire whether there is a woman in the Israeli workforce who is suitable to fill the office of IT Deputy. What did the Minister do in this regard? We have the answer in his affidavits. Thus, for example, he says in para. 6 of his affidavit of July 1, 1998:

Of the various candidates who were proposed for the position after the National Insurance Institute Director searched for candidates, inter alia, in manpower firms and among the professionals, and the Director  of the Ministry of Labor and Social Welfare, who has a strong background in this area was also asked to recommend candidates, I was not offered a suitable female candidate for the position who had qualifications similar to those of Respondent no. 2.

And in para. A of the reply affidavit dated July 20, 1998:

The searches that were performed by the National Insurance Institute Director, which were intended to find the person most suited to the position (not necessarily a male candidate) – failed to identify a suitable female candidate.

Our request to produce documents on the searches that were performed was answered as follows:

There are no documents that attest to a search for a suitable female candidate. If a suitable female candidate had been found, her candidacy would have been considered in a pertinent manner and perhaps even with a certain advantage (para. D of the reply affidavit dated July 20, 1998).

What do we learn from all this? That truth be told, there was no search for a female candidate for the office of deputy director as required. In any event, no proper search was performed. Indeed, the statement that the “search that was performed by the National Insurance Institute Director … failed to identify a suitable female candidate” is too  general and vague to fulfill the requirements of an efficient, serious search for a suitable female candidate. The Minister did, indeed, consider the candidacy of two women – including Ms. Ranel who proposed her own candidacy – but did not find them suitable for the position. However, that does not suffice.

Rabbi Isaac said: If a man says to you: I have labored and not found – do not believe him. If he says, I have not labored but have found – do not believe him. If he says, I have labored and found – you may believe him (TB Megilla, 6b).

50.       In the Women’s Network case [1], our colleague Justice Mazza articulated the scope of the duty in a search for a suitable candidate, and we can do no better than to quote him in his own words (ibid, 529):

…the burden of proof that in the circumstances of a specific case it was not possible to appoint a woman rests with the appointing minister. This burden is not a light one. In order to discharge it, the appointing minister must show that he examined the possibility of appointing a suitable female candidate, but discovered that, in the circumstances of the case, this was impossible. Even his duty to make such an examination is not simple. In order to discharge it, the minister must adopt reasonable measures to locate a suitable female candidate. The scope of these measures depends on the type of appointment in question. When he must appoint a director from among the employees of his ministry, the examination must encompass all the female employees in his ministry who prima facie have the basic qualifications required. If he must choose the candidate from among the general public, his examination must encompass those sectors of the population where a suitable female candidate is likely to be found. This does not mean that the minister must seek, at any cost, to locate an unknown female candidate who has the necessary qualifications. But he also will not have done his duty by making a “formal” search for any female candidate. In order to do his duty properly, he must adopt reasonable measures designed to lead to the discovery and appointment of a suitable female candidate. For this purpose, it is not impossible that the Minister will seek assistance not only from his assistants and advisors, but also from external public bodies (such as business guilds, professional associations and societies, trades unions, the universities, women’s organizations, etc.) and of professional authorities (such as the Adviser on the Status of Women in the Prime Minister’s Office), who have in their possession the relevant information which he needs and who may recommend candidates with the qualifications required for the various appointments.

As we can see, in attempting to achieve proper representation of women in public entities, a real duty is imposed on the competent authority to search for suitable female candidates. In our case, the Minister of Labor was unable to lift the burden imposed on him to search, and further initiate a search in order to achieve proper representation of women in the National Insurance Institute’s Management.

51.       In the present case, we heard the following from the Petitioner with respect to women in the computer industry:

Since the beginning of the 1990s, women have made up 50% of undergraduate and graduate students in computer science. Since the 1970s, there has been a constant increase in the rate of women in system programming and analysis, from 20% in 1972 to 37% in 1992. Despite the discrimination from which women in the field of programming and computers suffer, including through discriminatory bars to managerial positions, in 1997, women managers were found in 45% of the companies and plants in the software industries.

The Petitioner based these statements on A. Rosen, Male Culture and the Status of Women in Technology [37]..

The Petitioner further submitted two affidavits containing many names of potential women candidates who could have easily been located – women candidates from the civil service, public service, and even the private sector – all women who hold senior positions in the computer industry. In principle, all of them could have successfully filled the office, if only their candidacy had been properly considered. And if the Minister sought to find a candidate specifically suited to manpower (“HR management”) issues, he no doubt could have found many more women candidates.

            He turned this way and that way, and he saw that there was no man… (Exodus 2:12).

That was Moses’ way of finding out whether or not there was anyone around. He looked to the right, he looked to the left, and then:

                        He struck the Egyptian and hid him in the sand (loc. cit.).

A person who turns this way and that way, does not do enough. As we can see, this is what happened on the following day:

            When he went out the next day, he saw two Hebrews fighting; and he said to the one who was in the wrong, “Why do you strike your fellow Hebrew?” He answered, “Who made you a ruler and judge over us? Do you mean to kill me as you killed the Egyptian?” Then Moses was afraid and thought, “Surely the thing is known.” (ibid,  13-14).

We, too, were not convinced that the Minister turned this way and that to find a woman. Will the Minister indeed say to us:

Which my soul sought yet, but I did not find; one man out of a thousand I found, but a woman among all these I did not find. (Ecclesiastes, 7:28)?

Indeed, each generation and its scholars, each generation and its female leaders. These days we will not accept such a statement as appropriate . If that is the Minister’s answer – and that was, indeed, his answer – we will say: we find the answer unacceptable. We were not convinced that a real search was carried out, a true search, to find a woman for the contemplated office. Had a tender been published for filling the office, there probably would have been women – not only one – who would have proposed their candidacy. Since a tender was not published, the Minister is required to do the utmost to reach such women, to examine their qualifications, and to compare their qualifications among themselves and between them and Marom.

52.       To complete and clarify we will add that the burden of investigation and consideration of potential women candidates in the Women’s Network case [1] was different, in terms of its (immediate) legal source, from the burden imposed on the Minister of Labor in our case. In the Women’s Network case [1], the issue addressed was sec. 18A of the Government Companies Law and the proper interpretation of that provision (see above, paras. 23, 47 and 50). The law itself imposed a substantive duty of “proper representation”, and from such duty the Court derived a secondary duty to act in order to find a suitable woman candidate. The case before us is different in that the substantive duty imposed on the Minister is a case-law duty to consider the issue of proper representation of women in public entities, and to do what can be done to give them proper representation. Such a case-law duty inherently states a secondary duty that is imposed on the Minister, which is a positive duty to gather information (“to investigate and search, to gather information from administrative authorities or other entities and perhaps even seek the opinions of experts” (the Euronet case [3], 424, per Justice Zamir). To sort out the relevant information, ascertain its credibility, and give it suitable weight (the Euronet case [3], 423-426). Thus, the duty we are discussing is an autonomous being. While, it relies – in one way or another – on various provisions of law and on the basic principles of the legal system, ultimately it stands on its own two feet, as a duty from the case law: it is born of the case law and it lives within the case law.

53.       There are tenders and there are “quasi-tenders”, and the duties imposed on the publisher of a quasi-tender are very similar to the duties imposed on the publisher of a tender (see and compare: the Israel Shipyards case [13] 767ff). The duties that apply to the Minister in the search for women candidates to fill the position of IT Deputy resemble the duties that apply to the publisher of a quasi-tender. It is not enough to sit back and do nothing. The duty is a positive one: to climb the tree, squeeze between the branches, put out a hand and search for the fruit; not merely to stay on the ground and wait for the ripe fruit to fall into your lap. The Minister must guide himself like Moses guided the spies when he sent them to tour the land of Canaan:

            And Moses sent them to spy out the land of Canaan, and said unto them: Get you up here into the South, and go up into the mountains; and see the land, what it is; and the people that dwelleth therein, whether they are strong or weak, whether they are few or many; and what the land is that they dwell in, whether it is good or bad; and what cities they are that they dwell in, whether in camps, or in strongholds; and what the land is, whether it is fat or lean, whether there is wood therein, or not. And be ye of good courage, and bring of the fruit of the land and now the time was the time of the first-ripe grapes. (Numbers 13:17-20).

If this is carried out, the woman will most certainly be found.

54.       We will add the obvious which is that the manner of assessment of the female – and male – candidates must be thorough, rational and pertinent. General assessments of candidates are insufficient. The  assessments must be based on methodical, pre-determined tests, and on a pertinent weighting of each and every candidate. That is how we will be able to avoid the preconceptions that have clung to us, to all of us; that is how we will be able to do justice for each female and male candidate.

55.       In conclusion: once the office of IT Deputy in the National Insurance Institute was vacated, and once it was learned that there were only men in the National Insurance Institute’s Management,  a case-law duty was imposed on the Minister to search – to diligently search – for a woman with suitable qualifications to fill that office. We do not find that the Minister fulfilled that duty.

The remedy

56.       When appointing Marom to the office of IT Deputy, the Minister failed to fulfill his duty to seriously consider the principle of proper representation of women. The question is only what conclusion should we draw from this?

If it were now shortly after the appointment, we might have revoked the appointment and returned the matter for consideration by the Minister in the proper, required manner. We will not do so for these two cumulative reasons: First, some four-and-a-half months of the six-month trial period of this appointment have already elapsed. Although Marom himself did not appear before us – and consequently did not argue on his own behalf – we will appoint ourselves his guardians and say that it would be unjust if we were now to ignore those months as if they never existed. Indeed, the “fait accompli” rule is not relevant to Marom, but in examining the competing interests it seems that we will not do justice if we send him home. Second, and pursuant to the first reason: Marom is now in a trial period and no one knows what will transpire at the end of the period. Thus we said to ourselves, let us add the good to the useful and accompany the trial period with an act that ought to have been carried out from the outset and was not performed as required.

57.       Thus, we rule as follows: for the present – and until the expiration of the trial period – Marom will be able to continue in his position as IT Deputy. However, over the following months, the Minister must perform his duty according to the doctrine – the duty to act for proper representation of women: to make efforts and act diligently to find suitable women candidates to fill the position of IT Deputy at the National Insurance Institute; to bring the proper women candidates before the committees, and thereafter decide who will be the IT Deputy. Needless to say, until the Minister’s final decision, Marom will not be granted a permanent appointment to the office of IT Deputy, and the trial period shall continue until the final decision (unless it is decided to terminate it earlier for whatever reason). In this sense, we make the order absolute. Under the circumstances, there will be no order for costs.

 

Justice I. Zamir:

I concur.

 

Justice D. Beinisch:

I concur.

 

Decided in accordance with the opinion of Justice M. Cheshin.

Given this day, 19 Av 5758 (August 11, 1998).

 

 

 

 

 

[1] Ed: should be “the other employees of the Institute”.

Abdu v. Mayor of Akko

Case/docket number: 
HCJ 113/57
Date Decided: 
Thursday, January 30, 1958
Decision Type: 
Original
Topics: 
Abstract: 

The petitioner was-the senior social worker in her particular field and had been in the service of the Akko Municipality since 1949, except for a short interval when she was abroad on a special training course. As a member of a minority group, she was mainly concerned with Arab residents. Owing to the National Insurance Law and substantial administrative changes in providing municipal assistance to needy people, she had been put on part-time work in October 1956. Her final dismissal in March 1957 was effected by the Council approving a prior resolution of the Executive  Committee  abolishing the post of social worker among the minorities. The petitioner sought to impeach (a) the Council's resolution on the ground that die agenda of the meeting at which it was considered did not contain any express notice of the question of her dismissal, contrary to law, but  a mere reference to the proposed approval of the resolution of the Executive Committee, a copy of which had  been attached; (b) the dismissal on  the grounds that it had not been approved, as required, by the District Officer until after commencement of proceedings; (c) the reason for dismissal as being inaccurate and dishonest, since the Mayor had applied to the Ministry of Social Welfare for a suitable replacement. The Mayor's application to the Ministry was admitted by the respondents with the explanation that it had not been pursued owing to budgetary restrictions, although it was intended to appoint a communal, as distinct from a social worker, for which appointment the petitioner could apply. It was also admitted that the Municipality was party to a collective labour agreement under which the rule of "first in-last out" applied. In evidence it was established that the petitioner, in addition to Arabic, spoke French and English and had some knowledge of Hebrew, which would enable her to work with others than members of her own community. Since the proceedings had commenced, a question in the Knesset had elicited a reply which contradicted the submissions of the Municipality.

 

Held: The resolution dismissing the petitioner was invalid.

Voting Justices: 
Primary Author
majority opinion
Non-writer
majority opinion
Author
concurrence
Full text of the opinion: 

9

Gavish v. Knesset

Case/docket number: 
HCJ 9134/12
Date Decided: 
Thursday, April 21, 2016
Decision Type: 
Original
Abstract: 

Section 4 of the Retirement Age Law, 5764-2004 (hereinafter: the Law) provides that "the age at which an employee can be required to retire because of age is 67 for a man and for a woman". The petitioners challenged the validity of section 4 of the Law, and the hearin focused on the question of whether that statutory provision is constitutional.

 

The High Court of Justice (per President Naor, Deputy President Rubinstein and Justices Danziger, Vogelman, Barak-Erez, Hayut and Hendel concurring) dismissed the petition, holding:

 

The Court applies judicial review of the Knesset's primary legislation with restraint and caution. Special care is necessary when that the legislation under review delineates wide-ranging social and economic policy. Retirement age is a complex, polycentric subject, and of the possible solutions, the Israeli legislature adopted a collective model that prefers a age criterion to an individual examination of the individual. In such circumstances, although the Court will not refrain from exercising constitutional review, it will do so with extreme care.

 

As regards the constitutional review of the mandatory retirement arrangement, compulsory retirement because of age infringes the right of equality that derives from the constitutional right to human dignity. Having regard to the nature and extent of the harm, it can be said that such harm amounts to an infringement of human dignity. However, the infringement meets the requirements of the Limitation Clause. According to the conditions of the Limitation Clause,constitutional rights cannot be infringed, except by virtue of a law befitting the values of the State of Israel as a Jewish and democratic state, enacted for a proper purpose, and to an extent no greater than is required. In the instant case, the infringement is in the Law. The parties did not expand on the Law's befitting the values of the State of Israel as a Jewish and democratic state. Therefore, the purpose of the Law and its proportionality were examined.

 

With regard to the purpose of the Law, its general purpose is to prescribe uniform rules with regard to retirement age, including raising it gradually. The determination of uniform rules for retirement is intended to promote several sub-purposes: the protection of employees' interests and the promotion of social security. As opposed to this, it is not improper to considerthe interests of new workers in the labour market, as well. The purpose of managing the workplace and planning manpower is not an improper purpose either. The purposes of the Law demonstrate its aspiration to effect a balance between the rights and interests of the different "players" in the labor market: the employer, the different groups of employees and the economy as a whole. In addition, the Law does not compel an employee to retire upon reaching a certain age, but rather permits him and the employer to consider allowing the employee to retire at a later stage, and even obliges the employer to give consideration to continuing the worker's employment after retirement age, if the employee so requests. As a rule, striving for a fair balance between competing interests of individuals is a proper purpose.

 

As for the proportionality of the infringement, in the framework of the proportionality tests, an examination is made of the relationship between the purpose of the Law and the means chosen by the legislature in order to achieve it. The proportionality of the statute is analyzed by means of three subordinate tests: according to the rational connection test, the means chosen by the legislature must reaize the purpose underlying the statute. In the instant case, a mandatory retirement age arrangement can achieve the Law's purposes. The lesser-infringement test comprises two elements: the first element examines whether there is an alternative that can achieve the proper object of the Law to the same extent as the means adopted by the Law. The second element examines whether the alternative infringes constitutional rights to a lesser extent than the means adopted in the Law. In the instant case, the mandatory retirement arrangement passes the second proportionality test. In the framework of the proportionality stricto sensu test, an examination is made of whether there is a proper relationship between the benefit that will arise from achieving the Law's purposes and the associated infringement of the constitutional rights. The model of compulsory retirement because of age has advantages and disadvantages. As opposed to this, other models are also not free of difficulties. Given this complex background, the legislature's preference of the model of compulsory retirement because of age over other models is based on reasonable considerations that show no cause for the Court's intervention. The legislature's choice of the compulsory retirement because of age model reflects an informed choice among different possibilities. In view of all the advantages and disadvantages, that choice does not depart from the broad margin of proportionality graanted the legislature under the circumstances. In these circumstances, even if some of the customary factors for justifying mandatory retirement and their weight can be questioned, that does not suffice in order to find that the Law is disproportionate. In addition, even were it held that the mandatory retirement age is improper, it would be possible to conceive of different possible ways to rectify it, rather than abolishing it altogether. To this may be added the fact that a collective retirement model  that establishes a uniform, predetermined retirement age has been customary in Israel for many years.  Replacing that model with another might materially affect the employment market, especially if the change were made immediately, pursuant to a judicial decision.

Voting Justices: 
Primary Author
majority opinion
Non-writer
majority opinion
Author
concurrence
Author
concurrence
Author
concurrence
Author
concurrence
Author
concurrence
Full text of the opinion: 

 

HCJ 9134/12

 

 

 

Petitioners:                1. Prof. Moshe Gavish

                                    2. Prof. Mordechai Segev

                                    3. Prof. Asa Kasher 

 

                                                            v.

 

Respondents:                        1. The Knesset

                                    2. Minister of Finance

                                    3. Attorney General

                                    4. Technion – Israel Institute of Technology

 

Applicant to Join as Additional Petitioner or Amicus Curiae: Prof. Ruth Ben-Israel

           

Applicant to Join as Amicus Curiae:  Association of Law in the Service of the Elderly

 

Attorneys for the Petitionrs and the Applicant to join as Additional Petitioner or Amicus Curiae:  Shoshana Gavish, Adv.

Attorney for Respondent 1: Gur Bligh, Adv.

Attorney for Respondent 2-3: Hani Ofek, Adv.

Attorney for Respondent 4: Gilat Vizel-Saban, Adv; Yael Hadani, Adv; Adam Fish, Adv.

Attorney for the Applicant to join as Amicus Curiae:  Carmit Shai, Adv.

 

 

 

The Supreme Court sitting as High Court of Justice

 

Opposition to order nisi.

Position of the Attorney General of February 9, 2105

Response of the Petitioners of March 22, 1025

 

25 Heshvan 5775 (November 18, 2014)

 

Before: President M. Naor, Deputy President E. Rubinstein, Justice E. Hayut, Justice Y. Danziger, Justice N. Hendel, Justice U. Vogelman, Justice D. Barak-Erez

 

President M. Naor:

 

            Section 4 of the Retirement Age Law, 5764-2004 (hereinafter: the Retirement Age Law or the Law), provides that "the age at which an employee can be required to retire because of age is 67 for a man and for a woman". The issue before the Court in this petition is whether that statutory provision is constitutional.

 

Background

 

            The Normative Stuation prior to enactment of the Retirement Age Law

 

1.         The accepted view in Israel, as in many other countries, is that a person should be permitted to retire from work and rest from daily toil in old age. That approach is expressed in the creation of retirement arrangements (HCJ 104/87 Nevo v. National Labour Court, IsrSC 44 (4) 749, 754 (1990) [English: http://versa.cardozo.yu.edu/opinions/nevo-v-national-labour-court] (hereinafter:  the Nevo case)). "Retirement age" is generally defined in the framework of those arrangements. The term "retirement age" can have several possible meanings. One meaning is pension-qualifying age, namely the age at which a person is entitled to retire voluntarily and receive the full pension that he has accumulated during his life (hereinafter: qualifying age). Another meaning is a mandatory retirement age. That is, the age at which an employee can be required to retire because of his age (hereinafter: mandatory retirement age),  which is the focus of this petition.

 

2.         The Retirement Age Law was enacted in 2004. Before its enactment, there was no statute in Israeli law that regulated the issue of retirement generally, or that of mandatory retirement age or qualifying age. At that time, mandatory retirement age was gounded in collective agreements, the by-laws of pension funds, or in the statutory provisions that governed certain groups of workers in the economy, like state employees, judges and career soldiers (sec. 18 of the Civil Service (Retirement) Law [Consolidated Version], 5730-1970 as in the version then in force (hereinafter: the Civil Service (Retirement) Law); the Civil  Service (Retirement) (Continued Employment of an Employee over the Age of 65) Regulations (hereinafter: the Civil Service (Retirement) Regulations); section 13(a)(1) of the Courts Law [Consolidated Version], 5744-1984; section 13 of the Israel Defence Forces (Permanent Service) (Retiremant) Law [Consolidated Version], 5745-1985). The employment of workers not governed by a collective agreement or a specific law came to an end at the customaary retirement age, if that was expressly or impliedly agreed between them and their employer. Similarly, such workers could resign upon reaching the customary retirement age and receive severance pay (sec. 11(e) of the Severance Pay Law, 5723-1963.(For details of the arrangements prevailing prior to the enactment of the Retirement Age Law, see: Dan Shnit, “Mandatory Retirement – A Reassessment,” 32 HaPraklit 507, 514-518 (1980) (hereinafter: Shnit).

 

3.         In order to complete the picture, it should be noted that the majority of collective agreements and legal provisions at that time prescribed that the retirement age was 65 for a man and 60 for a woman. Nevertheless, over the years itcame to be understood that requiring women to retire at an earlier age than men was discriminatory (see: Nevo, p. 770; HCJ 6845/00 Niv v. National Labour Court, IsrSC 56 (6) 663 (2002) (hereinafter: the Niv case)). That led to the enactment of the Male and Female Workers (Equal Retirement Age) Law, 5747-1987 [English: http://www.ilo.org/dyn/natlex/docs/ELECTRONIC/6028/97936/F2079498565/ISR6028.pdf] which provided that if a collective agreement prescribed a retirement age that was lower for a woman than for a man, the woman would be entitled to retire at any age between her retirement age and that prescribed for a man (sec. 2 of the statute, later repealed by the Retirement Age Law). Since then, 65 became the normal retirement age for both men and women. (See: HCJ 6051/95 Recant v. National Labour Court, IsrSC 51 (3) 289 (1997) (hereinafter: the Recant case).

 

Recommendations of the Netanyahu Commission

 

4.         In 1997, the Minister of Labour & Welfare and the Minister of Finance appointed a public commission headed by Justice (Emeritus) Shoshana Netanyahu to examine the issue of retirement age (hereinafter: the Netanyahu Commission). The Commission was tasked with examining the issue of retirement age, including its social and economic aspects, as well aso the question of standardizing the retirement age for men and women. The Commission availed itself of the services of an external consultancy firm, as well as information from western countries, comprising statistical data, professional articles, judgments and opinions. Representatives of various professional groups in Israel and a variety of experts appeared before the Commission. The Commission also used demographic forecasts and simulations that were prepared by experts in regard to the implications of a change in the retirement age for the social security system. In addition, the public at large was invited to express its opinions on the issues on the agenda.

 

5.         The Commission submitted its recommendations in July 2000 (Report of the Public Commission for the Examination of the Retirement Age) (hereinafter: the Netanyahu Commission Report). The Commission's recommendations related to various aspects of the retirement age issue. We shall focus on the Netanyahu Commission's opinion on the matter of mandatory retirement age -- the age at which it is possible, as stated, to require an employee to retire because of age. The Commission studied the possibilities of changing the mandatory retirement age, including the possibility of abolishing it altogether. Due to various factors, including the opposition of certain organizations, the Commission decided not to go so far as other countries had in completely abolishing a mandatory retirement age, and instead, adopted a course of "gradual progression, while studying the implications of the proposed change to retirement age" (ibid., p. 6). Consequently, having regard to the data on the ageing of the population and the need to increase the participation of older people in the workforce, the Commission recommended a gradual increase in the customary retirement age (from 65 to 67). In addition, the Commission believed that the mandatory retirement age should be grounded in primary legislation and should apply to all workers. Commission member Prof. Frances Raday took the minority view that a more significant increase in the mandatory retirement age would be appropriate. However, she was also of the opinion that it should not be abolished altogether. This,  because such a step might lead to personal competence criteria for persons wishing to continue working after the normal retirement age, and such criteria might demean and infringe the dignity of those workers. In addition, Prof. Raday believed that abolishing the mandatory retirement age would make it difficult to plan manpower in the workplace.

 

6.         In March 2003, the Government adopted the recommendations of the Netanyahu Commission, making the necessary adjustments to accomodate the passage of time and the changes in the economy since the recommendations were made. Pursuant to the Government's decision, the Retirement Age Bill, 5764-2003 (S.H. 64), was submitted, proposing a comprehensive arrangement for retirement age in Israel, and the required legislative amendments. The Explanatory Notes to the Bill explained the need for legislation in this area:

 

            The ongoing increase in life expectancy, together with the increase in the ratio between the number of elderly in Israeli society and the general population, are not phenomena that are unique to the State of Israel and they exist in most countries of the developed world. These phenomena have led many developed countries, like the USA, to make changes to their prevailing retirement age arrangements in order to adapt the labor market and social security systems (both state and non-state systems) to those changes.

 

            … In July 2000, the Public Commission [the Netanyahu Commission – MN] submitted its recommendations on the said issues, among them te following:… the  mandatory retirement age, namely the age at which an employee may be required to retire because of age, should be raised from 65 to 67. The said rise should be implemented gradually, at the rate of one year every three years, so that it will extend over six years… The Commission believed that it would be appropriate to ground its recommendations in primary legislation, in view of the comprehensive and innovative character of recommended arrangement,and in order to ensure equality among all the residents of the State of Israel".

 

7.         On January 7, 2004, the Bill passed on second and third readings in the Knesset, and on January 18, 2004, the Retirement Age Law, 5764-2004 was published.

 

The Law that is the Subject of the Petition

 

8.         The Retirement Age Law regulates various aspects of retirement age. The stated purpose of the Law is to prescribe standard rules with regard to retirement age, including raising it gradually. Thus the purpose clause of the Law states:

 

Purpose

1.

The purpose of this Law is to establish standard rules with regard to retirement age, including raising it gradually, while applying the said rules both in regard to entitlement to the benefits granted to whomever has attained the said age, and in regard to entitlement to the benefits granted to whomever has not yet attained the said age, until he does attain that age.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9.         To achieve that purpose, the Law lays down several provisions concerning the mandatory retirement age and regarding the qualifying age. Section 3 of the Retirement Age Law provides that the age at which a person is entitled to retire voluntarily (the qualifying age) is 67 for a man and, subject to certain provisions, 62 for a woman. Section 5 of the Law provides that upon certain conditions, a person can retire voluntarily at an earlier age. Section 4 of the Law, around which this petition herein revolves, embodies the mandatory retirement age. It provides:

 

Mandatory retirement age

4.

The age at which an employee can be required to retire because of age is 67 for a man and for a woman (in this Law – mandatory retirement age).

 

 

This provision of the Law does not lay down a mandatory obligation to retire from work at the age of 67, but provides that an employer can reauire that an employee retire because of age. Alongside this, section 10 of the Retirement Age Law provides that an employee and employer can agree that the retirement age will be different from the mandatory retirement age. Among other things, it can be agreed that the retirement age will be higher than the mandatory retirement age:

 

Priority

10. (a)

The provisions of this Law [the Retirement Age Law - MN] shall apply notwithstanding as provided in any agreement.

 

 

     (b)

Notwithstanding the provisions of subsection (a), it may be provided by agreement –

 

 

 

(1)

that the age at which an employee can be required to retire from work because of age shall be higher than mandatory retirement age;

 

 

 

(2)

that the age at which an employee is entitled to receive benefits because of his retirement from work on account of his age even before he has attained retirement age shall be less than early retirement age, provided that the employer shall bear the cost deriving therefrom in full; the Minister may authorize an entity other than the employer to bear all or part of the cost provided in this paragraph instead of the employer; notice of such authority as aforesaid shall be published in the Official Gazette.

 

 

      (c)

The provisions of this Law shall apply unless otherwise provided in another Law (emphasis added – MN).

 

 

Developments in Case Law after Enactment of the Retirement Age Law: the  Weinberger Decision

 

10.       After the Retirement Age Law was enacted, an appeal was filed in the National Labour Court that asserted that the obligation to retire at the age of 67 was unconstitutional (LabA (National) 209/10 Weinberger - Bar Ilan University (December 6, 2012) (hereinafter: the Weinberger case)). In the alternative, it argued that the Retirement Age Law, according to its interpretation, provides that if an employee asks the employer to continue working after the age of 67, the employer is obliged to give relevant consideration to that request on an individual basis. The National Labour Court (per Judge S. Davidow Motola, President N. Arad, Judge O. Verbner and Public Representatives S. Habshush and Y. Belizovsky concurring) allowed the appeal in part. The court stated that the mandatory retirement arrangement infringed constitutional rights, and such being the case, an examination should be made as to whether the infringement complies with the conditions of the Limitation Clause. The court further held that, prima facie, mandatory retirement is intended for a proper purpose, but there are questions as regards its compliance with the requirement of proportionality. In that context, the court addressed whether it might be proper to adopt a different retirement arrangement that would, mitigate the serious infringement of elderly workers' rights to the extent possible. Nevertheless, the court held that it did not intend to rule on the constitutional issue:

 

            Let us first say that although this court has recognised in its case law, and still recognises, the problems involved in fixing a uniform compulsory retirement age by virtue of a statutory provision, we have decided to leave the ruling on the constitutional issues to the Supreme Court…

 

            Without derogating from the this court’s competence to try constitutional issues, including in the course of indirectly challenging a statute, regard should be had to the fact that jurisdiction to try a direct challenge to the Law – in a way that will apply to everyone, not merely to the direct parties to the dispute – is vested in the Supreme Court, and it is the appropriate and proper instance forexercising constitutional review of a law of such broad scope that has such overall social and economic importance" (paras. 43 and 63).

 

Prenthetically, I would remark that the court will not always deem it appropriate to award relief in the event of an indirect challenge, in circumstances where the party has refrained from presenting the alleged flaw for judicial review by a direct challenge (see and compare: CFH 1099/13 State of Israel v. Abu Pariah, paras. 8-12 (April 12, 2015); LAA 7363/09 Mishan Centre Ltd v. Tel Aviv – Jaffa Municipality, para. 8 (March 2, 2010) and the references there; on the Labour Court's competence to entertain an indirect challenge, see: section 39 of the Labour Court Law, 5729-1969, which refers, inter alia, to section 76 of the Courts Law [Consolidated Version], 5744-1984 regarding incidental jurisdiction). The Labour Court had power not to deal with the constitutional issue. The question whether the Labour Court exercised its discretion properly in those proceedings is not before us, and in any case does not need to be decided.

 

            As for the matter of the Retirement Age Law's interpretation, the Labour Court stated that section 10 of the Law makes it possible to agree to a retirement age that is higher than the mandatory retirement age. Consequently, an employee is entitled to put it to the employer that he wishes to continue working even after accepted retirement age. Alongside that, the Labour Court held that the employer, for his part, must exercise due, individual discretion in answer to the request. The Labour Court enumerated a series of factors that the employer must take into account, like the personal circumstances of the employee, his entitlement to pension and verall concerns of the workplace. The Labour Court emphasised that those factors are not a closed list, and that in any event the employer does not have to continue employing the worker after the hearing. The Labour Court stated, obiter dictum, that according to its interpretation, the mandatory retirement arrangement might permit the employer to require an employee to retire because of his age only in circumstances in which ending the employment involves "leaving on pension", namely "only in circumstances in which there is an overall pension arrangement that regulates the pension age, in the scope and by virtue, of which the employee is entitled 'to leave on pension'" (ibid., para. 71). Nevertheless, it was held that in the circumstances of the case before the Labour Court, it was unnecessary to definitively decide the issue since the appellant there was in any case ending her employment in the framework of a comprehensive pension arrangement, and as part of a collective agreement that gave her tenure. As to the crux of the matter, the Labour Court found that in the case before it, the employer had not summoned the appellant to a hearing or examined the appellant's request to continue working after retirement age. The Labour Court therefore allowed the appeal in part, in the sense that the employer was ordered to pay the appellant compensation of NIS 50,000.

 

            Further to the judgment in Weinberger, in which it was held as aforesaid that this Court should consider the constitutionality of the mandatory retirement arrangement, the petition before us was filed.

 

The Petitioners

 

11.       The first and second Petitioners are members of the academic staff of the Technion – Israel Institute of Technology (hereinafter:  the Technion). The first Petitioner, Prof. Gavish, is a full professor in the Faculty of Medicine of the Technion. The second Petitioner, Prof. Segev, is a full professor in the Faculty of Physics of the Technion and also holds the title of Distinguished Professor. According to para. 16(b)(1) of the collective agreement between the Technion and several other employers and the employee organizations (hereinafter: the Pensions Constitution"), senior academic staff members must retire at the age of 68 (one year over the mandatory retirement age prescribed in the Law). Nevertheless, according to the procedures of the Technion, a full professor, whose academic achievements so justify will, on attaining mandatory retirement age, be appointed as an emeritus professor of the Technion. An emeritus professor may continue teaching, mentoring and research work, albeit on a limited scale in comparison with the work of a tenured professor of equivalent rank. According to the Pensions Constitution, Prof. Gavish reached retirement age in October 2014 and could be appointed an emeritus professor. Prof. Segev is expected to reach retirement age in 2027 but because of his senior title – Distinguished Professor –the procedures of the Technion will permit him to extend his service as a tenured senior staff member with an appointment, subject to the necessary approvals.

 

            The third Petitioner, Prof. Kasher, took early retirement and is now Emeritus Professor of the Chair in Professional Ethics and Philosophy of Practice, and Emeritus Professor of philosophy at Tel Aviv University.

 

            As will be explained below, the Petitioners assert that section 4 of the Retirement Age Law which, as aforesaid, grounds the possibility of compelling an employee to retire because of his age, is void.

 

Applications to Join the Petition

 

12.       After the petition had been filed, Prof. (Emeritus) Ruth Ben-Israel filed an application to join the petition as a Petitioner or, in the alternative, as amicus curiae. Prof. Ben-Israel served for many years as a full professor at Tel Aviv University. Over the years she published extensive, important research in labour and social security law, such as on collective agreements, the right to strike and equal opportunities at work. Because of her activity in those years, Prof. Ben-Israel has achieved academic recognition, a variety of degrees, and even the Israel Prize. Prof. Ben-Israel applied to join the proceedings in order to support the petition and, according to her, to put her knowledge and expertise on the issues before the Court. Prof. Ben-Israel stated that she has been researching the phenomenon of discrimination against the elderly in the labour market for years, and she regards herself as being at the forefront of the fight against age discrimination. Prof. Ben-Israel also filed an affidavit in which she detailed the difficult personal experience that she had undergone when she had to retire from the senior academic staff of Tel Aviv University.

 

13.       Another application to join was filed by the Association of Law in the Service of the Elderly. The purpose of the Association is to promote the rights of the elderly in Israel, and in order to achieve that purpose, it operates at the public and legal level. The Association's main battle is against discrimination against the elderly because of their age (a phenomenon which is called ageism). The Association also applied to support the Petitioners' pleas.

 

The Proceedings Before Us

 

14.       There were two oral hearings on the petition. At the end of the first hearing, an order nisi was issued, directing the Respondents to show cause why section 4 of the Retirement Age Law should not be declared void. It was further decided that opposition to the order nisi would be heard before an extended bench, and that the applications to join would be referred to it (President A. Grunis, and Justices E. Arbel and D. Barak-Erez, judgment and decision of February 12, 2014). Other relief that was sought in the petition was struck out by consent of the Petitioners, while reserving their right to raise them in regard to the stricken issues.

 

15.       On November 18, 2014,  a hearing was held before an extended bench of seven Justices. At the end of the hearing, we asked the Attorney General to submit his opinion on the rule established by the National Labour Court in the Weinberger case, and we ordered that the other parties could reply to his opinion. Finally, it was decided that a judgment would be handed down after the notices and replies had been received (Deputy President M. Naor and Justices E. Rubinstein, E. Hayut, Y. Danziger, N. Hendel, U. Vogelman and D. Barak-Erez, decision of November 18, 2014).

 

The Parties' Main Arguments

 

            The Petitioners' Arguments

 

16.       According to the Petitioners, work is a means for their self-fulfilment, health and longevity. Their only wish is to continue working regularly, without the Technion taking into account the retirement age fixed in the Law or in the Pensions Constitution. The Petitioners believe that an employee's age cannot serve as a criterion for his abilities or skills, and that giving weight to that datum is discriminatory and demeaning, contrary to the Employment (Equal Opportunities) Law, 5748-1988 (hereinafter: the Equal Opportunities Law), and also inconsistent with the relevant case law of the Supreme Court. The Petitioners therefore argued that the mandatory retirement arrangement seriously infringes their constitutional right to equality and to freedom of occupation to an extent that is greatr than required. They assert that the biological retirement model can be replaced by a functional retirement model, based on individual competence criteria. According to them, functional retirement presents a lesse infringement of the rights of elderly employees because it is bases the end of the empoyment relationship on a relevant foundation – the worker's performance. The Petitioners emphasized that in Israel there are already individual competence tests, such as those conducted for state employees, and there is therefore no particular difficulty in making use of them in the framework of an overall retirement arrangement. The Petitioners also argued that the harm caused to them exceeds the benefit that derives from the Law. Finally, the Petitioners explained that, in their view, the interpretation of the National Labour Court in the Weinberger case, according to which an employer is obliged to give individual consideration to the request of an employee to continue working after the accepted retirement age, does not make the mandatory retirement arrangement constitutional.

 

            In view of the above, the Petitioners asked that we strike down section 4 of the Retirement Age Law, and consequently order that para. 16 of the Technion's Pensions Constitution is  void, and other relief. Thereafter, on the recommendation of this Court, the Petitioners focused the petition exclusively on the constitutionality of sec. 4 of the Retirement Age Law. 

 

The Respondents' Answers

 

17.       The first Respondent is the Israel Knesset. The second and third Respondents are the Minister of Finance and the Attorney General (hereinafter referred to together as: the State), while the fourth Respondent is the Technion.

 

18.       According to the State, a mandatory retirement arrangement passes the constitutionality test. The State first asserted that the issue of retirement age is a multifaceted economic and social issue, and that judicial intervention in might have far-reaching implications for the Israeli economy. The State went on to argue that it is doubtful whether mandatory retirement infringes constitutional rights because in certain respects, it benefits workers. First, it helps increase job security until retirement age. Second, it permits the entry of new workers into the labor market. Finally, it saves workers having to undergo constant review of their competence in individual competence examinations. The State also asserted that in various countries, a variety of retirement arrangements, including mandatory retirement arrangements, has been introduced. The State emphasized that the various different retirement models have advantages and disadvantages, and that in such circumstances the legislature's decision to choose the mandatory retirement model is not illegitimate. In addition, the State asserted that since the enactment of the Retirement Age Law, the participation of the elderly in the labor market has increased; that the rate of elderly workers in Israel is among the highest in the world; and that the average, actual retirement age is also higher in comparison with other countries. Consequently, the State argued that the Retirement Age Law has not proven detrimental to the situation of elderly workers.

 

19.       As regards the interpretation of the Law laid down in the Weinberger case, in its reply of February 9, 2015 the State did not dispute that an employer is obliged to consider an employee's request to continue working after reaching retirement age, but emphasised that that did not mean that the employer must extend the employee's employment. In addition, according to the State, it is unnecessary to rule on the scope and nature of the factors that the employer must consider in that regard. In order to demonstrate this, the State noted that it doubted whether the employer should, for example, be required to consider the extent of an employee's entitlement to pension. According to the State, obliging the employer to consider that factor might deter employers from employing candidates who are not likely to accrue sufficient pension rights by the time of reaching the mandatory pension age.

 

20.       The Knesset asked to join the State's arguments, and emphasised three matters: first, according to the Knesset, it is not at all clear that the arrangement infringes the rights of elderly persons. According to the Knesset, an arrangement of compulsory retirement because of age might be to the benefit of elderly workers and safeguard their dignity. Secondly, it argued that support for the arrangement existing in Israel can be found in comparative law, especially in Europe. Finally, the Knesset asserted that ruling on the question of retirement age is complex and has far-reaching implications for the labour market, and that being the case, the decision should be made by the legislature.

 

21.       In its response, the Technion, adopted the position of the State as regards the constitutionality of the mandatory retirement arrangement. According to the Technion, the Retirement Age Law adopted the conclusions of the Netanyahu Commission, which had considered the matter and all the factors relevant to the issue of retirement age. Consequently, according to the Technion, there is no justification for judicial intervention in the Law. The Technion further contended that the advantages of a mandatory retirement arrangement are of particular importance in the context of collective agreements, like the Pensions Constitution, which constitute a "package deal", comprising long-term employment alongside a constant increase in wages, on the one hand, and a predetermined time for the labor relationship to end, on the other hand. The Technion asserted that arrangements of this type are especially important in institutions of higher education, in which academic freedom should be maintained. It argued that abolishing the mandatory retirement age would negatively affect collective agreements that are for the benefit of workers, and also harm the Technion's administrative and budget flexibility. Finally, the Technion argued that the interpretation of the mandatory retirement arrangement made in the Weinberger case expresses a balanced solution, suitable to the labor relationship, and makes it unnecessary to abolish the mandatory retirement age.

 

The Response of the Petitioners and Prof. Ben-Israel

 

22.       In their response of September 15, 2014 the Petitioners and Prof. Ben-Israel presented arguments counter to those of the Respondents. It was first argued that the consideration that a mandatory retirement age promotes job security might be relevant only to employees who enjoy tenure and not workers who are employed under personal contracts. In this connection it was asserted that nowadays the majority of workers in the economy are not governed by employment arrangements that incorporate job security, and the mandatory retirement arrangement is of no advantage to them. In addition, it was argued that the Respondents' position with regard to the need to give the employer tools to plan the workforce at the workplace is not persuasive because it was not raised in other relevant contexts. Thus, for example, section 5 of the Retirement Age Law enables, as aforesaid, an employee to retire voluntarily before reaching the qualifying age. However, although the possibility of early retirement also impairs certainty, it was never argued that it makes it difficult for the employer to manage the workplace. The Petitioners further argue that individual competence tests do not demean the employee since, according to them, the requirement of continuing conformity of a worker to the needs of his job is a relevant requirement. Finally, the Petitioners again warned that the solution outlined by the National Labour Court in the Weinberger case "perpetuates and aggravates discrimination against the elderly because it gives it a color of constitutionality" (ibid., para. 26).

 

Discussion and Ruling

 

23.       The question for us to decide is the constitutionality of section 4 of the Retirement Age Law. It is acknowledged that the Court undertakes judicial review of the Knesset's primary legislation with cautious restraint. "In its legislation, the Knesset gives expression to the will of the people's elected representatives" (HCJ 7717/13 Colian v. Minister of Finance, para. 8 (October 2, 2014)). Therefore, "the Knesset's legislation enjoys the presumption of constitutionality, which imposes a substantial burden on whoever argues against it" (HCJ 6304/09 Lahav - Israel Organization of the Self-Employed v. Attorney General, para. 62 (September 2, 2010) (hereinafter:  the Lahav case)). A review of the constitutionality of a statute is of narrow scope, which necessitates a delicate balance between the principles of majority rule and the separation of powers, on the one hand, and the constitutional protection of human rights and the fundamental values of the Israeli regime, on the other hand (HCJ 2605/05 Academic Centre for Law and Business, the Human Rights Division v. Minister of Finance, IsrSC 63 (2) 545, 593 (2009) [English: http://versa.cardozo.yu.edu/opinions/academic-center-law-and-business-v-...  (hereinafter: the Prison Privatization case)).

 

24.       Special care is necessary when legislation is involved that delineates wide-ranging social and economic policy (HCJ 1715/97 Israeli Bureau of Investment Managers v. Minister of Finance, IsrSC 51 (4) 367, 386, 388-389 (1997); Lahav, paras. 62-64; Prison Privatization, p. 593; HCJ 4885/03 Israel Association of Poultry Farmers Cooperative Agricultural Society Ltd v.  Government of Israel, IsrSC 59 (2) 14, 60 (2005) [Engish: http://versa.cardozo.yu.edu/opinions/israel-poultry-farmers-association-... HCJ 4948/03 Elhanati v. Minister of Finance, IsrSC 62 (4) 406, 467-468 (2008) (hereinafter:  the Elhanati case). As Justice D. Beinischsummarised in HCJ 4769/95 Menahem v. Minister of Transport, IsrSC 57 (1) 235, 263 (2002) (hereinafter: the Menahem case):

 

            … It has been emphasised many times in this Court's case law that in applying the constitutional criteria prescribed in the Limitation Clause to the legislation of the Knesset, the Court will act with judicial restraint, caution and moderation. This is particularly so when the legislation under constitutional review is in the area of the economic market, which involves broad social and financial aspects. In these spheres there can often be several possible objectives and courses of action. Deciding among them is often based on an evaluation that involves uncertainty, and that involves forecasts and professional considerations that are not always within the expertise of the Court. An incorrect evaluation of the situation may lead to instability or even upheaval in the State economy. Consequently, the authorities responsible for economic policy – the executive branch and the legislative branch – should be given broad discretionary space, since they determine the overall policy, and bear the public and national responsibility for the State economy. Furthermore, the choice between the various different objectives and courses of action in the economy may derive from social-economic perspectives that, despite being different and even contradictory, may all coexist within the framework of the Basic Laws.

 

This statement should also guide us in reviewing the constitutionality of the Retirement Age Law. The issue of retirement is a complex one, that combines both economic and social aspects (LabA (National) 56/196-3 Dead Sea Works Workers Council v. Sharabi, IsrLC 30 283, 313 (1997)). Retirement age itself is a complex, multifaceted subject. It is not without reason that there are several different models in the world in this sphere (for a comprehensive survey of the different models, see Pnina Alon-Shenkar, “Ending Mandatory Retirement: Reassessment,” 35 Windsor Rev. Legal & Soc. Issues 22 (2014) (hereinafter: the Shenkar case); I shall address this again below). Of the possible solutions, the Israeli legislature has decided to adopt a collective model in the Law, which prefers the criterion of age to a specific review of the individual (see, for example: HCJ 7957/07 Sadeh v. Minister of Internal Security, para. 11 of the opinion of Justice E. Hayut (September 2, 2010) (hereinafter referred to as "Sadeh"); HCJ 4487/06 Kelner v. National Labour Court, para. 2 of the opinion of Justice E. Rubinstein (November 25, 2007) (hereinafter: referred to as HCJ Kelner)). This decision results from the conclusions of the Netanyahu Commission, which examined all the aspects of the issue under review. In such circumstances, although the Court will not refrain from exercising constitutional review, it will do so with extreme care (the Prison Privatization case, pp. 593-594; for criticism of certain aspects of this approach, see: Barak Medina,

“‘Economic Constitution,’ Privatization and Public Finance: A Framework of

Judicial Review of Economic Policy,” in Zamir Book on Law, Society and Politics 5, 583, 648-652 (Yoav Dotan and Ariel Bendor (eds), 2005) (Hebrew)).

 

25.       As customary, the review of an argument against the constitutionality of a statute is carried out in stages. First, it is necessary to determine whether the statute infringes a human right grounded in a Basic Law. If the answer is negative, constitutional review comes to an end. If the answer is affirmative, it becomes necessary to examine whether the infringement is lawful, in accordance with the conditions of the Limitation Clause. This expresses the approach prevailing in our legal system, according to which constitutional human rights are relative. Consequently, they can be limited if there is justification for so doing. If the infringement is lawful, the constitutional review ends. If the infringement is unlawful, to the Court must determine the consequence of that unconstitutionality (see and compare: HCJ 7052/03 Adala - The Legal Center for Arab Minority Rights in Israel v. Minister of the Interior, IsrSC 61 (2) 202, 281-282 (2006) [English: http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-r... (hereinafter: the Adala case); HCJ 2334/02 Stenger v Speaker of the Knesset, para. 5 of the opinion of President A. Barak (November 26, 2003); HCJ 2254/13 Samuel v  Minister of Finance, para. 8 of the opinion of Justice N. Hendel (May 15, 2014)).

 

            We will now proceed to a review of the constitutionality of the mandatory retirement arrangement.

 

Does Compulsory Retirement by Reason of Age infringe the Right of Equality Deriving from the Constitutional Right to Human Dignity?

 

26.       The Petitioners' main argument is that the Retirement Age Law unlawfully infringes the right of equality that derives from the constitutional right to human dignity. Israeli case law has long recognized the right to equality as a fundamental right of prime importance (see: HCJ 1213/10 Nir v. Speaker of the Knesset, paras. 11-12 of the opinion of President D. Beinisch (February 23, 2012) and the numerous authorities there (hereinafter: the Nir case); Aharon Barak, Human Dignity: The Constitutional Right and its Daughter Rights, vol. II 685-688 (2014) (Hebrew); Itzhak Zamir and Moshe Sobel, “Equality before the Law,” 5 Mishpat Umimshal 165, 165-170 (5760) (Hebrew)). "Equality is a foundation of social existence. It is one of the pillars of the democratic regime" (HCJFH 4191/97 Recant v. National Labour Court, IsrSC 54 (5) 330, 362 (2000) (hereinafter:  HCJFH Recant). The right to equality has also been recognized as a constitutional right under the intermediate model that also includes discrimination that does not involve humiliation, provided that it is closely associated with human dignity (HCJ 6427/02 Movement for Quality Government in Israel v. Knesset, IsrSC 61(1) 619 (2006) (hereinafter:the Yeshiva Students case)). The other side of the equality coin is the prohibition of discrimination. There are clear reasons for the prohibition of discrimination: discrimination leads to the creation of a sense of oppression, frustration and social ostracism (Nevo, p. 760). It "… completely erodes human relations…" (HCJ 7111/95 Center for Local Government v. Knesset, IsrSC 50 (3) 485, 503 (1996)).

 

27.       Equality – and the prohibition of discrimination that it entails – are also necessary in labor law ( the Recant case, pp. 340-341; HCJ 1268/09 Zozal v. Israel Prison Service Commissioner, para. 13 of the opinion of Justice E. Hayut (August 27, 2012) [English: http://versa.cardozo.yu.edu/opinions/zozal-v-israel-prison-service-commi... (hereinafter: as the Zozal case); Ruth Ben-Israel, “Occupational Equality, Where from and Where To?" 6 Labour Law Yearbook 85 (1996) (Hebrew)). "This area is 'asking for trouble' as regards prohibited discrimination" (the Elhanati case, p. 450). Consequently, in labor law there is extensive legislation aimed at promoting employment equality (see, for example: Female and Male Workers Equal Pay Law, 5756-1996; the Employment of Women Law, 5714-1954). A central law that reflects the importance of equality in the context of labor law is the Equal Opportunities Law. That statute prohibits an employer from discriminating among employees or among those seeking employment on the basis of their sex, sexual orientation, personal status, pregnancy, fertility treatment, IVF treatment, being parents, their age, race, religion, ethnic group, country of origin, views, political party, or their service in reserve duty, their call for service in reserve duty or their anticipated service in reserve duty (section 2(a) of the Equal Opportunities Law). An exception thereto can be found in section 2(c) of the statute which provides: "Differential treatment necessitated by the character or nature of the assignment or post shall not be regarded as discrimination under this section”.

 

28.       Discrimination by reason of a person's age was already prohibited in certain contexts in Israel at the end of the 1950s (see, for example: sec. 42(a) of the Employment Service Law, 5719-1959; HCJFH Recant, p. 367-369), but only in recent years do we find growing has public and legal awareness (HCJ 10076/02 Rosenbaum v. Israel Prison Service Commissioner, IsrSC 61 (3) 857, 872 (2006) [English: http://versa.cardozo.yu.edu/opinions/rosenbaum-v-israel-prison-service-c... (hereinafter: the Rosenbaum case) and the references  cited there). The primary occurence of discrimination on account of age is discrimination against "the elderly" or "the old", referred to as “ageism” (Israel (Issie) Doron, “Ageing and Anti-Ageing in Israel’s Supreme Court Rulings,” 14 HaMishpat 65 (5771) (Hebrew); Israel Doron and Einat Klein, “The Inappropriate Arena? Discrimination because of Age in the Eyes of the District Labor Court,” 12 Labour, Society and Law 435 (2010) (Hebrew); Israel (Issie) Doron, Old Age in the Temple of Justice: The Old and Ageism in the Case Law of the Supreme Court, (2013) (Hebrew) (hereinafter: Doron)). Discrimination because of age "… usually reflects the entrenchment of stereotypes with regard to the limitations of the body and the mind of the older person. Usually this has no rational or objective basis” " (the Rosenbaum case, p. 871). Such discrimination is not unique to Israel. It exists in the majority of the Western world. Some explain its growing prevalence by the trend of population ageing, which has led to an increase in the number of elderly who constitute part of the general workforce (Pnina Alon-Shenkar, “The World Belongs to the Youth: On Discrimination against Senior Workers and Mandatory Retirement,”, in Liber Amicorum Dalia Dorner Book 81, 82-84, Shlomit Almog, Dorit Beinisch & Yaad Rotem (eds), (5769) (Hebrew) and the comparative research cited there (hereinafter:  Shenkar – The World Belongs to the Youth); see also Batia    Ben-Hador, Aliza Even,      Efrat            Appelbeum,   Hadas Dreiher,          Daphna          Sharon, Yinon Cohen, Guy Mundlak, “Assessing            Employment Discrimination          in         Hiring by Correspondence  Studies,”  11 Labour, Society and Law 381, 395 (2005); Equality at Work: the Continuing Challenge, Global Report under the Follow-Up to the ILO Declaration on Fundamental Principles and Rights at Work, International Labour Conference, 100th Session 2011 (Report I(B)), p. 49). It is against that background that the prohibition of age discrimination was added to the Equal Opportunities Law in 1995.

 

29.       Discrimination against a person because of age in the field of employment may be expressed at different stages of the labor relationship between the employee and the employer. This was addressed by the National Labour Court in the Weinberger case:

 

            Discrimination against an elderly person in employment is expressed at all the stages of the relationship between him and the employer or potential employer, from the hiring stage… through determination of the terms of employment and limited promotion options… to the stage of employment termination ”as a catalyst for the employee's dismissal or retirement” (para. 27 of the opinion of Judge S. Davidow-Motola).

 

Age discrimination can also occur upon retirement. To date, the Court has assumed that a compulsory retirement age can be fixed, but that it must be done equally. Consequently, it has been held that the determination of a retirement age that is younger than customary for a certain type of worker without substantive justification is unlawful (see, for example: HCJFH Recant, pp. 364-370; Rosenbaum; Sadeh; Zozal; Nevo; Niv; LabA (National) 1313/04 Asa v. El Al Israel Airlines Ltd, para. 22 of the opinion of Judge S. Zur (March 23, 2006) (hereinafter: the Asa case); LabA (National) 14705-09-10 Muzafi v. Bank Leumi Ltd, paras. 28-31 of the opinion of Judge V. Wirth Livne (May 16, 2012) (hereinafter:  the Muzafi case); LabA (National) 203/09 The Agudath Israel Kindergarten Network v. Boussi, para. 41 of the opinion of Judge R. Rosenfeld (October 2, 2011); LabA (National) 1414/01 Dead Sea Works Ltd. v. Nissim, IsrLC 40 193 (2004) (hereinafter: the Dead Sea Works case); cf. HCJ 6778/97 Association for Civil Rights in Israel v. Minister of Internal Security, IsrSC 58 (2) 358 (2004) [English: http://versa.cardozo.yu.edu/opinions/association-civil-rights-v-minister... (hereinafter: the Association for Civil Rights case)). However, the question of whether requiring a person to retire from work at a predetermined, uniform age is discriminatory per se has not yet been decided in our law. In any event, hard and fast rules have not been laid down as to whether compulsory retirement because of age amounts to the infringement of a constitutional right.

 

30.       The question whether compulsory retirement because of age infringes equality has been described in the case law of this Court as a complex one, on which comparative law is not  unanimous (Rosenbaum, p 875; also see and compare: Sadeh, para. 11 of the opinion of Justice E. Hayut). In the Recant case, various opinions were advanced on the subject, but no binding precedent was set. Justice I. Zamir was of te opinion that age discrimination can find expression in the workplace, inter alia, in the very requirement to retire at some particular age (ibid., pp. 341-342). On the other hand, in the same case, Justice M. Cheshin stated that Israeli law does not prohibit fixing of a compulsory retirement age for workers, and that fixing such an age is not "at the present time" regarded as age discrimination (ibid., p. 336). President D. Beinisch, for her part, stated that "… according to the norms currently accepted in Israel, the fixing of a compulsory retirement age, which is within the accepted norm both in legislation and in collective labor agreements, is not unlawful discrimination but a permitted, relevant distinction because of age…" (ibid., p. 374). Justice D. Beinisch went on to say that "new winds are blowing in our society, as in other societies, and future development cannot be ruled out that will undermine the point of departure in regard to the proper compulsory retirement age and perhaps even in regard to compulsory retirement because of age in general" (ibid.).

 

31.       Opinions are also divided in the legal literature. There are those who assert that retirement based on the employee's chronological age infringes his dignity (see, for example: Ruth Ben-Israel,  “Retirement Age in light of the Principle of Equality: Biological or Functional Retirement,” 43 Hapraklit 251 (1997) (Hebrew) (hereinafter: Ben-Israel); Shnit, p. 509). Others believe that there are concrete circumstances in which a substantive distinction is involved (for example, Sharon Rabin-Margalioth, “Age Discrimination in Israel: A Power Game in the Labor Market,”, 32 Mishpatim 131 (5762) (hereinafter:Rabin-Margaliot) (Hebrew); Sharon Rabin-Margalioth, “The Elusive Case of Employment Discrimination: How Do We Prove Its Existence?”  44 Hapraklit 529 (1999) (Hebrew)).

 

32.       The question whether requiring an employee to retire from work at a uniform age infringes the right to equality is indeed a venerable one. In order to analyze the matter, I am willing to accept that compulsory retirement because of age – as it appears in the Retirement Age Law – does infringe the right to equality that derives from the constitutional right to human dignity, as I shall explain. . The Law under review, according to its wording and purpose, is sweeping, and comprehensive. It distinguishes as regards retirement between young employees and elderly ones without any direct link to their competence or work capacity (see: Zozal, para. 24 of the opinion of Justice S. Joubran). It applies to all employees in the economy, without distinguishing among different types of occupation, types of employee or terms of employment. In such circumstances, individuals might understandably be harmed (HCJ Kelner, para. 2 of the opinion of Justice E. Rubinstein; Shnit, pp. 508-509; Rabin-Margalioth, pp. 144-147; cf. the position of Justices M. Cheshin and D. Beinisch in  the Recant case, supra). Furthermore, it is acknowledged that “The principle of equality does not operate in a social vacuum. The question whether a certain case involves discrimination between equals, or whether it merely involves different treatment of different people, is decided on the basis of the accepted social outlooks” " (HCJ 721/94 El Al Israel Airlines Ltd v. Danilowitz, IsrSC 48 (5) 749, 779 (1994) [English: http://versa.cardozo.yu.edu/opinions/el-al-israel-airlines-v-danielowitz, para. 4, per Dorner J]). While in the past the prevailing view was that there is a close connection between age and performance, it is now clear that reality is more complex and the effect of age on body and mind differs from one person to another (see: The Netanyahu Commission Report, p. 6). In this regard the saying goes that "the only generalization that can be made about the elderly is that one cannot generalize" (Doron p. 28). Consequently, making decisions on the basis of attribution to the elderly group is, as aforesaid, likely to cause injustice to the individual. By way of comparison, that was also the opinion of the Supreme Court of Canada (McKinney v. University of Guelph [1990] 13 C.H.R.R. D/171 (S.C.C) (hereinafter: the Mckinney case; see also Dickason v. University of Alberta, [1992] 2 S.C.R 1103 (hereinafter:  the Dickason case); Harrison v. University of British Columbia [1990], 3 S.C.R. 451; Stoffman v. Vancouver General Hospital [1990] 3 S.C.R. 483).

 

33.       I therefore believe that an infringement of equality is involved. It is acknowledged that not every infringement of equality amounts to an infringement of human dignity. However, in the case before us, we are not concerned with a trivial infringement. Discriminating against an elderly person is harsh and outrageous, and it even "involves an element of humiliation and infringement of his dignity as a person" (HCJFH Recant, p. 366; see also Ruth Ben-Israel and Gideon Ben-Israel, “Senior Citizens: Social Dignity, Status and Representative Organization,” 9 Labor, Society and Law 229 (5762) (Hebrew))). Added to this are the implications associated with making a person retire against his will. As Justice G. Bach stated in Nevo:

 

             Retirement from work has many negative personal, mental and social consequences. Frequently, a person who retires from his employment because of his advancing age feels that he is no longer a participant in the productive sector of society. He feels that he has been deprived of the satisfaction of working and receiving compensation for his labour. This feeling is also strengthened by society's attitude, which in many cases treats him as an "old man" who no longer serves any useful purpose. The situation is more acute in our day, where average life expectancy has increased and people remain healthy even at an advanced age. For this reason, the number of years have increased in which an older person, of sound body and mind, is forced, despite his capabilities, to leave his activities in the labour market and gaze, frequently in frustration, on the progression the accordingly of life's activities in which he can no longer take part  (ibid., p. 755 [http://versa.cardozo.yu.edu/opinions/nevo-v-national-labour-court at para. 5B(1)]).

 

And as Justice E. Hayut stated in Zozal:

 

            An older-person’s retirement is very significant, and carries weighty consequences for that person’s life, in financial and social terms, and no less with respect to the person’s self-image, given the insult inflicted on a person who is capable and wishes to continue working " (ibid., para. 15 [http://versa.cardozo.yu.edu/opinions/zozal-v-israel-prison-service-commi...).

 

Also apt in this regard is the statement of Justice I. Zamir in  the Recant case:

 

            Discrimination against a person because of his belonging to a group, for example discrimination because of race, religion or sex, infringes the person's dignity. It is demeaning.… Such is also the case in respect of discrimination concerning retirement age. A person who was active and effective, involved and useful is suddenly, in his own eyes and the eyes of those around him, made irrelevant. The harm generally caused to someone who has to retire from work at an age that is fixed as a general one for mandatory retirement is aggravated when a person belongs to a group of workers that has to retire at an earlier age (ibid., p. 342).

 

Although the statement was made in regard to compulsory early retirement, it is in my opinion also relevant here. Indeed, work is not merely a source for dignified minimal existence, but also a source for self-fulfillment and social fulfilment. Naturally, the greater the place that work occupies in an individual's life, the greater the harm caused as a result of compulsory retirement because of age. Having regard to the nature and extent of the harm, I am willing, as aforesaid, to accept that such harm amounts to an infringement of human dignity. This approach is consistent with opinions that have recently been expressed in the National Labour Court, according to which compulsory retirement because of age infringes constitutional rights (Weinberger, para. 57 of the opinion of Judge S. Davidow Motola; LabA (National) 107/05 Kelner v. Civil Service Commissioner, para. 7 of the opinion of President S. Adler (February 27, 2006) (hereinafter:  the Kelner case), and compare HCJ Kelner, para. 7 of the opinion of Justice E. Rubinstein; see further: the Asa case, para. 22 of the opinion of Judge S. Zur; the Muzafi case, paras. 16-17 of the opinion of Judge V. Wirth Livne).

 

34.       Even the Respondents do not wholeheartedly dispute that compulsory retirement because of age might harm the elderly who can and want to continue working. Nevertheless, according to them, that harm is negligible when considered against the advantages of a predetermined, uniform chronological retirement age. The Respondents assert that a mandatory retirement age protects the elderly against demeaning competence tests and helps promote job security. Therefore, they assert, weighing the interests of elderly workers as a group leads to the conclusion that a mandatory retirement arrangement protects, rather than harms, employees. These are serious arguments. However, I believe that they do not nullify the harm to the individual. In similar circumstances – in which various aspects of the same right clashed with each other – I stated:

 

            We are therefore concerned with a clash between two constitutional rights that are designed as fundamental. How can this clash be resolved? The solution is not one right “winning” over the other. Indeed, at the constitutional level, the clash cannot be completely resolved, as though “letting a hundred flowers blossom” … The solution will be found at the practical – sub-constitutional – level… A. Barak considered this clash between the subordinate rights of human dignity:

 

                        “The conflict between the subordinate rights does not lead to changing the bundle of rights that expresses the whole of human dignity. Indeed, the solution to the conflict will be found at the sub-constitutional level. At that level it will be determined if a sub-constitutional norm […] that has limited one subordinate right of human dignity in order to protect another subordinate right of human dignity is constitutional. The criterion for the determination of that constitutionality is the rules of proportionality”…

 

            That statement is also apt with regard to the sub-subordinate rights that clash in the instant case. One right does not retreat in the face of the other but a balance is determined between them at the sub-constitutional level. If it is found that the solution chosen by the legislature infringes the constitutional right of the student to obtain an education, then that infringement will only be constitutional if it is proportionate. Therefore, as my colleague Justice E. Arbel has stated, it is necessary to examine whether the statute complies with the criteria of the Limitation Clause… (HCJ 3752/10 Rubinstein v. Knesset, paras. 4-5 of my opinion (September 17, 2014); and compare the opinion of President A. Grunis there).

 

So too in the case before us. The protection of the individual against harm caused by requiring him to retire against his will does not retreat in the face of the necessary protection of the elderly as a group, but a balance must be struck between them in light of the criteria of the Limitation Clause (also see and compare: HCJ 42/94 Manco Food Import & Marketing v. Ministry of Trade and Industry (September 3, 1994) (hereinafter: the Manco case). The Respondents further asserted that the Petitioners have not proven that compulsory retirement because of age is makes there situation worse in comparison with that of young workers. In support of that argument, the Respondents adduced data showing that the participation of the elderly in the workforce is growing and that the actual retirement age in Israel is among the highest in the member states of the Organisation for Economic Cooperation and Development (hereinafter: the OECD). In my opinion, those data indicate less harm to the individual, but it appears that they are not sufficient to neutralize the harm. An employee's very obligation to retire against his will is likely to harm his dignity and his sense of competence, even if the age at which he is obliged to retire is relatively high (cf. HCJ 8665/14 Desta v. Knesset, paras. 58-60 of my opinion (August 11, 2015) (hereinafter: the Desta case)).

 

            In view of the foregoing, the point of departure for our further discussion is that a constitutional right, namely the right to equality that derives from the constitutional right to human dignity, is infringed. However, I would first say that the conclusion that I have reached is that the infringement meets the requirements of the Limitation Cclause and it would therefore be inappropriate to invalidate the provision of the Law that is under review.

 

The Criteria of the Limitation Clause

 

35.       Our assumption that the obligation of a person to retire because of his age infringes the right of equality that derives from the constitutional right to human dignity is not the end of the line in respect to the validity of the Retirement Age Law because it is still necessary to examine whether the infringement is lawful (Elhanati, p. 467; Nir, para. 17 of the opinion of President D. Beinish). The constitutionality of the infringement is examined in accordance with the conditions of the Limitation Clause, according to which constitutional rights are not to be infringed, unless by a law that befits the values of the State of Israel as a Jewish and democratic state, which is intended for a proper purpose and in a way that does not exceed what is necessary. The Limitation Clause is the criterion for balancing competing values (HCJ 10203/03 Hamifkad Haleumi v. Attorney General, IsrSC 62 (4) 715, 764 (2008) [English: http://versa.cardozo.yu.edu/opinions/hamifkad-haleumi-v-attorney-general). It reflects the approach prevailing in our law according to which constitutional rights are not absolute. "The Limitation Clause emphasises the concept that the individual lives within society and that the existence of society and its needs and traditions might justify the infringement of human rights" (the Yeshiva Students case, p. 692). This was also addressed by President D. Beinisch in the Prison Privatization case:

 

            The limitations clause expresses the balance provided in Israeli constitutional law between the rights of the individual and the needs of society as a whole and the rights of other individuals. It reflects our constitutional outlook that human rights are relative and may be restricted. The limitations clause therefore fulfils a dual role — it stipulates that the human rights provided in the Basic Laws shall not be violated unless certain conditions are satisfied, but at the same time it defines the conditions in which the violation of the human rights will be permitted (p. 620 [http://versa.cardozo.yu.edu/opinions/academic-center-law-and-business-v-..., para. 8]; emphasis added – MN).

 

The conditions of the Limitation Clause are, inter alia, examined having in light of the nature of the right infringed, the purpose of the enactment and the intensity of the infringement caused in the particular case (Nir, para. 18 of the opinion of President D. Beinish; Menahem, pp. 258-259).

 

36.       In the instant case, the infringement is in the Law. In their arguments before us, the parties did not address the question of the Law's befitting the values of the State of Israel as aJewish and democratic state at any length. Therefore, the purpose of the Law will first be discussed and finally – and this is the essence of the matter before us– the question of the Law's proportionality will be discussed.

 

Proper Purpose

 

37.       A purpose is proper if it is intended to achieve important public interests (see: Desta, para. 24 of my opinion, and the authorities cited there), or if it is intended to promote human rights, "including by prescribing a fair and reasonable balance between rights of individuals with conflicting interests in such a way as leads to a reasonable compromise in granting the optimum rights to each individual" (Menahem, p. 264).

 

38.       The general purpose of the Retirement Age Law is to prescribe uniform rules with regard to retirement age, including raising it gradually (section 1 of the Law). The determination of uniform rules for retirement is intended to promote several interrelated sub-purposes. Those purposes are not expressly mentioned in the purpose section of the Law, but they do find expression in the Explanatory Notes to the Retirement Age Bill, and in the recommendations of the Netanyahu Commission that formed the basis for the Law's enactment (see: The Netanyahu Commission Report, pp. 6-8 for the majority opinion, and pp. 31-32 for the minority opinion of Prof. Raday). The determination of a mandatory retirement age seeks to protect the dignity of workers and improve their job security in the economy until retirement age. At the same time, it is intended to enable the employer to manage the workforce at the workplace, especially in unionized workplaces, where the employees enjoy tenure. Mandatory retirement age is also intended to promote fairness among the generations – the integration and promotion of new employees in specific workplaces where the number of jobs is limited. Alongside this, raising the mandatory retirement age in the Law enables anyone so desirous to work longer, and it thereby also seeks to provide an answer to the continuing increase in life expectancy and the rise in the ratio between the number of elderly in Israeli society and the population in general. Since these demographic changes might cause difficulties in financing the increase created in the various different pensions and place a more onerous burden on social security systems, it has become necessary to extend the time for pension savings by means of a standard rise in the qualifying age and the mandatory retirement age (the Netanyahu Commission Report, pp. 9-10).

 

39.       In my opinion, these are proper purposes. The need to protect interests of workers and promote social security is one of the foundations of the whole of labour law. In addition, a purpose that seeks to safeguard the dignity and livelihood of elderly workers recognizes them as a separate group entitled to protection in the employment market, and expresses a proper awareness of the vulnerability of the elderly in labor relations. On the other hand, in my opinion, it is not improper to have regard for the interests of new workers in the labor market. Giving weight to those interests, prima facie strives towards finding compromises between different generational groups, on the assumption that, in time, everyone is likely to reach an advanced stage of  life (see: Kelner, para. 7 of the opinion of President S. Adler; Asa, para. 22 of the opinion of Judge S. Zur, para. 3 of the opinion of President S. Adler; Weinberger, para. 59 of the opinion of Judge S. Davidow Motola; cf. HCJ 1181/03 Bar Ilan University v. National Labour Court, IsrSC 64 (3)  204, 237 (2011) [English: http://versa.cardozo.yu.edu/opinions/bar-ilan-university-v-national-labor-court] (hereinafter: the Bar Ilan" case; for criticism of this purpose, see, for example: Shenkar, “The World Belongs to the Youth”, pp. 101-105; Shnit, pp. 509-513; Ben-Israel, pp. 259-261). The purpose of managing the workplace and planning manpower is not an improper purpose either.

 

            The purposes mentioned have also been recognized as proper purposes in comparative law. Thus, the European Court of Justice has held that legitimate purposes of an arrangement for mandatory retirement on account of age might include the protection of long-standing employees against the infringement of their dignity; the promotion of new employees and the creation of jobs; and enabling the employer to plan and manage the workforce at the workplace (see, for example: Palacios de la Villa v. Cortefiel Servicios SA (C-411/05) [2007]  (hereinafter:  Palacios de la Villa); Georgiev v. Tehnicheski Universitet - Sofia, Filial Plovdiv (C-250/09) [2010] (hereinafter: Georgiev); Torsten Hörnfeldt v. Posten (C-141/11) [2012] (hereinafter: Torsten Hörnfeldt); Fuchs (C-159/10) and Köhler (C-160/10) v. Hessen [2011] (hereinafter: Fuchs); Petersen v. Berufungsausschuss für Zähn für den Bezirk Westfalen-Lippe (C-341/08) [2010]. That was also the opinion of the Supreme Court in England (Seldon v. Clarkson Wright & Jakes [2012] UKSC 590 (hereinafter: Seldon), and of the Supreme Court in Canada (Dickason; Mckinney). It should be noted that further to a legislative change, the current legal position in Canada is not as it was when the said judgments were handed down. I shall refer to this below.

 

40.       The various purposes of the Retirement Age Law demonstrate the Law's aspiration to effect a balance between the rights and interests of the different "players" in the labour market: the needs of the employer, the rights of the different groups of employees, and the needs of the economy as a whole (see: Weinberger, para. 59 of the opinion of Judge S. Davidow Motola). This also finds expression in the overall provisions of the Retirement Age Law. Thus, for example, the Law enables an employer to require an employee to retire on reaching the age of 67, but this is nevertheless on the assumption that the employee will be entitled to a pension as a substitute for income from work. In addition, the Law does not compel an employee to retire from work on reaching a certain age, and permits him and the employer to agree that the employee will retire at a later stage, and it even obliges the employer to give consideration to continuing the worker's employment after retirement age, if the employee so requests (Weinberger, paras. 64-72 of the opinion of Judge S. Davidow Motola). As a rule, striving for a fair balance between competing interests of individuals is a proper purpose (cf. the Yeshiva Students case, pp. 696-700; Manco). This is also apt in the case before us.

 

            The Petitioners, for their part, asserted that even if the determination of a uniforn rule for retirement is a proper purpose, it can be achieved in other ways, and in any event, it does not justify the serious blow caused to elderly persons by obliging them to retire from work because of their age. I shall now proceed to review these arguments.

 

The Proportionality Criteria

 

41.       The infringement of the right must be proportionate. "While the Limitation Clause stands at the heart of constitutional review, the criterion of proportionality stands at the heart of the Limitation Clause" (Lahav, para. 111 of the opinion of Justice A. Procaccia). In the scope of the proportionality criteria, an examination is made of the relationship between the purpose of the Law and the means chosen by the legislature in order to achieve it (see, for example: HCJ 6133/14 Gorvitz v. Knesset, para. 54 of the opinion of Deputy President E. Rubinstein (March 26, 2015) (hereinafter: the Gorvitz case); an application for a Further Hearing was dismissed, HCJFH 2649/15 Gorvitz v. Knesset (August 2, 2015)).  The proportionality criteria express the concept that it is not sufficient for the purpose of the statute to be a proper one. It is also necessary that the means chosen to achieve that purpose to be fit and proper (the Yeshiva Students case, p. 705). The proportionality of the statute is examined by means of three subordinate criteria. The first subordinate criterion is that of the rational connection, which considers whether the statute has the power to realise the purpose for which it was enacted. The second subordinate criterion – the means of least infringement – examines whether among the means that achieve the purpose of the law, the legislature has chosen the means that infringes human rights the least. Finally, the third subordinate criterion, namely the test of proportionality "stricto sensu", requires that there should be a proper relationship between the purpose of the statute and the associated infringement of the constitutional rights.

 

            The Rational Connection Criterion

 

42.       According to the rational connection test, as aforesaid, the means chosen by the legislature must lead to the achievement of the purpose underlying the statute. This criterion does not require that the statutory means to lead to the achievement of the purpose with absolute certainty. Nevertheless, a slim, theoretical prospect does not suffice (Adala, p. 323; Aharon Barak, Proportionality in Law: Infringement of the Constitutional Right and their Limitations, 373-374 (2010) (hereinafter: Barak, Proportionality)). Does the arrangement in the Retirement Age Law have the power to achieve its purposes? In my opinion, the answer to this question is in the affirmative. A mandatory retirement arrangement is based on rational considerations, for which support can be found in case law and in the economic and legal literature. Firstly, there is a reasonable connection between the determination of an equal, uniform rule for retirement from work and the promotion of certainty in the employment market. The fixing of a retirement age enables the worker to know when he will reach the time to rest from his daily toil. Alongside this, it enables employers to plan the workforce at the workplace (see also: Zozal, para. 24 of the opinion of Judge S. Joubran; Nevo, p. 754). The Petitioners, for their part, asserted that the Law enables flexibility in regard to retirement, and the connection between mandatory retirement and promoting certainty in the economy is therefore slim. The Retirement Age Law does, indeed, provide that in certain circumstances it is possible to retire at an age that is different from the qualifying age or the mandatory retirement age (see: section 5 of the Law, which permits voluntary early retirement on certain conditions; section 3 of the Law, which permits women to retire at a younger age than men; section 10 of the Law, which permits an employee and employer to agree that the retirement age will be higher than the mandatory retirement age). Nevertheless, it cannot be inferred from the foregoing that there is no connection between mandatory retirement and the promotion of certainty, nor can it be inferred that there is no need for certainty in the scope of retirement arrangements. I would mention the the factors of certainty and manpower planning did find expression in the recommendations of Prof. Raday in the Netanyahu Commission Report,. Apart from that, the Retirement Age Law seeks to balance different interests, which naturally cannot lead to the absolute achievement of every single purpose of the Law. Consequently, even if the purpose of certainty is not completely achieved, this does not necessarily attest that there is no rational connection between it and the Law.

 

43.       In my opinion, there is also a rational connection between mandatory retirement and promoting the interests of employees in certain respects. The accepted view is that the existence of a mandatory retirement age limits the need for the employee to undergo repeated tests of his abilities and performance that might cause him pressure and uncertainty, and even lead to arguments over his competence (see and compare: Sadeh, para. 13 of the opinion of Justice E. Hayut; HCJ Recant, pp. 373-374; Weinberger, para. 60 of the opinion of Judge S. Davidow Motola). That being the case, it is not unreasonable to assume that a mandatory retirement arrangement can in promote the employee's interest in this regard. Moreover, when there is a predetermined, uniform retirement age, the ordinary practice is to wait until that age and not require the employee's early retirement, even if there is a certain decline in his competence. Consequently, mandatory retirement might reduce the number of workers who are discharged from the workplace before the normal retirement age (see: Shnit, p. 511 and the authorities cited there). In addition, there are those who argue that a mandatory retirement age is an essential, or at least an important element in the employment model termed "deferred compensation". This model is common in unionized workplaces that grant employees tenure by virtue of collective agreements, but it can also exist in an informal format without any explicit contractual arrangement (Rabin-Margalioth, p. 155). In a deferred compensation system, the employee's wage is characterized by a constant increase in its real value over the period of employment, and at a certain stage it even exceeds the employee's marginal output. Such an employment model is based on the assumption that parties to a labor relationship make investments in their relationship that decline to nothing in the case of employment termination (ibid., p. 154). Both parties – the employee and the employer – therefore wish to maintain a long-term labor relationship. A deferred-compensation employment model helps to promote that objective. As described in the article by Rabin-Margalioth:

 

            The beginning of the relationship constitutes the employee's training period, in which he is remunerated in excess of his marginal output. During the second time period (mid-career), the wage continues to rise, but the rate at which the employee's output increases is greater and the wage paid therefore falls below the worker's marginal output. This increase in output is made possible thanks to the skills that the employee has developed in the course of his work. In the third stage of the relationship (the later period), although the employee's wage continues to rise, his marginal output no longer increases and sometimes even declines (ibid., p. 154).

 

At the same time, the deferred compensation model is also based on the existence of a fixed time that is known in advance for the termination of employment, namely a time when the employee can be required to retire because of his age. Without such a time, a particular employer will find it difficult to assure his employee increased wages linked to increased seniority (ibid., p. 155). This approach – which connects mandatory retirement age with the deferred compensation model – has support in the economic literature and empirical research (Edward P. Lazear, “Why is There Mandatory Retirement?” 87 (6) Journal of Political Economy 1261 (1979); Mandatory Retirement: Why Governments Should Quit Banning It (AIMS Labour Series Commentary #3, 16.12.2008) and the authorities cited  there; Samuel Issacharoff and Erica Worth Harris, “Is Age Discrimination Really Age Discrimination?: The ADEA's Unnatural Solution,” 72 NYU L. Rev. 780, 787-790 (1997) (hereinafter: referred to as Issacharoff & Harris); Beverley Earle and Marianne DelPo Kulow, “The "Deeply Toxic" Damage Caused by the Abolition of Mandatory Retirement and its Collision with Tenure in Higher Education: A Proposal for Statutory Repair,” 24 S. Cal. Interdis. L.J. 369 (2015) (hereinafter: Earle & Kulow); Julie C. Suk, “Evolutions in Antidiscrimination Law in Europe and North America: From Antidiscrimination to Equlity: Stereotypes and the Life Cycle in the United States and Europe,” 60 Am. J. Comp. L. 75, 93 (2012) (hereinafter:  Suk); Rabin-Margalioth, pp. 150-161; Shenkar, The World Belongs to the Youth, pp. 139-141; and also see the opinion of Judge Y. Plitman in Dead Sea Works, mentioning the advantages of fixing a mandatory retirement age in collective agreements (although he was left in the minority there with respect to the result, it appears that the other members of the bench did not specifically dispute his said approach)). It cannot therefore be said that this approach, which regards mandatory retirement age as a means to promote job security, is irrational.

 

44.       As regards the purpose of promoting new employees and increasing jobs, there are no unequivocal findings that employment of the elderly leads to unemployment of the young. Consequently, it appears that if the mandatory retirement arrangement was intended for that purpose, it would have been difficult to find correspondence between it and the means taken (see also “Equality at Work: Tackling the Challenges, Global Report Under the Follow-Up to the ILO Declaration on Fundamental Principles and Rights at Work,” International Labour Conference, 96th Session 2007, Report I (B)), p. 42; Shenkar, The World Belongs to the Youth, pp. 101-104). Notwithstanding the foregoing, the need for a balance between senior employees and new ones might be necessary in certain workplaces typified by a limited number of tenured positions and a "narrow" promotion pyramid (The Netanyahu Commission Report, p. 9 of the majority opinion; LabA (National)  300205/98 Avni v. New Histadrut General Federation of Labor, para. 11 of the opinion of Judge S. Adler (June 2, 1999)). This factor is particularly salient when institutions of higher education are involved, where on the one hand, the integration of new academic staff members is important as a means for the interchange of ideas and innovation, but on the other hand, there is a limited number of positions. The Supreme Court of Canada discussed this in Mckinney:

 

            Mandatory retirement is thus intimately tied to the tenure system. It is true that many universities and colleges in the United States do not have a mandatory retirement but have maintained a tenure system. That does not affect the rationality of the policies, however, because mandatory retirement clearly supports the tenure system. Besides, such an approach, as the Court of Appeal observed, would demand an alternative means of dismissal, likely requiring competency hearings and dismissal for cause. Such an approach would be difficult and costly and constitute a demeaning affront to individual dignity.

 

            Mandatory retirement not only supports the tenure system which undergirds the specific and necessary ambience of university life. It ensures continuing faculty renewal, a necessary process to enable universities to be centres of excellence. Universities need to be on the cutting edge of new discoveries and ideas, and this requires a continuing infusion of new people. In a closed system with limited resources, this can only be achieved by departures of other people. Mandatory retirement achieves this in an orderly way that permits long-term planning both by the universities and the individual.

 

The United States Federal Court of Appeal made a statement along similar lines in Lamb v. Scripps College, 627 F.2d 1015, 1023 (1980):

 

            In light of the unique problems encountered by universities in their efforts to prevent intellectual stagnation and to assure diversity and competence in their faculties … and the likelihood that a mandatory retirement policy will remedy at least some of these problems, … California's determination that different treatment is warranted for a certain class of tenured private college professors than for other tenured private college professors and other employees is rationally based … In rejecting Lamb's equal protection challenge on that basis, we make no endorsement of mandatory retirement as a matter of social policy. We are aware of both the debilitating effect that compulsory retirement can have on an individual, and the potential loss to society in terms of human resources that may result therefrom. The promulgation of a mandatory retirement policy, however, reflects a legislature's resolution of competing interests and this is “precisely the type of clash of competing social goals that is best resolved by the legislative process. The federal courts should not second guess the wisdom or propriety of such legislative resolutions as long as they are rationally based” …

 

The Petitioners, for their part, pleaded that the effect of mandatory retirement on actual retirement age is negligible. According to them, research shows that even in countries where mandatory retirement because of age has been abolished, the retirement age has risen only slightly. Therefore, according to them, abolishing mandatory retirement because of age will, in any event, not affect new workers who wish to progress in the workplace. On the other hand, there is other research according to which the abolition of mandatory retirement has led to an increase in the age of those retiring in certain workplaces (see, for example, Earle & Kulow; Issacharoff & Harris; Orley Ashenfelter and David Card, Did the Elimination of Mandatory Retirement Affect Faculty Retirement Flows? (NBER Working Paper No. 8378) (2001), http://www.nber.org/papers/w8378; but see Till von Wachter, The End of Mandatory Retirement in the US: Effects on Retirement and Implicit Contracts, Center for Labor Economics, University of California, Berkeley (Working Paper No. 49 (2002)), http://cle.berkeley.edu/wp/wp49.pdf)). Nor is it possible to ignore the context of this petition, which we should recall, is brought by senior lecturers in institutions of higher education. According to the data presented to us by the Technion, the number of tenured posts in the institution is limited, and the acceptance of new academic staff depends,  to a certain extent, upon the retirement of senior staff members. Indeed, the weight of the intergenerational argument is not the same in all workplaces, and it is influenced by macro-economic changes. This argument should, therefore, perhaps not be given great weight. However, ultimately, it cannot be said that the connection between mandatory retirement and the promotion and integration of new employees in certain workplaces is merely theoretical.

 

45.       The Petitioners further argued that the purposes of the Law detailed above can be achieved in other ways but, as is known, the rational connection criterion does not require that the means chosen be the only one that can achieve the purpose. It suffices for there to be a reasonable possibility that mandatory retirement age promotes the Law's purposes in order to find that there is a rational connection between the Law's purposes and the means adopted by it. The choice between different possible means for achieving the purpose will now be examined in the scope of the second and third subsidiary tests (see:  the Yeshiva Students case, pp. 706-707; Barak, Proportionality, pp. 376-377).

 

The Means of Lesser Infringement Test

 

46.       The lesser-infringement test consists of two elements. The first element considers whether there is an alternative that can achieve the proper object of the Law to the same extent as the means adopted by the Law. The second element examines whether the alternative infringes constitutional rights to a lesser extent than the infringement of the Law under the Court's review (Barak, Proportionality, p. 399). In Retirement Age Law, the legislature preferred to adopt an overall, uniform criterion, rather than abolish the mandatory retirement age and arrange for individual competence tests. In principle, a sweeping arrangement might raise concern of disproportionality in the sense of the second subordinate criterion. In this respect, the statement of this Court in the Association for Civil Rights case is apt:

 

            Indeed, the employer will find it difficult to satisfy the “smallest possible harm test” if he does not have substantial reasons to show why an individual examination will prevent the attainment of the proper purpose that he wishes to achieve (p. 367 [http://versa.cardozo.yu.edu/opinions/association-civil-rights-v-minister..., para. 9, per Barak P]).

 

I also considered this, albeit in a different context, in HCJFH 203/14 Salah v. Prison Service (April 14, 2015):

 

            In general, “any sweeping arrangement is ‘suspect’ of not being the lesser infringing means because of the possibility of individually examining the individuals included in the relevant group” (the Younes case, para. 74 of the opinion of Justice Y. Danziger; see also: El Abeid, pp. 706-707; Saif, pp. 76-77 [http://versa.cardozo.yu.edu/opinions/saif-v-government-press-office]; the Airports Authority case, para. 5 of the decision of President (Emeritus) D. Beinish). On the other hand, sometimes an individual examination will be ineffective or cannot be made at all (see and compare: HCJ 7052/03 Adalah Legal Center for Arab Minority Rights in Israel v. Minister of the Interior, IsrSC 61 (2) 202, (2006) [http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-r... HCJ 466/07 MK Zahava Galon – Meretz-Yahad v. Attorney General (January 11, 2012) [http://versa.cardozo.yu.edu/opinions/gal-v-attorney-general-summary]; Younes, para. 74 of the opinion of Justice Y. Danziger and the authorities there, and the opinion of Justice I. Amit).

 

There can, indeed, be situations in which an individual examination will not achieve the purpose of the Law to the same extent (Adalah; HCJ 466/07 Galon v. Attorney General (January 11, 2012)). In view of the overall material presented to us, I believe that in the instant case the Respondents have shown substantial reasons in support of the claim that if mandatory retirement is replaced by an individual examination, that might lead to preventing the achievement of the Law's objectives. Thus, a regime of functional retirement does not meet the need of certainty to the same extent, nor answer the need to plan the workforce in the workplace. Such a model might also upset the balance between senior and new employees at particular workplaces. In addition, a move to functional retirement might impair job security in the workplace. First, because, as noted, arrangements that assure the employee tenure in the workplace (such as the "deferred compensation" model) depend to a large extent on the existence of a mandatory retirement age. Second, in the absence of a mandatory retirement age, employers might more frequently compel workers to retire before the customary retirement age. Moreover, choosing the functional retirement model might expose employees to constant examination of their competence in such a way as might create unease, stress and anxiety. As noted, these considerationsfind support in the legal and economic literature (including the current literature), and they also find expression in foreign legislation and case law. I shall refer to comparative law at greater length in the course of the third subsidiary test, but as regards the criterion of the means of lesser infringement, I believe that the legislature had adequate foundation to determine that the functional retirement model will not achieve the purposes of the Law to the same extent. In any event, it is doubtful whether that model infringes workers' rights and dignity less.

 

            The Petitioners dispute the disadvantages of the functional retirement model. According to them, functional retirement does not contradict the deferred compensation model, which can be safeguarded in other ways, like giving incentives to employees who choose to retire early. In any event, according to them, the deferred compensation model is only relevant to unionized workplaces and not to the economy as a whole. In addition, as they see it, functional retirement does not infringe dignity because it is based on substantive reasons for a person's employment termination. Consequently, they believe that the biological retirement model, as enacted in the Retirement Age Law, does not meet the second proportionality test. The Petitioners, like the Respondents, supported their arguments with various authorities and research in the spheres of economics and law. However, having regard for the factual and legal foundations detailed above, that does not suffice to find that a functional retirement regime should be preferred to biological retirement, and to intervene in the choice made by the legislature. It should be borne in mind that the vast majority of the factors for and against mandatory retirement – like the factors in support of other retirement models – are based on appraisals, various expert opinions, and forecasts. Exact science is not involved. Consequently, it is difficult to find a particular retirement model that will provide the optimum benefit of all the "players" in the labor market. It is not without reason that the public, legal and academic debates on this subject have continued in recent years, including in countries where mandatory retirement because of age has been abolished (see for example, Shenkar, pp. 37-39 and the numerous authorities there; Doron, pp. 31-56; Shnit; Ben-Israel; Rabin-Margalioth; Seldon; Earle & Kulo; Suk; Jonathan R. Kesselman, “Challenging the Economic Assumptions of Mandatory Retirement,” in Time's up!: Mandatory Retirement in Canada 161 (Terry Gillin, David Macgregor, Thomas Klassen (eds.) (2005); Lucy Vickers and Simonetta Manfredi, “Age Equality and Retirement: Squaring the Circle,” 42 Ind. Law J. 61 (2013); Orly Gerbi, “Compulsory Retirement in Israel: Is the end in Sight?” 24 No. 2 Emp. & Indus. Rel. L. 25 (2014); Malcolm Sargeant, “Distinguishing Between Justifiable Treatment and Prohibited Discrimination in Respect of Age,” 4 J.B.L. 398 (2013); Neta Nadiv and Ariel Mirelman, “Respect for the Old: An Examination of the Issue of Employment after Retirement Age,” 10 Kiriat Hamishpat 276 (2014) (hereinafter: Nadav & Mirelman) (Hebrew)). For that reason, as well, I do not believe that it is appropriate to intervene in the legislature's preferring the biological retirement model to the functional retirement model.

 

            Having said that, and although the Petitioners did not refer to it at length, it cannot be ignored that there is a broad spectrum of retirement models between a model of compulsory retirement because of age and a model of functional retirement, (see and compare: Rosenbaum, para. 18 of the opinion of President A. Barak; Weinberger, paras. 61-62 of the opinion of Judge  S. Davidow Motola). Thus, for example, a compulsory retirement age only in the framework of collective agreements, which provide job security and an adequate pension, might have been permitted (ibid.; Rabin-Margalioth). Another solution might have been permitted mandatory retirement only if the employer could justify it. Another alternative is gradual retirement, similar to the model existing at the Technion. I will not deny it: these solutions are fair and reasonable, and it might be proper to give them serious consideration. However, as earlier noted, the Petitioners did not base their arguments on these alternatives and consequently, we were not presented with support for the an argument that the alternatives are of equal value to the biological retirement model. We cannot find that they are means that can achieve the purpose of the Law to an equal extent. Moreover, when comparing the existing retirement model with other alternatives, it should be borne in mind that the existing model, according to our interpretation, requires the employer to give consideration to an employee's request to continue working even after the retirement age fixed in the Law (Weinberger; I shall refer to this at greater length below). Consequently, to some extent, even the existing arrangement exrpressed consideration for the individual particulars of the employee tn a manner that reduces the infringement of his rights.

 

            My conclusion is, therefore, that the mandatory retirement arrangement meets the second proportionality test.

 

Proportionality Stircto Sensu

 

47.       In the scope of the third subsidiary test – that of proportionality “in the narrow sense” – an examination is made of whether there is a right and proper relationship between the benefit that will arise from achieving the Law's purposes and the associated infringement of the constitutional rights. This subsidiary test is a values test, based on a balance between rights and interests (see, for example: Desta, para. 24 of my opinion). In the instant case, the parties have presented two competing philosophies. While the Respondents side with the existing retirement model, the Petitioners ask that we strike it down because it seriously infringes the rights of the elderly. Both parties have put a wide range of arguments to us, each from its own point of view. Ultimately, having weighed the infringement caused by the Law, on the one hand, and its benefit, on the other hand, I have reached the overall conclusion that there are no grounds for the Court to intervene in the legislature's choice to prefer a model of compulsory retirement because of age.

 

48.       As earlier stated, a model of compulsory retirement because of age harms individuals who can, and want to, continue working. Furthermore, as noted, research shows that there is no necessary connection between one’s age and one’s performance at work. Although certain abilities might decline with age, there are substantial differences in output within the elderly group (see, for example: Shnit, p. 511; Ben-Israel, p. 268). Against that background, compulsory retirement might cause economic and social harm and lead to serious feelings of deprivation and incompetence. Compulsory retirement because of age might also perpetuate a collective stigma in regard to the abilities and skills of the elderly (Ben-Israel, p. 273). Indeed, "… forced retirement, based on nothing except their age, sends the message that older workers are not qualified. This message hurts the core of a person’s dignity – a person who, only because of his age, is identified as being of little worth. " (Zozal, para. 26 of the opinion of Justice S. Joubran [http://versa.cardozo.yu.edu/opinions/zozal-v-israel-prison-service-commi...). It should be borne in mind that the determination of a mandatory retirement age does not merely affect the time of a person's retirement from work, but it might also have an effect on his ability to obtain other jobs after he has passed the retirement age (see, for example, the handicaps that were discussed in HCJ Kelner with regard to the acceptance to work of someone who has passed retirement age; see also: LabC (TA District) 6286/06 Matatia v. Paint Lee Ltd. (December 17, 2009); Nadav & Mirelman, p. 275). It can also be argued that compulsory retirement leads to the relinquishment of highly experienced, quality manpower that can contribute to the workplace and the economy in general. Abolishing mandatory retirement would therefore enable society to profit from the experience and skills of the elderly.

 

49.       On the other hand, there are weighty arguments in support of a model of uniform, compulsory retirement, as briefly mentioned earlier. In my opinion, among the various factors, consideration should be given to the argument that the implementation of uniform retirement reduces the need constantly to examine the employee's competence, and thereby diminishes uncertainty, tension and anxiety. A decision that an elderly worker must retire because of a decline in his performance at work might also cause serious feelings of incapacity and create an unfavourable "personal stigma" in respect of him. A statement along similar lines was made by Justice D. Beinisch in HCJ Recant:

 

            I would further add that I personally believe that there are substantial reasons that can  justify a uniform, compulsory retirement age. Since that is not the question to be decided here, I shall not express my opinion on that question in detail, but merely state that I tend to believe that, in general, a uniform retirement age is a solution that is preferable to compulsory retirement on an individual basis. Among the disadvantages of such functional retirement, which is gaining a growing number of supporters, mention may also be made of the infringement to the dignity of the ageing employee whose ability to work will be under constant scrutiny (ibid., p. 374).

 

This was also the opinion of Prof. Raday, who stated in the Netanyahu Report that abolishing the mandatory retirement age might lead to the development of personal competence tests for the elderly who wish to continue working after the usual retirement age, "tests that might demean and infringe the dignity of those elderly people" (p. 31; see also: Sadeh, para. 13 of the opinion of Justice E. Hayut). I am aware that in certain contexts it has been held that individual competence tests do not infringe the employee's dignity. This has regard for the fact that employees' performance is a relevant consideration (the Association for Civil Rights case, p. 369; HCJFH Recant, p. 355). However, even if the intensity of the affront in such a case does not amount to an infringement of human dignity, it certainly has an effect on the worker's conditions of employment and welfare. The practical difficulties involved in the development of individual competence tests cannot be ignored either. While an individual competence test might be simple and possible when work that requires physical skill is involved, that is not the case when occupations that necessitate a qualitative appraisal of work capacity are involved (see and compare: HCJ Kelner, para. B of the opinion of Justice E. Rubinstein). This is reinforced in the instant case, which involves senior members of the Technion's academic staff who enjoy academic freedom and independence in research, while any interference in their work might be perceived as the exertion of improper pressure on some of them (see and compare: Mckinney; and cf. the dissenting opinion in Dickason, above, in which the conduct of peer review was suggested as a means to evaluate the competence of a university's academic staff). The Petitioners indeed argued that frequent use is now made of individual competence tests, and they cited as an example the civil service rules that permits them. Although that possibility does exist, it is not the default. Naturally, if mandatory retirement were abolished, the use of individual competence tests would be far more prevalent, with all the implications thereof.

 

            I would incidentally note that I do not give great weight in my decision to the argument that the development of individual competence tests would place the employer under a financial burden. Although such a budgetary factor might sometimes be relevant, in the case before us it does not justify the infringement of equality. It is generally acknowledged that "human rights cost money", and as a democratic society we must be willing to bear their cost (see and compare, HCJFH Recant, p. 355; HCJ 4541/94 Miller v. Minister of Defence, IsrSC 49 (4) 94, 142 (1995) [English:  http://elyon1.court.gov.il/files_eng/94/410/045/Z01/94045410.z01.pdf]; see also: Age Concern England (C-388/07) [2009] para. 46; Fuchs, para. 52). My reasons in this regard are entirely concerned with the possible harm to workers that would be caused by widespread application of individual competence tests, and the practical difficulties of implementing them equally and fairly.

 

50.       Another relevant factor is the scope of the elderly's participation in the labor market. There is concern, as aforesaid, that the abolition of the mandatory retirement age will lead to the early dismissal of elderly employees even before reaching the accepted retirement age, and will also affect the arrangements that give job security to workers. Moreover, as mentioned above, the mandatory retirement age might increase certainty and facilitate the planning of manpower in the workplace, as Prof. Raday stated in the Netanyahu Report. Finally, as noted, a model of compulsory retirement because of age takes into account the interests of new workers in the labor market, although this factor is at most relevant to certain workplaces in which the number of posts and the possibilities of promotion are limited. Added to these overall factors is the underlying premise of the Retirement Age Law that a person who retires can continue subsisting independently after retirement by receiving some or other pension (that factor has also been raised in the case law of the European Court of Justice: Palacios de la Villa, para. 73; Rosenbladt v. Oellerking Gebäudereinigungsges GmbH (C-45/09) [2011], para. 44-47 (hereinafter: Rosenbladt); Alysia Blackham, “Tackling Age Discrimination against Older Workers: a Comparative Analysis of Laws in the United Kingdom and Finland,” 4 Cambridge J. Int'l & Comp. L. 108, 112-117 (2015)). This is even though reforms in retirement arrangements, like the transition from pension savings based on the accrual of rights ("defined benefits") to pension savings based on the accrual of money ("defined contributions"), have created different arrangements between one employee and another (as regards the pension arrangements existing in Israel, see: HCJ 2944/10 Koritsky v. National Labour Court (October 13, 2015), and the numerous authorities cited there – applications for a further hearing were dismissed: HCJFH 7730/15, HCJFH 7649/15 State of Israel - Ministry of Finance v. Koritsky (February 23, 2016); and see also Bar-Ilan; Elhatani; HCJ 6460/12 Eliav v. National Labour Court, IsrSC 60 (4) 411 (2006)).

 

51.       It emerges from the aforegoing that the model of compulsory retirement because of age has advantages and disadvantages. As opposed to this, other models, such as the functional retirement model, based on individual competence tests, are not entirely free of difficulties (see also the comprehensive review of the arguments for and against a mandatory retirement age in Sadeh, para. 13 of the opinion of Justice E. Hayut). Given this complex background, I believe that the legislature's preference of the model of compulsory retirement because of age over other models is based on reasonable considerations that give no cause for the Court's intervention. As this Court has acknowledged, in the context of a constitutional review, the legislature enjoys a "margin of proportionality", within which there are several options. The Court will intervene only when the means chosen by the legislature "departs considerably from the scope of the margin of legislative appreciation given to it and is clearly disproportionate " (Prison Privatization, p. 623 [http://versa.cardozo.yu.edu/opinions/academic-center-law-and-business-v-..., para. 46, per Beinisch P] (emphasis added – MN); Gorvitz, para. 53; AAA 4436/02 Tishim HaKadurim – Members Club Restaurant v. Haifa Municipality, IsrSC 58(3) 782, 812-813 (2004)).

 

            In my opinion, the choice of the compulsory retirement because of age model is not "clearly" disproportionate. This model was chosen after the Netanyahu Commission had deliberated and found that it is inappropriate, for the time being, to abolish mandatory retirement. A similar conclusion was also reached by earlier public commissions that had similarly considered the issue of retirement age (the Nitzan Commission (1967); the Kister Commission (1975); the Vogel Commission (1994); see the reference thereto at p. 26 of the Netanyahu Commission Report). Contrary to the Petitioners’ claim, the Netanyahu Commission considered factors for and against mandatory retirement. This clearly emerges from the recommendations of the Commission in which those factors were detailed (see, respectively: pp. 6-8 and pp. 31-32 of the Netanyahu Commission Report). The legislature's choice of the compulsory retirement because of age model reflects was an informed choice among different possibilities. In view of all the advantages and disadvantages described above, that choice does not depart from the broad margin of proportionality given to the legislature under the circumstances (see also: Weinberger, para. 14 of the opinion of Judge O. Verbner). Under these circumstances, even if some of the usual considerations justifying mandatory retirement, and their relative weight can be questioned, that does not suffice in order to find that the Law is disproportionate.

 

52.       This conclusion is supported by various data from which it emerges that the mandatory retirement age model does not actually cause substantial harm to the group of elderly workers in Israel. First, the situation of Israel is better relative to that of the countries in the OECD: the rates of employment of elderly workers in Israel are higher, the demographic make-up of Israel is younger, and the retirement age is the highest in the OECD (Ronnie Hacohen, “Employment of the Elderly in Israel: Review of the State of People over the Age of 45 in the Israeli Labour Market,” The Israeli Employment Service – Policy Research Division, Deputy Director of Planning (February 2014); see also: The Bank of Israel Report, 2015, p. 45 http://www.boi.org.il/he/NewsAndPublications/RegularPublications/DocLib3...).

 

            Moreover, according to OECD research, the average effective retirement age in Israel between 2009 and 2014 was among the highest of the countries examined in the research, including countries like the United States and Australia, where mandatory retirement because of age has been abolished by legislation (OECD, Ageing and Employment Policies – Statistics On Average Effective Age of Retirement, http://www.oecd.org/els/emp/ageingandemploymentpolicies-statisticsonaver...):

 

 

 

 

 

 

MEN

WOMEN

53.       The mandatory retirement age model also exists in various different countries and is not exceptional in that respect. Although the possibility of requiring a person to retire because of his age is not usually prescribed by general legislation, it very common in the employment market in various  contractual frameworks or in specific legislation (Shenkar, p. 25). In addition, in 2000, the European Union adopted a directive intended to lay down a general framework for employment equality (Council Directive 2000/78/EC of 27 November 2000). Inter alia, the directive prohibits discrimination against a worker because of his age (Articles 1 and 2), while establishing specific exceptions to the prohibition of age discrimination (Articles 6(1) and 6(2)):

 

            Justification of differences of treatment on grounds of age

 

            1. Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.

 

            Such differences of treatment may include, among others:

 

            (a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;

 

            (b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;

 

            (c) the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.

 

            2. Notwithstanding Article 2(2), Member States may provide that the fixing for occupational social security schemes of ages for admission or entitlement to retirement or invalidity benefits, including the fixing under those schemes of different ages for employees or groups or categories of employees, and the use, in the context of such schemes, of age criteria in actuarial calculations, does not constitute discrimination on the grounds of age, provided this does not result in discrimination on the grounds of sex.

 

Based on the principles of the said directive, the European Court of Justice has on several occasions held that a mandatory retirement age can be fixed if it is accompanied by a legitimate aim, and if the means taken to achieve it are reasonable and proportionate. Thus, the European Court has held  in a series of judgments on the subject, that legitimate aims in this connection include, for example, the access of new workers to the labor market; planning manpower in the workplace; avoiding disputes with employees with regard to their competence for work and the "negative" personal labelling of employees who have been forced to retire due to individual incapacity; and the sharing of opinions and ideas between senior and new employees, especially in institutes of higher education (see, for example: the judgments in Palacios de la Villa Georgiev; Torsten Hörnfeldt; Fuchs). As regards the proportionality of mandatory retirement, the European Court of Justice held in one of the cases that it is generally a practice that does not infringe rights more than necessary. In this context the Court stated that the compulsory retirement because of age model is common in Europe, and can serve to balance political, economic, social, demographic and budgetary considerations (Torsten Hörnfeldt, para. 28; Rosenbladt, para. 44).

 

54.       Accordingly, in various European countries there is in no legal bar to the fixing of a mandatory retirement age. In Germany, for example, the majority of State employees are required to retire between the ages of 65 and 67, while it is possible to extend their service beyond that, if consistent with the needs of the employer, and the employee agrees (Beamtenstatusgesetz Länder [Civil Servant Status Act for the Civil Servants of the Federate States], promulgated June 17, 2008 Bundesgesetzblatt [BGBl] BGBl I 2008, 1010). Similarly, a mandatory retirement age can be prescribed in an agreement between the employee and the employer, provided that the retirement age fixed is no less than the customary retirement age, and that there is justification for it, such as management of the manpower in the workplace (Sozialgesetzbuch VI: Gesetzliche Rentenversicherung [SGB VI] [Social Act VI] 19.Februar 2002 Bundesgesetzblatt [BGBl.]). Similar law also applies in France (Code du travail [French Labour Code] Art. L1237-5-1; Loi n° 84-834 du 13 Septembre 1984 relative à la limite d'âge dans la fonction publique et le secteur public [law n. 84-834 concerning the age limit of civil servants] available at legifrance.fr); in Austria (Beamten-Dienstrechtsgesetz 1979 [BDG] [Civil Servant Act 1979] Bundesgesetzblatt [BGBl.] Nr. 333/1979 §13-14); Norway (Act Relating to Working Environment, Working Hours and Employment Protection, § 13-15); Sweden (Developing Anti-Discrimination Law in Europe (European Commision, 2013), p. 36, http://ec.europa.eu/justice/discrimination/files/comparative_analysis_20...); and Switzerland (Personal- und Besoldungsgesetz des Kantons Schwyz [PG] [Employee and Remuneration Act of Canton Schwyz] June 26, 1991).

 

            It should be noted that there have been changes over the last year in some European countries. In Denmark, the mandatory retirement age in the public sector was abolished, but private employers were able to require employees to retire because of age (Ageing and Employment Policies: Denmark 2015, Working Better with Age (OECD Publishing), p. 21-22). As of January 2016, a mandatory retirement age has also been abolished in the private sector. In Ireland, a December 2015 enactment has limited the ability to fix a mandatory retirement age (Employment Equality Act 1998; Equality (Miscellaneous Provisions) Act 2015).

 

            A mandatory retirement age also applies in countries of Asia like Japan and South Korea (A Comparative Review of International Approaches to Mandatory Retirement (Research Report No. 674 (2010), https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil... (hereinafter: Comparative Review of Mandatory Retirement); http://www.agediscrimination.info/international/Pages/southkorea.aspx; see also the comprehensive comparative review in the opinion of Justice N. Hendel in Zozal).

 

55.       On the other hand, there are countries where the fixing of a mandatory retirement age has been prohibited      . In the United States, for example, compulsory retirement because of age was abolished in by law in 1986 (Age Discrimination in Employment Act, 29 USC 621-34 (1967) [ADEA]). At a later stage, it also became prohibited to require a person to retire because of his age in Britain, Canada, Australia and New Zealand (Comparative Review of Mandatory Retirement, pp. 2-3; Shenkar, pp. 24-25). Nevertheless, it should be emphasised that when the constitutionality of mandatory retirement has been considered by the American  and Canadian courts, the courts there refused to intervene (see, for example: McKinney; Massachusetts Board of Retirement v. Murgia, 427 U.S. 307 (1976)). The change in retirement policy has been made, as aforesaid, in legislation. Similarly, in those countries, too, there are exceptions to the prohibition against requiring a person to retire because of his age, and some of the exceptions are quite broad. Thus, for example, in Britain, although the uniform mandatory retirement age was abolished in 2011, an employer can still bring the employment of a worker to an end because of his age on the basis of legitimate social factors, such as intergenerational justice (giving employment possibilities to new workers), and the desire to avoid infringing the dignity of an employee against the background of arguments concerning his competence. This is all provided that the employee's obligation to retire because of his age is proportionate (Equality Act 2010 (UK), c 15, §13(1)-(2); Malcolm Sargeant and Susan Bison-Rapp, “Diverging Doctrine, Converging Outcomes: Evaluating Age Discrimination Law in the United Kingdom and the United States,” 44 Loy. U. Chi. L.J. 717 (2013); Seldon). In contrast, in the United States the exception is relatively narrow: it is permissible to compel an employee to retire only if the same is reasonably obliged by the nature of the job (Anthony Sheppard, „Mandatory Retirement: Termination at 65 is Ended, but Exceptions Linger On,” 41 U.B.C. L. Rev. 139, 176-177 (2008); Anja Wiesbrock, “Mandatory Retirement in the EU and the US: The Scope of Protection Against Age Discrimination in Employment,” 29 Int'l Comp. Lab. L. & Ind. Rel. 305 (2013)). Similarly, in Australia and New Zealand an employer can require an employee to retire if he can no longer meet the basic requirements of the job (Rachael Patterson, “The Eradication of Compulsory Retirement and Age Discrimination in the Australian Workplace: A Cause for Celebration and Concern,” 3 Elder Law Review 1 (2004)). In Canada, there are different arrangements in each province (Shenkar, pp. 31-32). In some, the law is similar to that in the United States, while in others, the exception is broader. Thus, for example, one of the provinces permits fixing a mandatory retirement age, provided that it involves a bona fide requirement that is part of a retirement or pension arrangement. According to a judgment of the Canadian Supreme Court on this issue, it is not necessary to show that mandatory retirement is an essential part of the pension arrangement (New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan, [2008] 2 S.C.R).

 

56.       A comparative examination of the retirement issue shows that the retirement model chosen by the legislature is not exceptional. In different countries there are a range of possibilities for the regulation of retirement generally, and pension age in particular. The various factors for and against mandatory retirement age are frequently debated in those countries, and the legal, social and economic controversy is not yet over. Even when significant changes to retirement arrangements have been made in other countries, those changes have, as noted, been made in legislation and not by judicial ruling. It would appear that this is also the course that should be taken in the instant case.

 

57.       In addition, even were we of the opinion that the mandatory retirement age is improper in its present format, it would be possible to conceive of various ways to rectify it. Thus, for example, it might be desirable, or even proper, to consider a further increase in the age of mandatory retirement instead of abolishing it altogether. A model of gradual retirement can also be conceived of, like the model that exists in the Technion, together with abolishing mandatory the retirement age in certain sectors, or limiting the permission to fix a mandatory retirement age to cases in which it constitutes part of an overall pension arrangement. Any solution should take into account a substantial number of factors: the needs of employees, the needs of employers; the effects on the extent of elderly employment, and more. The link between the pension qualifying age and the mandatory retirement age cannot be overlooked either. Increasing mandatory the retirement age – or abolishing it altogether – might, in the long term, lead to an increase in the qualifying age for the receipt of pension benefits (see, for example, the change that has occurred in the United States, where the qualifying age to receive social security benefits is due to rise from 65 in 2000, to 67 in 2022; Shenkar, opposite  fn. 13).

 

            A "polycentric" problem is therefore involved, in which, as a rule, the Court rarely intervenes (see and compare: HCJ 3677/09 Israel Insurance Adjusters Association v. Supervisor of Insurance and the Capital Market (December 7, 2010)). This does not relieve the Court of its duty to analyze the Retirement Age Law in light of the constitutional criteria. Nevertheless, it cannot be ignored that there is a difficulty involved in making a material change to retirement age in one fell swoop. A change of such type necessitates scrupulous preparatory work, the analysis of various factors, hearing opinions from factors in the economy, and anticipating possible broad repercussions. It should be borne in mind that the legislature itself initiated changes to retirement age after its feasibility had been studied in depth by various public commissions.

 

58.       Added to this is the fact that a collective retirement model, which lays down a predetermined, uniform retirement age, has been customary in Israel for many years. Replacing that model with another one, such as a functional retirement model that takes into account the individual particulars of every employee, might substantially affect the employment market. This is especially so if the change were made immediately, further to a judicial decision. In order to illustrate this, I would note that Bank of Israel research has shown that raising the mandatory retirement age and the qualifying age have led to immediate changes in the economy. While raising the retirement age has led to a significant increase in the number of persons employed at older ages, and to an increase in the income of high earners, it has reduced the income of those finding it difficult to integrate in the labor market at an older age (low-income employees and individuals not working), inter alia because they have been unable to plan for it in advance. The recommendation of those conducting the research was, therefore, that if another increase in retirement age is decided upon, it would be appropriate to introduce it gradually (Bank of Israel Report 2014, pp. 129-134, http://www.boi.org.il/he/NewsAndPublications/RegularPublications/Pages/D... see also: Bank of Israel Report 2010, pp. 171-175, http://www.boi.org.il/he/NewsAndPublications/RegularPublications/Doch201...). Having regard to all the aforegoing reasons, it would be inappropriate to find that the legislature exceeded the margin of proportionality granted it.

 

59.       Although not strictly necessary, I would add that the interpretation of section 4 of the Retirement Age Law also affects its constitutionality. As noted, reading sections 4 and 10 of the Retirement Age Law together led the National Labour Court to conclude in the Weinberger case that the Retirement Age Law grants an employee the right to ask his employer to permit him to continue working even after he has reached mandatory retirement age, and that right the employer is required to review the request on its merits and on an individual basis. The Labour Court further held that the same does not mean that the employer must accede to the employee's request, but it must consider it seriously, having regard to all the relevant circumstances. This approach of the Labour Court, in my opinion, gives expression to the need for flexibility in retirement and "softens" the collective model of compulsory retirement, without abolishing it completely. It adds to the balance between the needs of different "players" in the labor market, and is consistent with the retirement mechanism existing in the civil service, which makes it possible to extend the service of an employee beyond the retirement age in certain cases (section 18(a) of the Civil Service (Benefits) Law; the Civil Service (Benefits) Regulations; the provisions of sec. 82.54 of the Civil Service Regulations; Commissioner's Directive No. 8.3 of December 21, 2014; see also: The State Service Commission, Headquarters for Implementation of the Reform, Knowledge Management and Theory Department, Extension of Service Beyond Retirement Age Policy Document (December 2014), http://www.csc.gov.il/Units/Reform/RetirementDoc/index.html#1/z). In any event, the State itself has not objected to the determination that an employer must give individual consideration to a person's continued employment if he has so requested, subject to the same not obliging the employer to grant the request.

 

60.       The Labor Court further held that in considering an employee's request to continue working, the employer must weigh a broad range of factors concerning the employee's personal circumstances, systemic factors of the workplace, and the broader effects on other workers. The Labor Court stated that it was not seeking to lay down a closed list of factors, but that, in general, it would be proper to consider the number of years the employee has worked in the workplace; the extent of his entitlement to pension, and his financial and family situation; the employee's contribution to the workplace; the nature of his job, and his success in performing it. In addition, the Labor Court stated that it would be proper to consider "whether there is objective concern that his competence has declined with age (giving an opportunity for an individual competence test insofar as necessary)"; "whether there is a possibility of transferring him to another job etc."; and also, "whether there is a possibility of continuing to employ the worker in another way, like reducing his position to part time, or making him an independent consultant" (ibid., paras. 66-67). As for myself, I see no reason to detail the considerations because we are not concerned with a request that the employer must accept. In any event, presumably the list of factors will evolve or change from case to case (see also: UA (Tel Aviv District) 9172/09 Cohen v. Bank Leumi Ltd. (August 26, 2014); and see: Tamar Golan, “My Duty to Retire? Your Duty to Consider It,” The Advocate (January 2013) (Hebrew); Avinoam Cohen, "Work Without Welfare: Further to LabA (National) 209/10 Libi Weinberger v. Bar Ilan University," 5 Mivzakei He’arot Pesika – (Hamishpat Online)  7-13 (April 2013) (Hebrew)). Ultimately, it suffices that the mandatory retirement age is not legally obligatory,and that the employer must give consideration to the worker's continued employment after retirement age in order to limit the harm to the employee.

 

            As noted, the Labor Court went on to state that it might be appropriate to interpret section 4 of the Retirement Age Law as making it possible to oblige an employee to retire because of his age only when it is carried out in the scope of an "overall pension arrangement". The Labor Court refrained from defining that concept, but did intimate that arrangements that generally exist in unionized workplaces are involved. The Labour Cort did not rule on the question because, in the case before it, the appellant's retirement was in the framework of a pension arrangement of that type. Again, in the petition herein, I do not believe that we must rule on the issue. This interpretation does not, in my opinion, decide whether the Law is constitutional, and the parties have in any event not made any arguments in that regard. I would note that in this case, as well, the Petitioners' employment is regulated by a collective agreement, which entitles employees to a pension upon retirement.

 

            Consequently, having regard to all the reasons detailed above, I believe that the Law also passes the third test of proportionality.

 

Conclusion

 

61.       I have reached the conclusion that there are no grunds for our intervention in section 4 of the Retirement Age Law. Since the Retirement Age Law was enacted, the retirement age has gradually risen in accordance with the mechanisms prescribed in the Law. Even after full implementation of the Law, the public debate on this issue has not ended. From time to time, the Knesset addresses the issue, and only recently a private member’s bill was resubmitted on the matter of the mandatory retirement age. While the bill proposes prohibiting the fixing of a mandatory retirement age, it does permit the employer to require the employee to retire on reaching retirement age if there is functional unsuitability in his case (Retirement Age (Amendment – Abolition of Mandatory Retirement Age) Bill, 5776-2016). There are other debates on the qualifying age of women (Tali Heruti-Sover, “Galon and Yachimovich Propose: Abolition of Mandatory Retirement and Variable Qualifying Age for Pension,” The Marker (August 27, 2015); see also: The Retirement Age for Women (Legislative Amendments) Bill, 5726-2016). Moreover, as we were informed in the State's notice of February 9, 2015, the issue of retirement age will be referred to the executive branch in accordance with the Government Work Regulations for it to consider whether it is appropriate to review it, including by setting up a commission. And now, it has also recently been reported that the Minister of Finance has appointed a commission to consider increasing the retirement age for women, which will be responsible, inter alia, for considering the possibilities of raising retirement age and encouraging employment of the elderly (http://mof.gov.il/Releases/Pages/presha.aspx). The fact that the issue of retirement age is still on the public agenda reinforces the conclusion that the appropriate place for considering further changes thereto is legislature. Although I have found that the Law does pass constitutional review, it would appear to me that the Respondents did well in deciding to refer this issue back to the Government.

 

62.       Finally, the petition should be dismissed. No order will be made for costs.

 

 

 

Justice Y. Danziger

 

            I concur.

 

 

 

Deputy President E. Rubinstein

 

1.         I concur in the comprehensive opinion of my colleague the President. I would like to add somewhat.

 

2.         In HCJ 4487/06 Kelner v.National Labour Court (2007) I had the opportunity to say (para. 1 of my opinion), as is also appropriate here:

 

            This case raises a question that, apart from being legal, is also a social, moral and humane question that concerns Israel, like other countries, in an age in which, thank God, life expectancy has become longer, as have the abilities of people to work until an advanced tage. On the one hand, there are those who want to enable people to continue working even after the statutory retirement age, on the basis of their functional ability… On the other hand, there are those who regard longer life expectancy as an opportunity for men and women pleasantly to enjoy their free time after retirement as they wish. The Israeli legislature, in enacting the Retirement Age Law, 5764-2004, did not choose the American way, in which there is no obligatory retirement age and the criterion is functional, and it instead chose a method of fixing an age, older than was customary in the past, for mandatory retirement.

 

            Indeed, the subject of retirement age is complex and dynamic. On the one hand, the constant rise in life expectancy and quality of life supports increasing retirement age over the years, and the Petitioners before us are a living example of that. From the economic aspect of the individual as well, increased life expectancy clearly necessitates greater pension contributions, which might be achievable, inter alia, by working for more years and only utilising the pension payments at a later age. See, for example, in this regard, the Bank of Israel Report for 2010 (which was appended to the State's reply of April 4, 2013 – R/4), from which it appears that the ratio between people aged 25 to 64 and those aged 65 or more in Israel was 4.6:1 in 2005; the forecast for 2015 is 4.2:1; and the forecast for 2030 is 3.4:1 (Bank of Israel Report for 2010, p. 175 (2011)). Increased life expectancy is, of course, a blessing in itself. that the statement "sixty  for mature age" in Ethics of the Fathers (5:21) no longer represents typical old age, nor even do older ages,  and we are certainly not dealing with the age at which the Levites stopped serving in the Tabernacle (the age of 50 – Numbers 4:3); see also the determination of 60 years of age in the Torah with regard to the assessment of value (Leviticus 23:3); see also Rabbi Shlomo Yosef  Zevin, L’Ohr Hahalachah, the chapter entitled "Old Age", p. 176 et seq.; see also the comprehensive review by Judge O. Verbner in LabA (National) 209/10 Weinberger v.- Bar Ilan University (2012), para. 13, which is partly based on the review by Rabbi Dr Yaron Unger, Adv. and Prof. Yuval Sinai, “Compulsory Retirement Because of Age in Jewish Law,” The Centre for Practical Jewish Law  (CPJL), 2012 (Hebrew); and see the many authorities cited there. Their review, based on Jewish sources, speaks in praise of the elderly and the duty to exalt their dignity. It further speaks in praise of work, and as regards the Levites, for whom a mandatory retirement age (appropriate to life expectancy then) was fixed as aforesaid, the Jewish law authorities have qualified the rule so that it is not absolute (Maimonides, Laws concerning Temple Vessels 3:8). See also Gordon Ashton, Caroline Bielanska, Elderly People and the Law (2nd ed., 2014), pp. 120-121, as regards equal treatment of pensioners and p. 123 with regard to part-time employment during retirement.

 

3.         In my opinion, insofar as the ratio of the elderly as aforesaid continues to decline, and from the data it appears that the trend is growing, an increase in the retirement age will be a necessity. This derives from the fact that elderly people who are still full of vigour will want to continue working in view of life expectancy and also, and perhaps no less, because of the State's limited ability – which is more and more worrying – to provide real social security to an increasing number of people who are not included in the labor market. This is also consistent with section 1 of the Retirement Age Law, 5764-2004 (hereinafter: the Law), which states that "the purpose of this Law is to establish standard rules with regard to retirement age, including raising it gradually …" (emphasis added – ER).

 

            In Kelner, I added (para. 10):

 

            Indeed, the world of today sanctifies youth, unlike the ancient world that perceived old age as  as a source of experience and wisdom. The media feeds the public success stories of young people, who do of course bring with them charm, freshness and energy; but the the elderly have not reached the end of the road, not only because of longer life expectancy but also because of the ability and need to utilize the knowlege and experience that they have acquired. In the world beyond the “regular” work frameworks there are those who continue to contribute to a great age – in politics, science, the humanities, and more. Take a close look at the Jewish ethos in which old age is perceived as corresponding to wisdom – “with the ancient is wisdom; and in length of days understanding”' (Job 12:12). In the Biblical world, the old were the leaders and in fact, also the judges: “your elders and judges shall go out” (Deuteronomy 21:2). Of the verse “stand up in the presence of the elderly, and show respect for the aged” (Leviticus 19:32), the Sages said (Babylonian Talmud, Kidushin 32:2) “not old but wise, as it is said (Numbers 11:16) 'Gather before me seventy men who are recognized as elders and leaders of Israel' (ultimately the Sanhedrin or Great Court – ER). Rabbi Yossi the Galilean says, not an old man but one who has acquired wisdom, as it is said (according to wisdom,  the wise wise person in the Book of Proverbs, for example – ER) “the Lord possessed me in the beginning of his way' (Proverbs 8:22)”. See also the entry “wise” in the Talmudic Encyclopaedia, vol. 15, 51 (Hebrew). In the Mishna, old age is 60 ("sixty for mature age" (Ethics of the Fathers 8:21), and at the time this was based on the general life expectancy. Nevertheless, there has been increasing awareness of “do not cast me off in the time of old age; forsake me not when my strength is spent” (Psalms 71:9).

 

4.         In view of all this, I believe that it would be best for the relevant authorities to review the concrete retirement age every decade, at most, and whether the changing circumstances are such as to require increasing it. This is connected not only with longer life expectancy, but also social security. I shall refer to this again below. In this respect, leadership must at all times look to the future, beyond the period of its own office. Let me cite an example: in the second half of the 1980s, when I was Cabinet Secretary in the National Unity Government, after in-depth discussions with pension experts and actuaries in the Directors General Forum of the Government Ministries, it was suggested to the relevant ministers that they consider the matter of the pension funds, on the assumption that a crisis concerning lack of coverage would erupt in or about the year 2000. The response was personal. Action thereafter wnet on for very many years in various commissions and government decisions.

 

5.         On the other hand, I believe that the factor of intergenerational fairness, namely the effect of postponing retirement together with the integration of a young labor force in the economy, has been given very significant weight in determining retirement age. Indeed, as the State has noted, this factor might carry less weight at the macro level. That is to say that there are no data indicating that in a satisfactory economy that is growing, raising retirement age will necessarily impair the ability of young people to integrate in the labor market (Report of the Public Commission on Retirement Age, p. 7 (5760-2000)). However it does have effects at the micro level, and the academic institutions from which the Petitioners come are an example. Clearly, given a limited budget, as the age of the lecturers and researchers in the Israeli academic institutions increases, the ability of young lecturers and researchers to integrate in those places, especially as tenured lecturers and researchers,  the much longed-for tenured posts in those institutions, will constantly diminish. Hence, although there can be no question that the Law does infringe a certain element of the Petitioners' right of equality, it is done for a proper purpose, which is to increase the ability of the younger generation to integrate in the employment market. See the statement by President Adler in an earlier case:

 

            I would add that in my opinion, fixing a chronological retirement age does indeed infringe constitutional rights like freedom of occupation and human dignity but it is done for a proper purpose. And what is that proper purpose? Providing a fair opportunity to new participants in the labor market. As such there is a proper balance between the constitutional rights of senior employees and the rights of younger workers from an overall societal point of view (LabA (National) 107/05 Kelner v. Commissioner of the Civil Service, para. 7 (2006); see also the opinion of President Adler in LabA (National) 1313/04 Asa - El v. Al Israel Airlines Ltd, (2006)).

 

6.         And finally – with genuine sympathy for the Petitioners and the worthy self-fulfilment for which they strive – it should be borne in mind that the Petitioners are not merely seeking an increase in the mandatory retirement age, but they are asking that we adjudicate that the very determination of a mandatory retirement age is unconstitutional and, in fact, to require the State to prescribe an alternative model to that existing in the Law, for example a model of functional retirement. We must make our ruling having regard to: the fact that the course that the Israeli legislature has chosen in this connection is no different from that of many legal systems around the world; the considerable disadvantages involved in the prevailing systems, inter alia, in the United States and Britain; the proper purpose underlying the Law, as I mentioned above; and the fact that it is difficult to say that the Law's infringement of the Petitioners' right to equality is so disproportionate as to necessitate the exceptional intervention of this Court, all as stated in the President's opinion. Having regard for all that, the obstacle that the Petitioners had to overcome in order to prove their case was significant, and I do not believe that they were able to do so. However, common sense seeks a balance, and among other things, it is proper and even essential to increase the retirement age from time to time, and also to consider the nature and quality of pension arrangements, the future of which appears to be cause for concern.

 

7.         On reading the opinion of Justice Hendel, I would add that he rightly considered the feelings of someone who has retired from work and feels detached and lacking in dignity. To a certain extent, it can be compared to the feelings of someone who is unemployed, although a retiree knows that he has reached the age at which many good people stop actively working, while as regards the unemployed person who is in mid-life, his lack of work not only affronts his dignity and self-esteem but it also, of course, affects his livelihood with all the implications thereof. There is no need to expound on the importance of work to many people – "When good things increase, those who consume them increase" (Ecclesiastes 5:11), and in the words of the poet H.N. Bialik – "Whom should we thank, whom should we bless?  Labor and work! ". The various plans in the different sectors of the population in respect of old age and leisure, the numerous frameworks for that in the world of culture, Torah and academia, the establishment of a government ministry for the affairs of retirees (now the Ministry of Social Equality), all reflect awareness that longer life expectancy necessitates arrangements for an era in which many people live longer and are also in satisfactory physical and mental condition. Programs must be arranged for them, together with employment for those desirous, either for financial reasons or to occupy their leisure time. Incidentally, in the academic world, after retirement many continue to teach more or less voluntarily and in consideration receive a certain work environment which, perhaps, has no real financial remuneration, but does involve professional and human continuity, and there are voluntary frameworks in other spheres as well.  Therefore, it is very important to uphold human dignity in its simple sense: "The School of Rabbi Ishmael taught: 'And you shall choose life' (Deuteronomy 30:19) – this means a skill," i.e., a profession (Jerusalem Talmud, Peah 1:1); "'so that the Lord your God will bless you' (Deuteronomy 14:29) – you might think that this means even if you sit idle, therefore Scripture states 'in all the work of your hands that you will do' (ibid.) – if a person works, he is blessed, and if not, he is not blessed" (Tanna Devei Eliyahu, 12; Yalkut Shimoni on Psalm 23; cited in H.N. Bialik and Y.H. Ravnitzky, Sefer HaAgadah 1903); "Rav Sheshet said, work is great, because it warms the person who does it" (Babylonian Talmud, Gittin 67b). All of these, ultimately, are human dignity, and see the entry "Human dignity" in the Talmudic Encyclopedia 26 (1907) (Hebrew); see also N. Rakover, Human Dignity is Great (1998) 137. Work therefore leads to life and blessing, and giving expression to it in human life, insofar as it is possible, can only be good. This is true of work, and it is also true of rewarding activity during retirement.

 

 

8.         For the reasons stated above, as aforesaid, I concur in the opinion of my colleague the President. However, I must propose that the matter be reviewed periodically with a view to increasing retirement age in a fair and balanced way. I was therefore pleased to read recently that the Government decided, in June 2015, to charge government agencies with formulating a trial scheme in the scope of the Civil Service for an employment track specifically for senior citizens after retirement age (the review by Mr Kobi Bleich, Senior Deputy Director General for Administration and Projects in the Ministry of Social Equality, State Service Commission Information Booklet, issue 39 (April 2016)). That list mentions that average life expectancy in Israel is currently 80 for men and 84 for women, and see also the survey there by Tzachi Kelner, the Director of the Israeli Retirement Centre. On March 28, 2016 the Minister of Finance also appointed a commission to review retirement age, which was charged with "studying and formulating recommendations in respect of the age at which a woman born in or after 1955 is entitled to retire because of her age… Moreover, the commission was charged with reviewing the implementation of a mechanism for raising retirement age in consequence of longer life expectancy, and also reviewing the application of supportive and supplementary tools for increasing retirement age and encouraging employment of the elderly" (from an approach to the public by the Commission for the Review of Retirement Age, Calcalist, Nissan 9, 5776 (April 17, 2016), emphasis added).

 

 

 

Justice U. Vogelman

 

            I concur in the comprehensive opinion of my colleague President M. Naor and with the comments of my colleague Deputy President E. Rubinstein.

 

            In my view, as well, the provision of the statute that is at the center of the current debate passes constitutional review, based on the analysis detailed in the opinion of President M. Naor. I would emphasize that, in my opinion, the ruling that the employer must give consideration to the worker's continued employment after retirement age – in order to limit the harm to the employee – is an element of considerable weight when examining the balances in the framework of the third subsidiary test of proportionality.

 

            As my colleagues make clear, sealing the legal debate at the present point in time does not put an end to the public debate, or to continued deliberation by the executive branch. In that context, the latter will also consider whether the time is ripe to review the issue.

 

            Subject to these remarks, I concur, as stated, in the opinion of President M. Naor.

 

 

 

Justice D. Barak-Erez

 

1.         I concur with my colleague President M. Naor that the petition should be dismissed. The statutory arrangement that makes it possible to require an employee to retire on attaining the age defined as retirement age provokes dilemmas and questions that will presumably remain on the public agenda. That is only proper. However, it cannot be said that it infringes rights so disproportionately as to justify the intervention of this Court in the scope of a constitutional review of a statute.

 

The Point of Departure: A Reasoned Infringement of Equality

 

2.         Let me first say that, like the President, I also believe that an arrangement that prescribes that a person can be compelled to retire merely because he has reached a particular age does involve an infringement of equality. A distinction based on mere age is one that is founded on a generalization that reflects a social perception in respect of older people who have passed a certain age, as opposed to a distinction based on an evaluation of the relevant individual's abilities. In that respect, I also believe that the Petitioners are right that the determination of a mandatory retirement age is not problem free. However, ultimately, I believe that this infringement of equality is, in the instant case, based on good reasons and passes the tests of constitutional review.

 

3.         In fact, the State presented three central reasons to justify the present arrangement – the fact that the determination of a mandatory retirement age is in the interest of employees generally; the contribution of the arrangement as regards "intergenerational fairness"; and its contribution to the planning and renewal of the workplace as regards the employer's interests. All these are reasons with fairness and logic on their side, that have also been recognized as justifying retirement arrangements in the precedents of courts elsewhere in the world, as the President showed in her opinion. Moreover, they are not based on general assumptions with regard to the incapacity of elderly people, that is to say that they are not tainted by ageism. Nevertheless, I would emphasise that I personally believe that the most important of the said reasons, which for me tips the scales, is the argument concerning the contribution of retirement age to the rights of retirees themselves. Although the reasons of "intergenerational fairness" and the ability to plan the workplace are important, these are interests, the protection of which when they infringe the right of equality, raises questions that I do not believe arise in respect to the argument concerning protecting the rights of workers themselves. This is therefore not a case of infringing rights merely for the promotion of important public interests, but it is a case in which there is a clash of two clear aspects of the protection of the rights of elderly workers, and even of different groups of elderly workers.

 

4.         Several advantages of the fixing of a mandatory retirement age can be indicated from the perspective of the rights of workers themselves. First, as the State rightly argued, the mandatory retirement age creates the effect of a "protective shelter" over the heads of elderly employees, in the sense that it creates a presumption against terminating their employment before they reach retirement age, especially as they approach that age. Second, the existence of a retirement age "on the horizon" substantially weakens the incentive of employers to initiate general competence tests for employees, which might be significantly strengthened in circumstances in which the decision to terminate employment necessitates an indication of functional difficulty or handicap. Indeed, even now there are such tests in certain places, but they are not the rule. It is important to note that such tests, despite perhaps serving legitimate interests of the employer, might cast a shadow of unease over the workplace, and in any event "color" any retirement decision with incompetence. Despite the Petitioners' arguments, currently an employee who retires from work does so without his leaving work representing any negative judgment about his ability to continue working. That is essentially different from retirement based on a determination – difficult and painful for the relevant employee, especially having regard to the fact that it is given public expression – that there is a decline in his function and competence. Third, and no less important, without acknowledging the legitimacy of mandatory retirement age, the willingness to grant tenure to employees, or even to reach partial job security arrangements will be weakened to a great extent. The ability to acquire tenure is of great importance to many employees since it enables them to plan in advance for the long-term, and contributes to their emotional welfare. The abolition of mandatory the retirement age might, therefore, affect job security, which is also an interest that is dear to many workers.

 

The Limits of Judicial Review in Areas that Necessitate Complex Legislative Arrangement

 

5.         The Petitioners argued with great self-assurance that the alternative based on the employee's functional testing is preferable to the determination of a standard retirement age. However, as explained above, there are also substantial reasons that weigh against this. The question of which is the preferable retirement arrangement – that based on a retirement age norm or one based on the employee's functional testing – is one that remains the subject of controversy, and there are arguments both ways. As for myself, I believe that the advantages of the arrangement that sets a mandatory retirement age are preferable for the reasons that have been detailed, as I shall explain below. However, it is important first to say that we do not need to decide which is the desirable arrangement. That question is first and foremost a matter for the legislature, which should deliberate and rule on policy questions that are characterized by being "polycentric", as the State has rightly said (see: HCJ 7721/96 Israel Insurance Adjusters Association v. Supervisor of Insurance, IsrSC 55 (3) 625, 645 (2001). For the source of that expression, see: Lon L. Fuller, “The Forms and Limits of Adjudication,” 92 Harv. L. Rev. 353, 394-404 (1978)). The question that has been put to us is one of the "second order" – whether prevailing legislative policy involves a disproportionate infringement of rights to an extent that necessitates judicial intervention. In my opinion, too, the answer to that question is in the negative.

 

6.         As the President stated, the comparative examples that have been presented to us concerning the erosion of the mandatory retirement age regime in other countries in fact support the decision to dismiss the petition. From those examples, it appears that changes affecting the mandatory retirement age arrangement have mainly been made by legislation. In the major examples cited , the courts found it inappropriate to invalidate mandatory retirement age arrangements, and the changes in that area have been made through the legislative process, on the basis of social debate and persuasion in the public arena (in the United States, the claim of discrimination by virtue of the determination of retirement age was dismissed in Massachusetts Board of Retirement v. Murgia, 427 U.S. 307 (1976), and the change in the legal situation was made in a 1986 legislative amendment to the Age Discrimination in Employment Act; in Canada, the argument that the determination of retirement age does not meet the constitutional standard for the protection of rights in accordance with the Charter was dismissed in McKinney v University of Guelph [1990] 3 S.C.R. 229, and then a 2012 amendment to the Canadian Human Rights Act abolished the determination of retirement age as deviating from the prohibition of age discrimination; in Britain, the general recognition of mandatory retirement age, called the "default retirement age", was abolished in 2011 in the scope of the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 (hereinafter: the 2011 Regulations), which revised the general law on equality (the Equality Act 2010) so as also to apply to retirement arrangements.

 

7.         Regulating the issue of retirement age in legislation makes it possible to do so comprehensively, with reference to associated economic and employment aspects as well, including insurance and pension factors. Thus, for example, in Britain in the scope of the 2011 Regulations, alongside the repeal of compulsory retirement because of age, it was established that employers can make different insurance arrangements for employees who have reached state pension age or have passed the age of 65, whichever is the higher. More generally, the relevant legislation in various different countries leaves room for exceptions, a matter that is also suitable for legislative arrangement and necessitates the laying of a broader foundation than has been laid before us.

 

8.         To this it can one may add that – unlike what is implied by the petition – the abolition of mandatory retirement age does not necessarily also mean individual competency examination of every single employee in all workplaces. Even in countries where mandatory retirement age is not customary, examples can be found of the determination by various employers of arrangements that do include an element of mandatory retirement age, and it has also been held that there is no bar to doing so – so long as there is good justification (or in our constitutional language, when the same is done for proper purposes and insofar as the means prescribed are proportionate). Thus, for example in Seldon v Clarkson Wright and Jakes (A Partnership) [2012] UKSC 16, the British Supreme Court held that the determination of retirement arrangements for the partners of the particular law firm had been done for a proper purpose (in the circumstances, the proportionality of the arrangements that were prescribed was left for later litigation). Indeed, that judgment revolved around events that occurred at a time when the British legislation recognized mandatory retirement age, but the principles that were delineated in it are also regarded as having guiding value in the review of retirement arrangements made in the context of the new statutory position.

 

The Possible Effects of abolishing the Retirement Age on Employees' Rights in View of the Diversity of the Labor Market

 

9.         As stated, the most persuasive reason, in my view, for finding that the arrangement involved in the petition passes the proportionality tests is the protection of workers themselves. In this connection, the Petitioners made two main arguments. First, they asserted that the abolition of the mandatory retirement age is not likely to affect those workers who, in any event, do not benefit from tenure, the proportion of whom in the current labour market is significant. Secondly, they argued that, in any event, even if the arrangement of mandatory retirement age is beneficial for some workers, it is not of benefit to the Petitioners, and the infringement of their rights for the sake of other workers cannot be justified. As for myself, I believe that neither part of this argument is persuasive, as explained below.

 

10.       First, I believe that although the abolition of a statutory retirement age is first of all likely to have an effect of eroding existing tenure arrangements (and is therefore problematic for those who are employed where tenure arrangements are customary), there is basis to believe that it might also affect employees in workplaces where there are no tenure arrangements at all. The reason for this is the concern, which is of course regrettable, that various employers "will seek a reason" (whether or not they formally need to indicate such a reason) to terminate the employment of relatively old employees in circumstances where there is no foreseen date for the end of the contract of employment. In that sense, it appears that a mandatory retirement age helps workers who do not enjoy tenure. In this connection, it should also be noted that the overall interests of those workers have not been presented to us, which also makes it difficult to accept the argument that the harm to workers who do not enjoy tenure is limited.

 

11.       Secondly, one cannot accept the assertion that the arrangement of mandatory retirement age has not been of benefit to the Petitioners. The question whether the arrangement of mandatory retirement age has been of benefit to the Petitioners themselves cannot be asked after the event ("ex post"), at the present point in time when they want to continue working, knowing their health and employment situation, after they have "enjoyed" the advantages of the arrangement. That question should be considered looking to the future ("ex ante") – would the Petitioners and others like them be rewarded by having entered a labor market in which there were tenure arrangements and in which they have not been subjected until retirement age to functional examinations that affect their employment stability (as opposed to evaluations that affect promotion)? The contribution of mandatory retirement age should, therefore, be examined when the parties to the discussion look at the question through "the veil of ignorance", when they do not know whether they have been successful employees, enjoying good health and sheltering under comfortable tenure arrangements. The question is what position could have been taken in view of the possibility that they were employed in less comfortable work, and perhaps their health or performance was impaired to some extent before reaching the age at which they had to retire in accordance with the arrangements in their workplace. One way or the other, I believe that specifically in the context of general labour arrangements, it is right and proper to consider their contribution to workers with a broad view that goes beyond the bounds of the autonomous wishes of the specific employee.

 

12.       In fact, opinions have been expressed in the legal literature that recognize the legitimacy of arrangements that include an element of mandatory retirement age when those involved are employees who receive "consideration" for that element in their terms of employment, in the form of tenure and adequate pension arrangements (see Sharon Rabin-Margalioth, “Age Discrimination in Israel: A Power Game in the Labor Market,”,” 32 Mishpatim 131, 174 (2002) (hereinafter: Rabin-Margalioth). For an approach that supports the same but with more limitations, like making it possible for employees who are so desirous "to leave" the collective arrangement, see for example: Pnina Alon-Shenkar, “The World Belongs to the Youth: On Discrimination against Senior Workers and Mandatory Retirement,” in Liber Amicorum Dalia Dorner Book81, 139-141 (Dorit Beinisch et al. (eds.) 2009) (Hebrew)). The aspect of collectively arranging retirement age was also emphasised in a case of the European Court of Justice (see: Palacios de la Villa v. Cortefiel Servicios SA, C-411/05 [2007] ECR I-8531).

 

13.       Under the circumstances, in my opinion there is also some importance to the fact that the Petitioners only challenged the mandatory retirement age arrangement after they reached retirement age, despite the fact that, prima facie, they could have put it to the test in the past, while they actually enjoyed the tenure arrangements (and it should be reiterated that the Law in its present form – the Retirement Age Law, 5754-2004 – was enacted several years before the Petitioners reached retirement age). In other words, the petition was brought by those who for years enjoyed strong tenure arrangements, and are now seeking to avoid paying the bill (see: Rabin-Margalioth, p. 159).

 

14.       To all the foregoing we should add reference to the characteristics of the Petitioners' workplaces – institutes of higher education. Although this petition is being heard as a general one against the principle of mandatory retirement age, it cannot be ignored that the case of the Petitioners– university professors – also raises other difficulties concerning the importance of protecting the academic freedom of the faculty members of those institutions. The tenure arrangements existing at the universities protect not only the welfare of the academic faculty, but especially their freedom so that they can conduct research and fearlessly express their professional opinions. Abolishing retirement age in a way that might erode the tenure arrangements would yield a less protected academic environment, and might also lead to the infringement of another important public interest. In fact, this point also illustrates that the determination of a mandatory retirement age involves other arrangements, such that its abolition by the Court might have repercussions that have not been made clear to us.

 

15.       Also of importance is the fact that the Petitioners' workplaces are specifically public institutions, as opposed to workplaces that clearly belong to the private sector. In fact, in some of the countries were the mandatory retirement age has been abolished, the identity of the employer (as "public" or "private") is of significance as regards evaluating the justification for determining a mandatory retirement age, which is regarded as more acceptable in the public arena. It should be noted that the private member’s bills that have been submitted on this subject (see for example: The Retirement Age (Amendment – Abolition of Mandatory Retirement Age) Bill, 5773-2003) include the possibility of authorizing the Minister of the Economy to exclude "certain spheres of work".

 

16.       Hence, the Petitioners fall within the scope of the cases that are regarded as less "difficult" as regards the constitutional questions that the determination of a mandatory retirement age raises, even according to those who believe that mandatory retirement age arrangements do raise difficulties.

 

Other Aspects of the Legal and Public Debate Looking to the Future

 

17.       A distinction should, of course, be drawn between the principle of mandatory retirement age and the aspects that concern its implementation. The petition did not address the question of the proper retirement age having regard for longer life expectancy. It might be right to consider increasing retirement age, as my colleague, Deputy President E. Rubinstein mentioned. However, such a decision would concern the implementation of the principle, as opposed to the principle itself, against which the petition is aimed. It is important to emphasize that the Petitioners did not focus on the specific retirement age prescribed in the Law, and that has therefore not been examined by us.

 

18.       Furthermore, as the President has emphasized, recognizing the constitutionality of the retirement age does not relieve the employer of his obligation to consider the possibility of continuing the employment of a worker who seeks not to retire. This takes account of numerous factors, including the ability of the employee, how essential he is to the workplace, and even the extent of the pension rights accumulated by him so that he can live with dignity after retiring from work. The discussion appropriate to these questions is therefore a contextual one in the circumstances of each individual case, as distinct from a general discussion like that which conducted before us.

 

19.       Incidentally, I would raise another point for consideration, which does not tip the scales against the petition, but should be examined as part of the repercussions of any future retirement age reform. Formally, the question before us revolved, as noted, only around the constitutionality of the determination of a mandatory retirement age, as opposed to recognizing the institution of retirement age, namely permitting the worker to retire on attaining a certain age, an option that not a few employees would like. From the point of view of many employees in the economy, the possibility of retiring at a certain age is a blessing; an aspiration for which they long after years of wearying work – physically, emotionally or mentally. In fact, historically, the determination of a retirement age is regarded as a social innovation that only began at the end of the 19th century, but mainly in the 20th century. Before then, it was a benefit to which workers could not aspire. They had to work "until death" unless they had the means to enjoy retirement, which was considered a luxury. The determination of a retirement age therefore went hand-in-hand with the development of welfare and pension schemes that were intended to ensure a source for the subsistence of workers on reaching retirement age. Prima facie, this is a separate issue. The Petitioners say: those who want to retire, should retire and those who want to carry on working, should work. From the purely analytical perspective, that is correct. However, having regard to the broader social context, it is only partially correct. If retirement age could be chosen by the worker, there might be an erosion in the development of pension arrangements available to workers upon their retirement. Such a state of affairs would sharpen the view of retirement as a privilege that might not be appropriate if the employee and the economy "cannot afford" it. Alongside the concern of "being cast aside in old age", there is therefore concern for workers being thrown back into the world without an adequately protected retirement, with all the related implications.

 

Conclusion

 

20.       In concluding, let us go on to mention that discrimination for reasons of age is illegitimate. Moreover, ageism is an ugly social phenomenon that should be opposed. Our judgment in this case is not based on an assumption as to the incompetence of workers who have reached retirement age, and needless to say that the same also goes for the Petitioners themselves. Nevertheless, the arrangement of mandatory retirement age is a complex one that also involves the protection of rights, where that protection is viewed in its broad sense, going beyond the protection of the individual employee's freedom to decide.

 

21.       I therefore believe that the petition should be dismissed, although the matter raised by it should continue to be examined in the public arena.

 

 

 

Justice E. Hayut

 

            I concur in the comprehensive opinion of my colleague President M. Naor and the conclusion reached by her that the model of compulsory retirement because of age established in section 4 of the Retirement Age Law, 5764-2004 (hereinafter: the Retirement Age Law), and its preference to other models, like that of functional retirement, which the Petitioners support, is not unconstitutional to an extent that justifies the repeal of the section.

 

1.         As my colleague the President stated, each of these models has advantages and disadvantages. They have been set out at length in her opinion, and I have therefore not considered it appropriate to repeat them (see also in this regard, HCJ 7957/07 Sadeh v. \Minister of Internal Security, para. 13 (September 2, 2010)). Indeed, making an employee retire merely because his or her age has been fixed as the retirement age is one of the most injurious phenomena of age discrimination (see: HCJ 1268/09 Zozal v. Israel Prison Service Commissioner, para. 15 (August 27, 2012) [[English: http://versa.cardozo.yu.edu/opinions/zozal-v-israel-prison-service-commi...  (hereinafter referred to as "Zozal")). However, as my colleague the President showed, the regime of compulsory retirement because of age passes the tests of the Limitation Clause in section 8 of Basic Law: Human Dignity and Liberty and is therefore not constitutionally invalid. Among the grounds justifying the present arrangement, in my opinion the one that ought to be emphasied is that concerning the aspects that are beneficial to workers generally, and in that I am in full agreementwith my colleague Justice D. Barak-Erez. The legislature's provision in section 4 of the Retirement Age Law that 67 is the mandatory retirement age for men and women, implies a statement that, in general, the employer's terminating the labor relationship before the employee has reached that age is illegitimate. The legislature thereby set a clear criterion that helps eradicate phenomena of discriminating against workers because of their age before they reach mandatory retirement age, while transferring the discretion concerning the time of the employee's retirement to the employer on the basis of competence and function tests does not set such a clear criterion and might legitimate employers' requiring employees to retire even before they have reached the age of 67. My colleague the President therefore rightly said that "mandatory retirement might reduce the number of workers who are discharged from the workplace before the normal retirement age" (para. 43 of her opinion). This conclusion is all the more important in view of the fact that the majority of workers in the economy are employed under personal contracts, and not protected by unions and collective agreements (Mundlak G, Saporta I, Haberfeld Y, Cohen Y, “Union Density in Israel 1995-2010: The Hybridization of Industrial Relations,” 52(1) Ind Relat. (Berkeley) 78 (2013)). The labor relationship between an employer and an employee who is not unionized leaves the worker without collective protection in the event of unlawful dismissal. In that situation, the general law of contracts, as well as shield legislation come to the aid of the employee (Guy Mundlak,The      Rule    on        Dismissals: Default           and      Mandatory     Rules, and      Some  Interim Options,”  23 Iyunei Mishpat 819, 822 (1999)). In that sense, section 4 of the Retirement Age Law can be regarded as one of those  statutory shield provisions that regulate clear criteria with regard to the employer's ability to dismiss an employee (as regards the shield provisions of the Retirement Age Law, see also section 10 of the Law, and as to the duty owed by the employer to give substantive consideration to the employee's request to remain at work after retirement age, see: LabA (National) 209/10 Weinberger v. Bar Ilan University (December 6, 2012)).

 

2.         The petition before us has again placed on the legal agenda the fact that the labor market in Israel, and in fact the whole Western world, is undergoing far-reaching changes in view of the increase in life expectancy, while maintaining levels of competence and function at work at more advanced ages than in the past. These changes have significant economic and social implications, and necessitate rethinking, inter alia, with regard to retirement age, and perhaps also with regard to the appropriate model to be adopted in that respect. In any event, the trend apparent in Israeli law is a clear one of increasing retirement age for both men and women (Zozal, para. 25), and the Israeli legislature may continue to adapt the relevant legislation to that trend.

 

 

 

Justice N. Hendel

 

          I concur with the result reached by my colleague President M. Naor, according to which the petition to strike down section 4 of the Retirement Age Law, 5764-2004 (hereinafter: the Retirement Law), requiring an employee to retire at the age of 67, because of its unconstitutionality, should be dismissed. Nevertheless, there are nuances that distinguish us. In my opinion, they are of importance especially in regard to the future – and old age has a future – and I have therefore deemed fit to present them.

 

Discrimination on the Basis of Age – Innovation, Uniqueness and Gravity of the Infringement

 

1.         The prohibition of discrimination – or as formulated on the positive side of the coin, the protection of equality – is a developing doctrine. The canopy of equality is expanding. Consequently, distinctions between different groups, based on some or other characteristics, that used to be socially or legally acceptable without question or a second thought, are no longer such at present. One of the examples of this is age as a basis for discrimination in the labor market.

 

            Historical, economic, social and legal changes have led to the status of the "working elder" experiencing many changes over the years. Prof. Ruth BenIsrael, in her article (Ruth Ben-Israel, “Retirement Age in light of the Principle of Equality: Biological or Functional Retirement”, 43 Hapraklit 251, 253-257 (5757)) described the position in the following way: in the distant past, the status of the elder was lofty and exalted and he was regarded as having power, status and influence. It can further be said that in those years the elderly were distinguished from the rest of the population, but "discrimination for the better" was involved. In the opinion of the learned author, in the 18th century there was a sharp decline in the social image of the old, who came to be identified with inaction and dependence upon others. This, of course, also affected his position in the labor market. The trend intensified in the 20th century, during the period that Prof. Ben-Israel calls "the cult of youth". The metamorphosis in the labor market – like the disappearance of certain professions, and new, mainly technological, professions that have replaced them – has necessitated constant change that has mainly affected the elderly who are employed in the waning professions, and displaced them from the market. These days, and especially in very recent years, the pendulum has been swinging, slowly but surely, back to the other side. That is to say that opinions are being aired and research conducted that seek to emphasize the value – to workers and society in general – involved in the employment of older workers, inter alia, in view of the experience and professionalism that they have accumulated.

 

2.         The foregoing description is, of course, a very brief summary of very significant moves and shifts. Nevertheless, it would appear that it suffices to illustrate what I began with: reference to discrimination (or equality) is dynamic and so too – and perhaps especially – in respect of age. This is true in at least two senses: first, the index of social sensitivity. In recent years there has been far greater sensitivity to discrimination on account of age and its legal and constitutional implications in the labor market, as well. As Fredman stated, the idea that differentiation based on age might be unconstitutional is a "new phenomenon", driven by the ageing of the population and the declining birthrate (S. Fredman, Discrimination Law, 101-102 (2002)). The increasing prominence of individual rights in recent decades, and the importance attributed to them in liberal countries have, of course, also contributed to the shift.

 

            Second, the extent of the infringement – age discrimination in the context of the labor market involves extensive, deep violation of emotions, fundamental rights and values that are at the heart of the system. Like my colleague President M. Naor, I too believe that in the circumstances of the petition there is an infringement of equality, which amounts to an infringement of human dignity. Indeed, ", in the case before us, we are not concerned with a trivial infringement ’ (para. 33 of the President's opinion). However, in my opinion, a much broader, more deeply rooted infringement is involved, which ought to be emphasized. The description by Justice I. Zamir in HCJ Recant in respect of discrimination concerning retirement age and its accompanying affront is apt in this regard: "a person who was active and effective, involved and useful is suddenly, in his own eyes and the eyes of those around him, made irrelevant (HCJ 6051/95 Recant v. National Labour Court, IsrSC 51 (3) 289, 342 (1997)). In addition, in my opinion, the infringement of equality – which amounts to an infringement of human dignity in the instant circumstances – is not the only violation. The freedom of the individual to work, create and express himself, which reflects another salient aspect of human dignity, is also infringed here, and substantially. And not only is there an infringement of equality, dignity and the freedom of occupation, but also of liberty and autonomy.

 

            The severity of the infringement essentially derives from a combination of the following: first, the major place that work has in our lives, and its being a means of self-fulfilment for many, beyond its being a source of income. This can also be learned from Jewish law. "Shmaayah would say: Love work" (Ethics of the Fathers 1:10). Of that Rabbi Eliezer said: "Work is so important that even Adam tasted nothing until he worked, as it is said,‘and placed him in the Garden of Eden, to till it and tend it (Genesis 2:15)" (Minor Tractates, Avot de-Rabbi Nathan, Recension B, Chapter 21). Rabbi Soloveitchik also wrote on this: "there is no doubt that the term 'image of God' in the first account refers to man's inner charismatic endowment as a creative being. Man's likeness to God expresses itself in man's striving and ability to become a creator. Adam the first who was fashioned in the image of God was blessed with great drive for creative activity and immeasurable resources for the realization of this goal" (Rabbi Joseph B. Soloveitchik, “The Lonely Man of Faith,” 7 (2) Tradition 5, 11 (1965). Second, the understanding that leaving the labor market is caused merely by reaching a particular age, in circumstances independent of the worker, which he cannot avoid. The creation of distinctions between people because of characteristics at the very heart of the definition of being human, over which he has no control – like race and sex – constitutes a salient sign of illegitimate discrimination, that might involve arbitrariness. In this sense, age might belong to that list of characteristics that are "forced" on a person. Moreover, ageism has other characteristics that might aggravate the infringement, For example, it is not static, but a variable that worsens.

 

Another related point is the difficulty of protecting against the infringement caused by age discrimination. There are several reasons. The first, the boundary between "equal" and "different" is not so clear with age, compared with other characteristics, which leads to vagueness. Expression of this can be seen in the fact that European law recognizes all age groups as groups that are protected against discrimination, while the 1967 statute in the United States extended the protection against discrimination based on age only to those aged 40 or more (see Fredman, 101). The second derives from the universal nature of the characteristic of age. The aspiration is for everyone to experience the whole "cycle of life". In the words of the wisest of men, "one generation goes and another generation comes" (Ecclesiastes 1:4). However, specifically because of that, there is a tendency to minimize the severity of the infringement caused by age discrimination. This is because it appears that there is "equality of infringement". That is to say that age discrimination is unkind to a person at a certain stage of  life, but might be kind to him at other stages. The matter is complex and even creates something of a contest of rights between generations, and even between man and himself at different times of life. However, constitutional review stands at the ready, and the story of man’s life does not prevent him demanding his rights, dignity and liberty at any given time.

 

            One should, of course, take care to avoid discrimination in all its forms, but it appears to me that the unique aspect of age discrimination is such as to affect the way in which the matter is analyzed and looked upon. With all the importance of a broad view of society and the general public, it should not be forgotten that Basic Law: Human Dignity and Liberty places the emphasis on the individual. There are people who welcome and accept the obligation to retire at a given age with open arms. The question when to retire at the upper limit does not have to be decided by them. There is acceptance and even, perhaps, peace in the knowledge that it is not to be determined by them. It is perfectly possible to create in different ways, not merely at work. That is certainly a legitimate approach. But alongside this there are also people for whom there is a close link between their definition of self and their contribution through work. And suddenly, bidden by the calendar, they have to break the link completely. This is despite the fact that some of them are still able and willing to contribute, even at a high standard. Time, which is man's dearest asset, seeks alternative substance but in vain. Such a person can feel worthless, lonely and even degraded. He might also feel that he is outside the main fabric of society, and as we know, it is sometimes very cold outside.

 

            And note well that I concur with my colleague the President's statement that constitutional review of legislative arrangements that delineate far-reaching social and economic policy necessitates extreme caution (para. 24 of her opinion). Indeed, the problem that the petition presents is "a polycentric' one in which as a rule the Court rarely intervenes" (ibid., para. 57). I further agree that the very determination of a mandatory retirement age is supported by proper purposes: the protection of workers' dignity and the improvement of job security in the economy; granting the employer certainty and stability and the ability to manage and plan manpower in the workplace; and intergenerational fairness (paras. 38-40 of the President's opinion). Despite all the aforegoing, and perhaps specifically because of it, I have considered it appropriate to emphasize and concentrate on the gravity of the infringement of the values and rights on the agenda. Based on the President's persuasive reasoning, I have not found intervention appropriate in the present petition, especially because of job security. Nevertheless, as regards both the real and the ideal, this result is far removed from being the final word.

 

The Choice between Different Models, and the Necessary Broad Factual Basis

 

3.         In accordance with the way in which matters have been presented by the Petitioners, my colleague the President's opinion concentrated on the question of which of the two models should be chosen: biological retirement or functional retirement. From that point of view, a contest is evident between two different philosophies, two ends of the spectrum, each of which is fair and reasonable. Each of the conflicting philosophies has advantages and disadvantages, as described at length by my colleague. It should also be noted that the point of view of the employee does not necessarily oblige the adoption of biological retirement rather than functional retirement, or vice versa. Thus, for example, the term "dignity" can serve both conflicting approaches: compulsory retirement does involve some infringement of the employee's dignity, as described above, but such infringement might also occur, albeit practically, when he is subjected to competence tests.

 

In any event, for the reasons detailed at length in her opinion, my colleague believes that the legislature's choice of the first of the two models is legitimate and passes the hurdle of constitutionality. As I see it, insofar as we must choose between the two options against the overall background that has been presented to us, that conclusion is indeed required. Nevertheless, I do not believe that the present situation is a desirable one that exhausts the choice. In my opinion, the time is right to expand the discussion about the range of different possibilities, if only because of the uniqueness and complexity of the matter. Before going into detail, I would make it clear that I am aware that the choice of the biological retirement model in our system is not located right at the end of the spectrum, because there are certain qualifications and subtleties. First, section 10 of the Retirement Age Law, 5764-2004, establishes that, with the employer's agreement, it can be agreed " that the age at which an employee can be required to retire from work because of age shall be higher than mandatory retirement age ". Secondly, in Weinberger (LabA (National) 209/10 Weinberger v. Bar Ilan University (December 6, 2012)), the Labor Court held that if the employee wishes to continue working after the age of 67, the employer is obliged to give relevant, individual consideration to that request. Nevertheless, in view of the complexity of the matter and the gravity of the infringement, I do not believe that those qualifications and subtleties are adequate in the circumstances.

 

4.         To be more precise, as the President stated (para. 46), there is a wide range of retirement arrangements between the model of compulsory retirement because of age and the model of functional retirement. Alongside the examples that were cited (ibid.), and with the object of expanding, I shall refer to three matters: the first, other arrangements; the second, greater focus on different jobs; and the third, the arrangement of a comprehensive, up to date examination of the issue.

 

            As regards other arrangements, it would appear that one solution is to increase retirement age. This point is important, but I would like to augment it. In my opinion, an approach should not be taken whereby one size fits all. As aforesaid, the issue should be examined as a whole, not merely through the lens of dignity, but also through the lens of liberty. If the social security that is expressed in tenure is what necessitates retirement at a fixed age, one can also think of a model whereby the employee chooses between different types of benefit at different stages of his life and career. In that sense, the age at which the employee starts working at a particular workplace might be important. These are, of course, mere examples to indicate that it is necessary to think outside the box.

 

            As regards focusing on different jobs, the case before us in fact illustrates the point. Working as a professor in academia has certain characteristics (regarding which, see the opinion of Justice D. Barak-Erez). Indeed, new ideas can be raised in this work environment. For example, evaluation mechanisms can be formulated in the universities for professors who have tenure (and there has been such experience, for example, in the United States. See: Samuel Issacharoff & Erica Worth Harris, “Is Age Discrimination Really Age Discrimination? The ADEA’s Unnatural Solution,” 72 N.Y.U.L Rev. 780, 790 (1997)). The existing mechanisms can be expanded in the form of enabling professors in academia to work solely in research or solely in teaching, also in a limited format, for example, in accordance with such criteria as would be decided. Here again, because of the complexity of the matter, an approach should not be taken according to which one solution is suitable for everyone. Among other things, it is necessary to examine whether a private or public workplace is involved, whether the employees there enjoy tenure or other job security, the economic implications of the various different alternatives – both to the employee and the employer, and to the market as a whole, etc.

 

            This leads us to the third point – a comprehensive, up-to-date examination of the issue. The choice between biological retirement and functional retirement is "forced" upon us by the petition in the absence of adequate foundation in support of other alternatives (see also para. 46 of the President's opinion). Although the fundamental controversy surrounding these matters in the public arena, with all its complexity and characteristics, does indeed support the conclusion that it is not for us to intervene now, it does appear to me that it is proper, necessary and even vital to lay down a broad, thorough and up to date factual foundation. The effect of mandatory retirement age on emplyees' standing, and on the labor market as a whole, is a highly complex issue that is context and society dependent. The answer requires social-science evidence, adapted to the prevailing economic, social and legal system. Evidence of that type has not been produced to us, but it should be made clear that no criticism of the parties' attorneys is implied thereby. A comprehensive, up-to-date examination requires proper supervision and resources. Individual workers cannot be expected to perform that task. The importance of the contribution is in actually raising the matter, and perhaps indicating what is deficient. In my opinion, a public commission, composed fro various areas, should be established in order to collect the relevant material, including empirical data, and hear testimony, and it should recommend proper policy for the current period.

 

            In order to illustrate the dimensions of the deficiency, it should be borne in mind that the recommendations of the public commission that was appointed to examine the issue of retirement age, together with its social and economic aspects, headed by Justice (Emeritus) Shoshana Netanyahu were submitted in 2000. The Commission itself was appointed back in 1997, some two decades ago. The Netanyahu Commission sat and deliberated the various different factors and the possibilities on the agenda for changing the mandatory retirement age, including the possibility of abolishing it altogether. However the Commission's work – comprehensive and thorough as it was – is far less relevant now, a generation after it convened (see and compare the opinion of my colleague Deputy President E. Rubinstein, according to which there should be an examination every 10 years). The assumptions and data upon which it relied, like the labor market in general, have changed. In my opinion, that fact necessitates an organized and thorough rethink – and as soon as possible. I therefore wholeheartedly join in the opinion of my colleague Justice E. Hayut, in para. 2 of her opinion.

 

To this we might add that the approach of different countries, that served, inter alia, as a source of comparison for the Netanyahu Commission, changed a few years ago, primarily afger the Commission's recommendations were submitted (in 2000). In some of the countries there has been a major change in outlook, in the same direction – namely the abolition by legislation of a compulsory retirement age (subject to certain exceptions, see para. 55 of the President's opinion). This has happened, for example, in England, where mandatory retirement in numerous sectors, including institutes of higher education, was abolished in 2011. In Canada too, mandatory retirement (in the public sector) was abolished in 2012.

 

As I have mentioned, I am conscious of the fact that issues of the type that the petition involves are dependent upon concrete context and society. For that reason, among others, extreme care should be taken when drawing analogies through comparative law. Another reason can be that social sensitivity in regard to social security is greater in Israel than it is, for example, in the United States. Nevertheless, it does appear to me that the tool of comparative law can also assist us in the complex issues facing us, provided that it is used in a careful, measured manner. Just as the experience of a worker in a particular job is of value, so too, is the experience of various different legal systems, even if it is necessary to make certain adaptations to the conditions of the country and its labor market.

 

5.         In conclusion, my opinion is that the legislature's choice of a compulsory retirement model because of age, at the time, reflected an informed choice among different possibilities. Changing times and developments along the way, the severity of the infringement involved in compulsory retirement, which is at the heart of man and his sense of self, the sensitivity of the matter and its complexity that is dependent upon context, society, and concrete, up-to-date data all now necessitate a thorough review by the legislature (and perhaps also by certain workplaces like universities), and an ensuing informed choice. Insofar as such a review is not made within a reasonable time, in my opinion the parties' arguments should be reserved. We, as a society, ought to properly contend with the issue and consider it in the best way, as required. This is especially the case in our day and age when not only is life expectancy changing, but so is the way in which quality of life is perceived. Subject to my foregoing statements, I concur with the result reached by President M. Naor that the petition should be dismissed. Let me conclude by saying "ageing is what we all hope for and all fear. Let there be more hope and less fear".

 

 

 

Decided as stated in the opinion of President M. Naor.

 

Given this 13th day of Nissan 5776 (April 21, 2016).

 

 

The President

The Deputy President

Justice

 

 

 

 

 

 

 

 

Justice

Justice

Justice

Justice

 

            

Full opinion: 

Israel Security Association v. National Labor Court

Case/docket number: 
HCJ 1893/11
Date Decided: 
Sunday, August 30, 2015
Decision Type: 
Original
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.]

 

Facts: The petitions concerned the interpretation of section 10 (3) of Schedule Two of the Class Actions Law, which restricts the possibility of instituting a class action in labor law in the case of a “suit by an worker who is subject to a collective agreement that regulates the terms of his employment, and the employer of that worker, or trade association of which it is a member, is a party to that collective agreement.” The petitions arose in light of decisions of the National Labor Court rendered in a number of cases litigated before it. The issue was whether this exception applied to every case in which a worker is subject to a collective agreement to which the employer, or the trade association, is a party, or whether it could be understood as not applying to such situations if neither collective nor legal action had been initiated to redress the breach of workers’ rights addressed by the class action.

 

Held: The High Court of Justice (per Justice D. Barak-Erez, Justices H. Melcer and Z. Zylbertal concurring) denied the petitions, holding that the National Labor Court had struck a proper balance among the relevant considerations in LabA 629/07 in re Viron, in LabA 132/10 in re Buskilla, and in LabA 53348-01-12 in re Yashiev. However, the Court decided to clarify the applicability of the exception under section 10 (3) of Schedule Two in regard to enforcement agreements, inter alia, in light of certain differences in their treatment in Buskilla and Yashiev.

 

Based upon the objectives of the specific law and considerations peculiar to the Israeli labor market, the Court held that the law does not categorically prevent every request to certify a class action by workers in a workplace subject to a collective agreement. In cases in which the collective agreement does not comprise a mechanism for the monitoring or enforcement of workers’ rights, and where the labor union is non-functional, i.e., is not an organization that takes practical steps for the enforcement of workers’ rights, then section 10 (3) will not bar a request to certify a class action. This conclusion approves the basic approach adopted in the Viron case, which has since served as the basis for the Labor Court’s decisions in other cases. In such cases, the Labor Court’s discretion does not extend to the question whether the exception under section 10 (3) is met, but only to the existence of the other conditions established under section 8 of the Class Actions Law for the purpose of certifying such a suit.

 

In light of the above, the Court held that when a request for the certification of a class action suit is submitted, the questions that the Labor Court will have to address will be whether the labor union is acting to advance the workers’ rights, and whether that action provides an effective means for the enforcement of the claimed rights. Such action need not be optimal, but it must be actual and not a mere “show”.

 

The Court then addressed, in greater detail, the cases in which the activity of a labor union would be deemed to constitute actual involvement in labor relations. Among other things, it was held that the Labor Court should consider the general circumstances of the case, inter alia, the defining characteristics of the relevant field; the existence or absence of systematic breaches of rights; the type of rights infringed; the conduct of the labor union (both in regard to the infringed rights and in general); the availability of the labor union for addressing individual complaints of workers; the general functioning of the labor union in protecting workers’ rights; the labor union’s ability to bring about the actual enforcement of workers’ rights, such that they receive what the employers owe them; as well as the labor union’s ability to redress past infringements of rights, and not act merely prospectively.

 

In a unionized workplace, a worker seeking to initiate a class action must show that he first sought the assistance of the labor union before seeking certification of the suit. In the opinion of Justice Barak-Erez, such a request for assistance must be for the enforcement of the personal rights of the worker. It must be a focused request for the enforcement of concrete rights, as opposed to some general request. Serving formal notice upon the labor union or informing it of the intent to initiate of a class action is not a precondition for filing a class action. The appropriate response time of the labor union can be considered by the labor court in accordance with the specific circumstances of each case.

Voting Justices: 
Primary Author
majority opinion
Author
concurrence
Author
concurrence
Full text of the opinion: 

The Supreme Court sitting as High Court of Justice

 

HCJ 1893/11

HCJ 1965/11

HCJ 9325/12

HCJ 7644/13

 

 

 

Before The Honorable Justice H. Melcer, The Honorable Justice Z. Zylbertal, The Honorable Justice D. Barak-Erez

 

 

The Petitioner in HCJ 1893/11

Respondent 3 in HCJ 1965/11

Respondent 9 in HCJ 9325/12

and Respondent 5 in HCJ 7644/13:                The Israel Security Association

 

 

The Petitioner in HCJ 1965/11

and Respondent 3 in HCJ 1893/11:                Tevel Security, Cleaning and Services Ltd.

 

The Petitioner in HCJ 9325/12:                      Amishav Services Ltd.

 

The Petitioner in HCJ 7644/13:                      Yashiev German

 

v.

 

Respondent 1 in HCJ 1893/11

Respondent 2 in HCJ 1965/11

Respondent 1 in HCJ 9325/12

Respondent 3 in HCJ 7644/13:                       The National Labor Court

 

Respondent 2 in HCJ 1893/11

and Respondent 1 in HCJ 1965/11:                Yigal Viron

 

Respondent 4 in HCJ 1893/11

and HCJ 1965/11

Respondent 5 in HCJ 9325/12

and Respondent 2 in HCJ 7644/13:                The New Histadrut General Labor Organization

 

Respondent 5 in HCJ 1893/11 and

in HCJ 1965/11 and

Respondent 4 in HCJ 7644/13:                       Kav La’oved Association

 

Respondent 6 in HCJ 1965/11:                       Employees of Tevel Security, Cleaning and Services Ltd.

 

Respondent 3 in HCJ 9325/12:                       Sergei Zandel

 

Respondent 4 in HCJ 9325/12:                       Vlad Konstantinovsky

 

Respondent 6 in HCJ 9325/12:                       Sa’ar Securuty

 

Respondent 7 in HCJ 9325/12:                       Gashash Ltd.

 

Respondent 1 in HCJ 7644/13:                       H.A.S. Systems and Services Ltd.

 

 

Petitions for Order Nisi

 

 

Dates of hearings:        7 Tammuz 5772 (27 June 2012)

 2 Nisan 5774 (2 April 2014)

 6 Adar 5777 (25 February 2015)

 

For the Petitioner in HCJ 1893/11

Respondent 3 in HCJ 1965/11

Respondent 8 in HCJ 9325/12

and Respondent 5 in HCJ 7644/13:                Shoshana Gavish, Adv., Odeliah Danoch-Shalom, Adv.

 

For the Petitioner in HCJ 1965/11

and Respondent 3 in HCJ 1893/11:                Shlomo Bechor, Adv.

 

For the Petitioner in HCJ 9325/12:                 Oded Gil, Adv., Adi Menachem, Adv.

 

For the Petitioner in HCJ 7644/13:                 Gai Avni. Adv.

 

For Respondent 2 in HCJ 1893/11

Respondents 1,6 in HCJ 1965/11

Respondents 2-4 in HCJ 9325/12:                  Gal Gorodisky, Adv., Avi Mor Yosef, Adv., Igor Glidar, Adv., Ortal Dai, Adv., Naama Vanunu, Adv.

 

For Respondent 7 in HCJ 9325/12:                Dalit Kislev-Spektor, Adv., Sharona Margi, Adv.

 

For Respondent 5 in HCJ 1893/11

And HCJ 1965/11

Respondent 4 in HCJ 7644/13 and

Respondent 7 in HCJ 9325/12:                       Eran Golan, Adv., Hagar Sussman, Adv.

 

 

For Respondent 4 in HCJ 1893/11,

1695/11 and Respondent 2 in

HCJ 9325/12:                                                  Boaz Ben Tzur, Adv., Elad Peled, Adv., Oren Shrem, Adv.

 

For Petitioner 6 in HCJ 9325/12:                    Ovadiah Cohen, Adv.

 

For Respondent 1 in HCJ 7644/13:                Saar Reshef, Adv., David Naftoliev, Adv.

 

For The Leumit Workers Organization:          Betty Metzer Levi, Adv., Ran Konfino, Adv., Maya Retig-Saba, Adv.

 

For the Attorney General

In HCJ 9325/12:                                             Michal Leiser, Adv.

 

 

 

Facts: The petitions concerned the interpretation of section 10 (3) of Schedule Two of the Class Actions Law, which restricts the possibility of instituting a class action in labor law in the case of a “suit by an worker who is subject to a collective agreement that regulates the terms of his employment, and the employer of that worker, or trade association of which it is a member, is a party to that collective agreement.” The petitions arose in light of decisions of the National Labor Court rendered in a number of cases litigated before it. The issue was whether this exception applied to every case in which a worker is subject to a collective agreement to which the employer, or the trade association, is a party, or whether it could be understood as not applying to such situations if neither collective nor legal action had been initiated to redress the breach of workers’ rights addressed by the class action.

 

Held: The High Court of Justice (per Justice D. Barak-Erez, Justices H. Melcer and Z. Zylbertal concurring) denied the petitions, holding that the National Labor Court had struck a proper balance among the relevant considerations in LabA 629/07 in re Viron, in LabA 132/10 in re Buskilla, and in LabA 53348-01-12 in re Yashiev. However, the Court decided to clarify the applicability of the exception under section 10 (3) of Schedule Two in regard to enforcement agreements, inter alia, in light of certain differences in their treatment in Buskilla and Yashiev.

 

Based upon the objectives of the specific law and considerations peculiar to the Israeli labor market, the Court held that the law does not categorically prevent every request to certify a class action by workers in a workplace subject to a collective agreement. In cases in which the collective agreement does not comprise a mechanism for the monitoring or enforcement of workers’ rights, and where the labor union is non-functional, i.e., is not an organization that takes practical steps for the enforcement of workers’ rights, then section 10 (3) will not bar a request to certify a class action. This conclusion approves the basic approach adopted in the Viron case, which has since served as the basis for the Labor Court’s decisions in other cases. In such cases, the Labor Court’s discretion does not extend to the question whether the exception under section 10 (3) is met, but only to the existence of the other conditions established under section 8 of the Class Actions Law for the purpose of certifying such a suit.

 

In light of the above, the Court held that when a request for the certification of a class action suit is submitted, the questions that the Labor Court will have to address will be whether the labor union is acting to advance the workers’ rights, and whether that action provides an effective means for the enforcement of the claimed rights. Such action need not be optimal, but it must be actual and not a mere “show”.

 

The Court then addressed, in greater detail, the cases in which the activity of a labor union would be deemed to constitute actual involvement in labor relations. Among other things, it was held that the Labor Court should consider the general circumstances of the case, inter alia, the defining characteristics of the relevant field; the existence or absence of systematic breaches of rights; the type of rights infringed; the conduct of the labor union (both in regard to the infringed rights and in general); the availability of the labor union for addressing individual complaints of workers; the general functioning of the labor union in protecting workers’ rights; the labor union’s ability to bring about the actual enforcement of workers’ rights, such that they receive what the employers owe them; as well as the labor union’s ability to redress past infringements of rights, and not act merely prospectively.

 

In a unionized workplace, a worker seeking to initiate a class action must show that he first sought the assistance of the labor union before seeking certification of the suit. In the opinion of Justice Barak-Erez, such a request for assistance must be for the enforcement of the personal rights of the worker. It must be a focused request for the enforcement of concrete rights, as opposed to some general request. Serving formal notice upon the labor union or informing it of the intent to initiate of a class action is not a precondition for filing a class action. The appropriate response time of the labor union can be considered by the labor court in accordance with the specific circumstances of each case.

 

 

Judgment

Justice D. Barak-Erez

1.         The Class Actions Law, 5766-2006 (hereinafter: the Class Actions Law or the Law) restricts the possibility of initiating a class action in the case of  a “suit by a worker who is subject to a collective agreement that regulates the terms of his employment, and the employer of that employee, or a trade association of which it is a member, is a party to that collective agreement” (as set out in section 10 (3) of Schedule Two of the Law, hereinafter: sec. 10 (3) or sec. 10 (3) of Schedule Two). The proper construction of this exception to the application of the Law is before this Court. More specifically, the question before us is whether this exception applies in every instance in which a worker is subject to a collective agreement to which the employer or the trade association is a party, or whether it should be understood such that it would not apply to such situations when neither collective nor legal action have been initiated for the enforcement of the violated rights addressed by the suit.

The Legal Question

2.         Section 3 of the Class Action Law defines the cases in which a class action may be filed, and restricts the right to initiate such a suit to “a suit as set forth in Schedule Two or in regard to a matter in which explicit statutory provisions establish the right to initiate a class action” (sec. 3 (A) of the Law). Reading Schedule Two of the Law reveals that it recognizes many cases in which a class action can be initiated for the infringement of workers’ rights. Section 8 of Schedule Two states that a class action can be initiated on a cause of discrimination under the Equality of Opportunities in Labor Law, 5748-1988, and upon a cause arising from the Male and Female Workers (Equal Pay) Law, 5756-1996. Section 10 (1) of Schedule Two establishes a wide range of additional causes of action rooted in labor law that may give rise to a class action.

3.         These broad provisions were restricted by sec. 10 (3) of Schedule Two, as follows:

                        “In this section –

‘Suit’—with the exception of a suit by a worker who is subject to a collective agreement that regulates the terms of his employment, and the employer of that worker, or a trade association of which it is a member, is a party to that collective agreement;

‘Collective Agreement – a collective agreement under the Collective Agreements Law, 5717-1957, or a written collective arrangement[1]

 

            That is to say:  an employee cannot initiate a class action if he is subject to a collective agreement that regulates the terms of his employment, and to which his employer or its trade association is party. The question that arises in the petitions before the Court concerns the construction of this condition. In other words, the question arising in the appeal before us addresses the ambit of the restriction set forth in sec. 10 (3) of Schedule Two in a situation subject to a collective agreement.

 

Summary of the factual basis and the prior legal proceedings

 

4.         Despite the provisions of sec. 10 (3) of Schedule Two, requests to certify class actions have been submitted in the past even in regard to workplaces subject to collective agreements. The petitions before the Court revolve around several proceedings in which such class actions were initiated. In principle, the National Labor Court adopted the position that sec. 10 (3) of Schedule Two does not constitute an impregnable barrier to class actions, even in regard to workplaces subject to a collective agreement, but added the clarification that in such cases, it is necessary to examine whether or not the representative labor union was derelict in regard to the employees’ rights, and only is such circumstances could a class action be certified. The proceedings before the Court concern three petitions addressing decisions by the National Labor Court in regard to requests to certify class actions related to the rights of workers in the security field. As will be more fully explained below, the petitions before the Court represent three “generations” in the case law of the National Labor Court in the matter of class actions in labor law, in general, and specifically in regard to the infringement of workers’ rights in the security industry. These “generations” represent the periods in which the requests for certification of the class actions were submitted in reference to developments in regard to the activities of labor unions in relation to the protection of workers’ rights in the security industry. The “first generation” represents the period in which the class actions were filed the labor unions took action to enforce the rights of workers employed as security guards. The “second generation” represents the period in which labor unions began to act to enforce the workers’ rights.  That activity was expressed in the signing of a general collective agreement intended to enforce the rights of workers in the security industry by virtue of labor law, extension orders,[2] and various collective agreements (hereinafter: the General Enforcement Agreement). The General Enforcement Agreement applied to all of the employers who were members of the trade association in the security industry, and every employer who would join the association after the signing of the agreement, in regard to the workers of such firms working as guards or in security positions. In the “second generation”, the requests to certify class actions were submitted prior to the General Enforcement Agreement, but the decisions were handed down after it had entered into force. The “third generation” represents the period in which the requests were submitted after the General Enforcement Agreement had entered into force, but questions still remained as to its contribution to the enforcement of workers’ rights in practice.

 

5.         The collective agreements in the security field – As noted, the three proceedings before this Court concern the rights of workers employed in the security-guard industry. There is a trade association in this field – The Israel Security Association (hereinafter: the Trade Association). On July 12, 1972, the Trade Association signed a collective agreement with the Histadrut General Labor Organization (hereinafter: the General Collective Agreement of 1972 and the Histadrut, respectively). The General Collective Agreement of 1972 was extended to all workers in the security field on December 25, 1973 (hereinafter: the 1973 Extension Order). On November 2, 2008, a new collective agreement was signed in the security industry (hereinafter: the General Collective Agreement of 2008). That agreement applied to all employers who were members in the Trade Association, and to all workers employed as guards or in security. The provisions of that agreement were extended by an extension order on June 21, 2009 such that they applied to all employers in the guarding and security industry in Israel, as well as to their workers employed in guarding and security positions (hereinafter: the 2009 Extension Order). The result is that all workers in the security and guarding industry enjoy rights that are anchored in the said extension orders of 1973 and 2009 respectively. Nevertheless – and it would seem that this point is no longer contested – the workers in this industry did not always enjoy all of the rights to which they were entitled, and yet no collective enforcement actions were undertaken to defend them. It was against this background that requests to certify class actions were submitted in regard to those breaches, even in regard to workplaces that were subject to the General Collective Agreement by virtue of the employer’s membership in the Trade Association.

 

6.         The “first generation” of decisions of the National Labor Court – The possibility of certifying class actions of workers within the ambit of sec. 10 (3) of Schedule Two was first recognized in LabA 629/07 Viron v. Tevel Security, Cleaning and Services Ltd. (March 1, 2011) (hereinafter: the Viron case), after previous requests to certify class actions of workers were denied for various reasons (see: LabA 339/07 Oren v. Bank Hapoalim Ltd.) (January 18, 2009), regarding which the petition to the High Court of Justice was denied in limine in HCJ 9720/10 Oren v. National Labor Court (January 25, 2011); LabA 58039-11-11 Turgeman v. Shahak Security, Guarding and Office Services Ltd. (December 31, 2012), regarding which the petition to the High Court of Justice was denied in limine in HCJ 62/13 Turgeman v. National Labor Court (January 28, 2013)). The Viron case concerned a request (submitted in 2006) to certify a class action for the failure to make pension-fund contributions for workers in accordance with the provident fund and severance provisions of the 1973 Extension Order. The respondent in that case, Tevel Security, Cleaning and Services Ltd. (hereinafter: Tevel) argued that it was a member of the Trade Association, and that the workers were therefore covered by the General Collective Agreement of 1972 and the class action could not, therefore, be certified. The National Labor Court held that the class action met the various criteria of the Law, and that sec. 10 (3) of Schedule Two should be construed in a manner that does not preclude its submission. The reasoning grounding the decision (per Judge V. Viret-Livneh, Judge A. Rabinovich and Public Representative I. Segev concurring) was that the Labor Court is granted discretion to certify a class action even in regard to the infringement of rights in a unionized workplace, in view of the overall circumstances of the case and the purpose of the Class Action Law, for example, when the labor union does not act for the full enforcement of the workers’ rights. It was further held that the matter was one in which justification for certifying the class action could be found in the powerlessness of workers in the security-guarding industry and the ongoing infringement of their rights, such that their rights had effectively received no protection. In addition, the court found that Tevel had joined the Trade Association only after the suit had been filed, and inasmuch as its membership could not have retroactive effect, the restriction under sec. 10 (3) of Schedule Two was not applicable to the suit in any case. As opposed to that, President S. Adler dissented from the majority’s understanding of sec. 10 (3), arguing that the rule should bar class actions in unionized workplaces in all but exceptional, extreme and distinguished cases in which the labor union is a “puppet” or is not an authentic union or is entirely inactive. Nevertheless, President Adler concurred with the result under the circumstances of the case, inasmuch as Tevel was not a member of the Trade Association at the relevant time, but only joined after the submission of the request to certify the class action. Public Representative S. Habshush concurred in the opinion of President Adler.

 

7.         Petitions challenging the decision in the Viron case were submitted to this Court in 2011 by the Trade Association (HCJ 1893/11) and by the employer, Tevel, itself (HCJ 1965/11). The respondents in those proceedings were the plaintiff in the class action, the Histadrut and the Kav La’oved Association (hereinafter: Kav La’oved) which had presented itself in the proceedings before the National Labor Court (in addition to the National Labor Court itself, which is, by nature of the proceedings, a formal respondent in all of the petitions before us). The Attorney General, who was asked to submit his position in regard to the petitions, stated that he saw no reason to intervene in the decision of the National Labor Court, inasmuch as everything stated in regard to sec. 10 (3) of Schedule Two was obiter dicta in light of the finding that Tevel was not a member of the Trade Association at the time relevant to the suit. To complete the picture, it should be noted that in the course of the years following certification of the class action, the parties to the class action conducted negotiations towards a settlement, and the proceedings were therefore held in abeyance and left undecided. On January 5, 2015, the Tel Aviv District Labor Court ratified the settlement agreement between Viron, the plaintiff in the class action, and his employer, Tevel (LabC (T.A.) 6476/06 Deputy President S. Tenenbaum and Public Representatives M. Cohen and A. Kirshner). However, an appeal was entered against that decision, along with a request for a stay, by the Kav La’oved Association, which was of the opinion that the settlement did not adequately serve the interests of the workers due to the mechanism established for serving notices to the members of the group. The National Labor Court issued the requested stay on March 12, 2015 (LabA 14653-02-15, Judge A. Itach). The appeal was heard on June 22, 2015, and it remains in abeyance.

 

8.         Enforcement agreements made after the “first generation” of decisions – The certification of the class action in the Viron case, and the submission of additional requests for certification of class actions that followed, served as a catalyst for the signing of additional collective agreements that were defined from the outset as intended to advance the enforcement of workers’ rights in the security industry.

 

9.         In 2011, the Trade Association and the Histadrut signed the General Enforcement Agreement. As noted, the Agreement applies to every employer that was a member of the Trade Association at the time, or that became a member thereafter, as well as to every worker employed by a member in that association in the fields of guarding or security. According to that agreement, every employer that is a member of the Trade Association is required to submit an annual statement, certified by an accountant, to that association and to the Histadrut, in regard to the fulfillment of its obligations and payments required under labor law, extension orders and collective agreements. Additionally, the General Enforcement Agreement required the establishment of an enforcement committee composed of a representative of the Trade Association, a representative of the Histadrut, and an external accountant. Under the General Enforcement Agreement, the enforcement committee is required to perform annual sample audits of the members of the Trade Association in regard to the fulfillment of their obligations and payments as detailed above, including in regard to periods in the past. The General Enforcement Agreement further requires that the employers fully rectify any flaws that may be discovered, and the Histadrut is authorized to expand the audit of an employer and order him to redress flaws even if they are from periods that have expired due to limitation of actions. In addition, a worker who wishes to complain in regard to a breach of his rights may present his complaint through the representative of The Israel Security Association to the conflict resolution mechanism established by the General Collective Agreement of 2008. Under sec. 33 of that agreement, a joint review board composed of a representative of the employer and a representative of the Histadrut will first convene to examine and mediate the dispute between the parties to the agreement. If the review board is unable to resolve the matter by mutual agreement, the matter will be transferred to a superior joint review board composed of two representatives, one form each side (the Histadrut and the Trade Association). Under subsection (a) of sec. 33, if the superior joint review board is unable to reach an agreed resolution, the dispute will be transferred to an arbitrator chosen by the joint review board. Under subsection (b) of sec. 33, disputes between an employee and his employer, can be taken directly to an arbitrator, by mutual agreement, as stated in subsection (a).

 

10.       In 2014, a special collective agreement (hereinafter: the Special Enforcement Agreement) was signed between Amishav Services Ltd., the Petitioner in HCJ 9325/12 (hereinafter: Amishav) and the Leumit Labor Federation (hereinafter: the Leumit Federation). The Leumit Federation has been operating as a labor union in Amishav since 2013, although its status as the representative organization[3] in the company has not yet been decided, as shall be explained below. Practically speaking, the Special Enforcement Agreement is similar to the General Enforcement signed with the Histadrut, except that it applies exclusively to Amishav and its employees. The agreement provides for the establishment of an enforcement committee composed of a company representative, a representative of the Leumit Federation, and a certified wage examiner under the Law for the Increased Enforcement of Labor Laws, 5772-2011. The Special Collective Agreement requires that, once every quarter, Amishav will provide sample pay slips of employees in its various projects as requested by the Leumit Federation, which will examine them and verify their accuracy, as may be required. It further provides for a quarterly sample audit of all the obligations and payments of Amishav to its employees, including for prior periods, and that the enforcement committee will have the authority to order the rectifying of flaws that may be discovered, as well to expand the scope of the audit as it may deem necessary.

 

11.       The “second generation of National Labor Court decisions – the next stage of decisions in this area – its “intermediate generation” – comprises the cases in which requests for certification of class actions were submitted prior to the signing of the General Enforcement Agreement, but for which the decisions were rendered after it was signed. In two instances, the National Labor Court held that the General Enforcement Agreement was not relevant to requests submitted before it was signed, inasmuch as it was a prospective agreement that was not intended to redress past violations of employees’ rights. In LabA 67/10 Yivtach Ltd. V. Havusha (March 14, 2012) (hereinafter: the Havusha case), the National Labor Court pointed out that, under the agreement, the obligation to present proof of payments applied to the employers only as of 2010, whereas the request to certify the class action was submitted in 2006. Moreover, the National Labor Court noted that the request concerned rights from 1999 forward, and thus from years that preceded the signing of the Enforcement Agreement. That was also the holding in LabA 132/10 Buskilla v. Sa’ar Security Ltd. (Sept. 3, 2012) (hereinafter: the Buskilla case), which addressed three requests to certify class actions that were joined, and that had been submitted in 2006 and 2007. In the Havusha case, the National Labor Court reiterated its view that in addressing the question of whether the restriction established under sec. 10 (3) of Schedule Two, the court must consider whether the purpose of that restriction was achieved, and that the proper construction in each case must consider the characteristics of the industry in which the workers were employed, and whether there was a widespread phenomenon of systematic breach of the rights of workers in that field. The court further held that that the question of whether the collective agreement actually regulated work conditions must be examined, that is, did the employer apply it in practice. The proceedings in the Havusha case are not yet over, and are currently adjourned due to a winding-up order issued against the employer in that case (see the decision of Nov. 26, 2012 in NIA 4524/06, Judge H. Yahalom). Similarly, in the Buskilla case, the court held that the restriction established by sec. 10 (3) is not comprehensive, but rather creates a defense for which the burden of proof falls upon the party claiming it. It was further held that the restriction does not apply where the employer raises the claim of the existence of a collective agreement only in the course of the proceedings, in order to “evade” the class action, or where the employer does not deny the existence of a collective agreement, but refused to apply it over a period of years. It should be noted that the proceedings in regard to the request were remanded to the District Labor Court in Haifa for consideration of the other conditions for the certification of a class action, and it was indeed certified by that court on Sept. 17, 2013 (Labor Dispute Case 924/07, Judge A. Kogen and Public Representatives H. Dror and Y. Ron). Accordingly, the case remains before the District Labor Court.

 

12.       A petition against the District Labor Court’s decision in the Buskilla case was submitted to this Court by Amishav, the employer of one of the class action plaintiffs in that matter (HCJ 9325/12). Two of the respondents in this proceeding are the other security companies that were sued, Sa’ar Security Ltd. and Gashash (Z.A.) Ltd. (hereinafter: Sa’ar Security and Gashash, respectively), along with the class action plaintiffs in that matter, as well as the Histadrut and the Trade Association. The Attorney General informed the Court that he, too, would appear in this proceeding, and the Leumit Federation that, as noted, operates as a labor union in Amishav since 2013, asked to join the proceeding in regard to the Special Enforcement Agreement that it signed with Amishav (after Buskilla’s request to certify the class action, and after the hearing in the National Labor Court). The Trade Association, the petitioner in HCJ 1893/11, also asked to join. The Trade Association was joined to the proceeding on March 21, 2013 (Justice A. Arbel), and submitted its arguments. It should be noted that on the dates relevant to the suit, the General Collective Agreement applied to Amishav as a member of the Trade Association (as did the General Enforcement Agreement, for the same reason). Those agreements also applied for the same reason to Sa’ar Security and Gashash, the two other employers sued in the Buskilla case, who did not petition against the Labor Court’s decision but support petitioner Amishav’s position. We will add at this juncture that we have decided to join Kav La’oved and the Leumit Federation to this proceeding due to their relevance to the subjects at hand and their contribution to the proceedings as a whole.

 

13.       The “third generation” of decisions in the National Labor Court – Following the signing of the General Enforcement Agreement in the security industry and its application in practice, the question arose whether the interpretive rationale that grounded the possibility of class actions for infringements of workers’ rights in the security industry was still applicable. This question was addressed by the National Labor Court in LabA 53348-01-12 Yashiev v. H.A.S. Systems and Services Ltd. (June 3, 2013) (hereinafter: the Yashiev case). The Yashiev case concerned an additional request to certify a class action in the security industry, submitted in 2011, about two months after the signing of the General Enforcement Agreement, and addressed the infringement of workers’ rights (failure to set aside pension payments in the amount of 6% of wages) over the preceding seven years. The National Labor Court held that in view of the entry into force of the General Enforcement Agreement, the request to certify the class action should be denied (President N. Arad, Deputy President Y. Plitman, and Public Representative A. Weitz). Citing LabA 12842-07-10 Eyal v. Hot Communications Systems Ltd. (June 9, 2011) (hereinafter: the Eyal case), the court further held in the Yashiev case that the class-action plaintiff should have applied to his employer and to the labor union before submitting the class action, and that the plaintiff could only submit a request for certification if they failed to act. Judge Rabinovich noted that he agreed, under the circumstances, that implementing the General Enforcement Agreement would be the more just and efficient means for resolving the issue in the instant case (citing sec. 8 (a) (2) of the Class Actions Law that establishes such a condition for the certifying of a class action), but added that the implementation of the General Enforcement Agreement should be evaluated over time, in accordance with its results, and by a concrete evaluation of the agreement in each case. Public Representative D. Sharon concurred. To complete the picture, we would note that the approach by which Histadrut action in regard to workers’ rights under the General Enforcement Agreement bars the submission of class actions was adopted in subsequent cases (see: LabA 16808-06-12 Tauber v. Hashomrim Group Guarding and Security Ltd. (March 4, 2015); LabA 7229-05-12 Batya v. Mikud Israel Security, Services and Manpower Ltd. (March 4, 2015)).

 

14.       The class-action plaintiff in the Yashiev case also submitted a petition to this Court, arguing that his case should have been decided in the same manner as preceding cases in which the General Enforcement Agreement did not constitute a bar to a class action. The respondents in that proceeding are the Histadrut, the Kav La’oved Association, the Trade Association, and the plaintiff’s employer, H.A.S. Systems and Security Ltd. (hereinafter: H.A.S.) (HCJ 7644/13).

 

15.       The petitions before the Court were originally heard separately. In a hearing on June 27, 2012, on the petitions in the matter of Viron (HCJ 1893/11 and HCJ 1965/11), the parties agreed to conduct the proceedings as if an order nisi had been issued (A. Arbel, H. Melcer, D. Barak-Erez, JJ.). A hearing was held on April 2, 2014 in the Buskilla case (HCJ 9325/12, A. Grunis, CJ, Y. Danziger, Z. Zylbertal, JJ.), in which the parties updated the Court in regard to the developments in the various proceedings, including the settlement reached in the Viron case and the petition submitted in the matter of Yashiev. In addition, the response of the Attorney General was requested in the Buskilla proceeding (who, as noted, informed the Court of his intention to appear in these proceedings on March 7, 2014). Finally, a joint hearing was held in regard to all of the petitions on Feb. 25, 2015, in which the parties agreed that the hearing would be conducted as if orders nisi had been issued in regard to all of the proceedings.

 

Additional proceedings in the Labor Court

 

16.       To complete the picture, it should be noted that additional requests for certification of class actions have been submitted in parallel to these proceedings. Examples will be presented below in order to demonstrate that in proceedings such as this, fundamental questions with a common denominator arise, and they will be the focus of our deliberation.

 

17.       Another class action was submitted against Amishav, the respondent in the Buskilla case, by a woman who was employed by the firm as a cleaner, and by Kav La’oved. The hearing in that case was held in the National Labor Court after the Yashiev case was decided, and after the signing of the Special Enforcement Agreement between Amishav and the Leumit Federation. The National Labor Court held that, in light of the decision in the Yashiev case preferring enforcement of rights by means of the labor union, the case should be remanded to the District Labor Court for an examination of whether the Leumit Federation was actually taking collective action to enforce the workers’ rights. For the time being, it was decided that the case will not be joined with the proceedings in the matter of Buskilla (LabA 5268-01-11 Tagnia v. Amishav Services Ltd. (March 5, 2015)). That matter awaits the decision of the National Labor Court on the question of which labor union is the representative organization in Amishav (see: the decision of the Jerusalem District Labor Court in Judicial Appointment Hearing 5771/08, President D. Pruzinan, regarding Inter-Organization Suit 6759-12-14).

 

18.       Another request to certify a class action was submitted in 2009 against an additional security company, Hashomrim Association Ltd. The District Labor Court denied the request for various reasons, noting that sec. 10 (3) of Schedule Two bars class actions against union-organized workplaces. The National Labor Court denied the worker’s appeal against the decision not to certify the class action (and granted the company’s appeal to recoup costs assessed against it) (LabA 425/09 Goldberger v. Hashomrim Association Ltd. (Feb. 2, 2010)). A petition against that decision was submitted to this Court. In light of the decision that had been handed down in the interim in the Viron case, the parties agreed that the Court remand the case to the District Labor Court in regard to the cause of action concerning the failure to set aside pension contributions according to the pensions provision, without taking a stand on the merits (HCJ 2023/10 Goldberger v. National Labor Court (Feb. 14, 2011)). In the end, having been remanded to the District Labor Court (and joined with another class action submitted by another of the company’s workers in 2010), it was decided, in accordance with the Yashiev decision, that due to the existence of the General Enforcement Agreement, the class action should not be certified at this stage. The District Labor Court further noted that the plaintiffs had not approached the Histadrut, the Trade Association or the employer to request enforcement of their rights before instituting the suits (see Employee/Organization Case (BS) 15305-06-10 Goldberger v. Hashomrim Association Ltd. Jan. 1, 2014)). The appeal is now pending before the National Labor Court (LabA 21520-02-14).

 

19.       Another case worthy of mention in this context is a request to certify a class action submitted in 2006 by a worker in B.G. Moked Security Ltd. In that case, the District Labor Court certified the class action, holding that the employer had not shown that it was a member of the Trade Association and that its workers were therefore covered by a collective agreement. In the National Labor Court, the employer claimed that it had agreed to a “process for enforcing the rights of the company’s workers” with the Histadrut, and asked that the court approve the agreement that establishes the said process, under which the workers’ rights would be redressed retroactively for the seven preceding years, on the condition that the judgment of the District Court be set aside. The National Labor Court noted that the employer had chosen to claim the existence of a collective agreement only ex post facto, as a “shield” to the class action, and that it had not proven that it was a member of the Trade Association and thus subject to the original collective agreement. In any case, the National Labor Court further held that the agreement reached by the employer and the Histadrut in regard to an enforcement process for workers’ rights does not justify altering the result, and that the process is not preferable to certification of the class action. The National Labor Court added that the fact that the employer began to pay its workers for the claimed rights after the request for the class action is not a sufficient reason to deny certification in view of the clear importance of that class actions in encouraging enforcement and deterring breach of the law. The National Labor Court noted that the enforcement process was offered only at the appeal, such that it is not unreasonable to imagine that it was the class action that spurred the employer and the Histadrut to action, and that the process offered no recompense to the plaintiff in the class action. Moreover, the class action related to a period that predates the one addressed by the enforcement process, and the enforcement of a judgment has advantages over the “enforcement process” as proposed, which would require appealing to the Histadrut if it is not enforced in practice (see: LabA 454/09 Moked Security v. Ben Shlomo (March 23, 2011) (hereinafter: the Ben Shlomo case)). It should be noted that, in the end, the parties reached a court-approved settlement, and in the framework of the settlement, a special collective agreement was signed (with the Leumit Federation) that included compensation for the company’s workers for the cause of action claimed in the class action, including past workers of the company. It should also be noted that the settlement included an award to the plaintiff in the class action, and payment of her legal fees, and noted her contribution to the change in the employer’s policy (see: Employee/Organization Case (TA) 9528-07-07 Ben Shlomo v. B.G. Moked Security Ltd. (Feb. 15, 2015)).

 

20.       On July 7, 2015, after a hearing before this Court, the attorney for the class-action respondents filed a request to submit additional supporting material and to present protocols from ongoing proceedings. In light of the nature of the questions that we have been asked to decide, we did not see fit to grant the request.

 

Summary of the pleadings

 

21.       In general, the primary disagreement between the parties – the “first-order” question – centers on the very possibility of submitting a request to certify a class action when the employment of workers by the employer is subject to a collective agreement. Two primary positions were presented to the Court: One saw sec. 10 (3) of Schedule Two as posing an absolute bar to class actions in union-organized work places, while the other saw sec. 10 (3) as a relative bar that depended upon the question of whether workers’ rights were enforced in practice in the workplace. In addition, if the latter were the case, then as a “second order” question, the parties were divided on the question of the “threshold” for the certifying of such a class action as regards the conduct of the labor union. Lastly, a “third order question” arises that  also concerns situations in which the labor union has begun to act, but only after the submission of the class action.

 

The (“first order”) issue in regard to the very possibility of a class action where a collective agreement exists

 

22.       The position opposed to the submission of class actions was – for various reasons – that of the security companies whose workers were affected by the class actions – Tevel, Amishav, Gashash, Sa’ar Security and H.A.S. (hereinafter: the employers), the Trade Association, and the Histadrut. All of the above argued that sec. 10 (3) was intended to protect collective labor relations. In their view, the possibility for submitting a class action against an employer undermines the collective regime to which the employers and the labor union are parties.

 

23.       From the formal point of view, it was argued that the language of sec. 10 (3) of Schedule Two is clear and unambiguous.

 

24.       From the substantive point of view, it was argued that a class action is not a necessity in cases of inadequate protection of workers’ rights by a labor unions, in light of the availability of other avenues for seeking relief, such as individual lawsuits by the injured workers, lawsuits against the labor union for “inadequate representation”, or even the taking of steps to establish a competing labor union or organized defection to a competing union. It was further argued before us that the decision of this Court in HCJ 7029/95 Histadrut General Labor Organization v. National Labor Court, 51 (2) IsrSC 63 (1997) (hereinafter: the Amit case) demonstrates the importance of maintaining the collective framework in labor relations. This can be see, inter alia, from the fact that a union that ensures the wellbeing of workers but that does not address their working conditions and compensation from the point of view of collective labor relations cannot be deemed a “labor union” with all the significance that attends that recognition (ibid., at p. 131). The employers, the Trade Association, and even the Histadrut sought to employ this in the interpretation of sec. 10 (3) in regard to the importance of ensuring the primacy of collective labor law and that of labor unions within that framework. In furtherance of this point, it was argued that the possibility of initiating a class action in the presence of a collective agreement will result in harm to the labor unions, and will ultimately undermine the motivation of employers to join trade associations that are party to a collective agreement. Additionally, in regard to the “second order” issue that we will address more fully below, it was argued that such a “flexible” interpretation of sec. 10 (3) will lead to the need for a “voir dire” on the question of whether the labor union actually acts for the enforcement of workers’ rights in practice.

 

25.       For their part, the class-action plaintiffs rejected those arguments. Primarily, they argued that sec. 10 (3) should not be interpreted in a formal manner, without regard for its purpose, which is to deny class actions when there is a real alternative for protecting workers’ rights in a collective framework. They went on to argue that the alternatives suggested for the protection of workers’ rights were not real alternatives. Instituting a personal lawsuit, they argued, does not address the collective issue, and in any case, is not an effective path for unempowered workers. Additionally, it was argued that a suit for inadequate representation is subject to strict standards, such as “conspiracy”, and the alternative of organizing under a different union is neither practical nor achievable in many cases where we are concerned with a powerless and dispersed group of workers. Moreover, the class-action plaintiffs emphasized that sec. 10 (3) even applies in cases in which the relevant collective agreement is not the result of negotiations conducted by the union in regard to the specific workplace, and it is possible that the workers will not even be members of that union because the employer joined a trade association that is party to a general collective agreement. This, they believe, testifies to the danger inherent in the strict interpretation of sec. 10 (3), such that, in practice, the collective agreements will not result in the actual protection of workers.

 

26.       Kav La’oved supported the position of the class-action plaintiffs. Its attorney also pointed out that sec. 10 (3) was not even mentioned in the Class Actions Bill, 5765-2005, and was added to the proposed law only in the course of the debate, after it was explained that class actions should not be recognized where there is in fact a means for protecting workers (citing the protocol of meeting no. 667 of the Constitution, Law and Justice Committee of the 16th Knesset, 18-21 (March 1, 2006)). Kav La’oved further pointed out that, in practice, collective organization had not been employed as a means for protecting the rights of workers in the security and cleaning industries, in which workers are employed through contracts with private manpower agencies, and the Histadrut does not defend their rights in practice. It was further emphasized that the application of the General Collective Agreement in the security industry to the workplaces relevant to these petitions derived solely from the respondent employers’ membership in the Trade Association, and not as the result of any real activity by labor unions on behalf of the workers.

 

27.       The Attorney General presented his position to the Court in his appearance in the hearing on the petition in the Buskilla case. In principle, the Attorney General supported the approach of the National Labor Court, according to which sec. 10 (3) of Schedule Two does not constitute an absolute bar to class actions. According to the position expressed to the Court, some solution should be provided for situations in which there is a disconnection between the workers and the union that purports to represent them. The Attorney General added that the case law of the National Labor Court developed tools for contending with such exceptional cases, without detracting from the purpose of unionized labor.

 

The (“second order”) issue regarding the “limits” of the scope of the exception set forth in sec. 10 (3)

 

28.       As earlier noted, the National Labor Court’s decisions in the Buskilla case and the Yashiev case added an additional aspect to the question of which class actions would be disallowed under sec. 10 (3).What arises from those decisions of the National Labor Court is that the enforcement of rights in practice, in the form of an enforcement agreement, may change the picture in regard to class actions. The decisions addressed the General Enforcement Agreement between the Histadrut and the Trade Association, which we described above. In the Yashiev case, the National Labor Court took the view that a class action that was initiated after the General Enforcement Agreement had come into force and after the Histadrut had begun to act upon it (including in regard to the rights of former workers) should not be certified. In that case, the petition against the decision of the National Labor Court was submitted by the class-action plaintiff, who was of the opinion that the General Enforcement Agreement should not constitute a bar to the certification of the suit as a class action.

 

29.       In essence, what the class-action plaintiff argued in the Yashiev case was that the mere existence of an enforcement agreement was insufficient, and that the court must ascertain whether the agreement was actually applied in practice. It was therefore argued that a decision not to certify the class action should be conditioned upon the implementation of the General Enforcement Agreement, which should be reviewed and monitored by the Labor Court. It was further argued that, in any case, the existence of the General Enforcement Agreement should not be taken into account in regard to breaches that preceded its signing. As opposed to that, the class-action plaintiff’s employer, H.A.S., and the Histadrut argued that even in such a case, and a fortiori, class actions should not be permitted.

 

30.       As opposed to that, the Kav La’oved Association sided with the class-action plaintiffs on the matter of enforcement agreements – emphasizing the history of signing enforcement agreements, which allegedly demonstrates that preventing class actions was the primary motive for their adoption. Kav La’oved further argued that there is a fear that such agreements will not live up to their promise (this view and the reasons grounding it are set out in detail in Eran Golan and Yael Plitman, “Class Actions and Collective Labor Law – the Good the Bad and the Ugly,” 6 Maasei Mishpat 177 (2014). It should be noted that the author Eran Golan is the attorney for Kav La’oved in the proceedings before this Court).

 

The (“third order”) issue regarding the date on which the labor union began to act relative to the date of the filing of the class action

 

31.       In the Buskilla case, the National Labor Court was of the opinion that the General Enforcement Agreement did not bar certification of the class action, inasmuch as the agreement was signed after the initiation of the class action.

 

32.       The parties to the Buskilla petition essentially reiterated the above arguments. Here, too, the employers, the Trade Association and the Histadrut argued that the class action should not have been certified because the workers of Amishav were subject to the General Collective Agreement of 2008, as well as to the General Enforcement Agreement signed in 2011. In their view, those collective agreements constitute an impenetrable barrier to class actions. In their opinion, the test is the applicability of a collective agreement and not whether it is actually enforced, and any other interpretation would harm the collective labor relations that sec. 10 (3) was intended to protect. The Histadrut argued that, at the very least, the respondent should have been required to turn to the labor union before submitting a class action, in order to give it the opportunity to act collectively.

 

33.       On their part, the class-action plaintiffs reiterated their stance that the existence of a collective agreement does not absolutely rule out the initiation of a class action. As regards the General Enforcement Agreement, which the plaintiffs referred to as the “breach agreement”, they noted that when a defendant pays the claim after the initiation of a class action, it encourages infringing the law and undermines compliance (citing, inter alia, CA 10262/05 Aviv Legal Services Ltd. V. Bank Hapoalim (Dec. 11, 2008)). The class-action plaintiffs agreed with the holding of the National Labor Court that the General Enforcement Agreement was not relevant to the rights at issue in the Buskilla case, and that in any event, the General Enforcement Agreement was merely a “purported” agreement that could not serve as a bar to a class action even if it were in force at the time of filing (as they also argued in the Yashiev case). Kav La’oved was also of the opinion that, in view of the circumstances of its signing and its actual effectiveness, the Enforcement Agreement was not sufficient.

 

34.       The arguments in regard to the conclusions to be drawn from the existence of an enforcement agreement, particularly one signed after the initiation of the class action, were brought into sharper light when the Leumit Federation joined the proceedings. As earlier noted, the Leumit Federation signed a special enforcement agreement with Amishav, the petitioner in HCJ 9325/12. According to the Leumit Federation, when a labor union is actively engaged in protecting the rights of workers, the collective framework should be preferred to a class action, even if that activity began after the filing of the class action. The Leumit Federation further argued that in such a situation, the class action should not be certified, subject to the condition that if filing it was the class action that led to the enforcement of the rights, then appropriate compensation should be awarded to the class-action plaintiff and its attorney, despite the denial of the suit, or some other agreed arrangement should be made with the class-action plaintiff.

 

35.       The Leumit Federation further argued that the Special Enforcement Agreement that it signed with Amishav was firm and not restricted to the limitation-of-actions period or to current breaches. Therefore, it was argued, it is important to preserve the organized labor relations created by the special collective agreement, and to prevent the submission of class actions where enforcement actions have commenced even after the filing of the class action. This is also true in view of the fact that a labor union has better tools for achieving enforcement in comparison to a class action. The attorney for the Leumit Federation noted in the hearing before this Court that Leumit is open to a certain measure of supervision of the implementation of the Special Enforcement Agreement by the labor court.

 

Discussion and Decision

 

36.       This decision requires that we reexamine the guiding principles of labor law. It requires that we address the special difficulties associated with the protection of workers’ rights in general, and of unempowered workers in particular, as well as the special considerations related to collective labor law and the faithful representation of unempowered workers in that framework. All of this must be examined against the special background of class-action law and the principles that govern this Court’s intervention in the decisions of the labor courts.

 

37.       We should first note that, in this case as well, our guiding policy is that the labor courts are the appropriate forum for delineating the principles of labor law, in view of their superior expertise in this area (see, e.g., HCJ 525/84 Hatib v. National Labor Court, Jerusalem, 40 (1) IsrSC 673, 684-694 (1986); HCJ 4193/04 Gartner-Goldschmidt v. National Labor Court, paras. 12-14 (June 20, 2010); HCJ 92/13 Peri v. National Labor Court, para. 7 (Jan. 1, 2013)). However, the petitions before the Court are of a type that justifies an in-depth examination of the arguments by this Court, given the substantive legal question at issue, and its impact upon the interpretation of the Class Actions Law and upon the fundamental rights of a unempowered workers (see: HCJ 3716/13 Egged, Israel Transport Cooperative Ltd. V. National Labor Court, paras. 25-26 (July 3, 2014)).

 

38.       In any event, for reasons that will be explained below, we have concluded that the petitions should be denied, as the National Labor Court struck an appropriate balance among the competing considerations in the Viron case, the Buskilla case, and in the Yashiev case. Nevertheless, we are of the opinion that the scope of the restriction established under sec. 10 (3) of Schedule Two should be clarified, inter alia, in light of certain differences in this regard in the Buskilla and Yashiev cases.

 

The scope of the dispute up to this point: Class actions prior to and following the Class Actions Law

 

39.       In order to take a “broad view” in addressing the petitions before us, we should present the development of the case law of the National Labor Court, and the opinions expressed in that regard.

 

40.       Before the enactment of the Class Actions Law – In principle, when the question of class actions of workers came before the courts prior to the enactment of the Class Actions Law, the starting point of the National Labor Court was that class actions could not proceed against a unionized workplace subject to a collective agreement. This followed from the principled view that collective action was the high road for resolving labor-law disputes. This approach was established in the decision of President S. Adler in LabA 1210/02 Bibring v. El Al Israel Airlines Ltd., 38 IsrLC 115, 136-140 (2002) (hereinafter: the Bibring case). (Also see: LabA 300031/98 Israel Aircraft Industries Ltd. V. Morag, 35 IsrLC 289, 308 (2000)).

 

 

41.       We would preface our remarks by stating that, in general, this is a very sensible approach. However, the question before us is whether the principle is inviolable, or whether exceptions should be established for situations in which the collective protection system fails. This question only became acute with the enactment of the Class Actions Law and the exception in sec. 10 (3) of Schedule Two.

 

42.       The traditional approach following the enactment of the Class Actions Law – Initially, the National Labor Court held fast to its traditional approach in regard to the possibility of submitting class actions in labor law, even after the enactment of the Class Actions Law. When the question came before the court, the majority opinion of the National Labor Court in regard to sec. 10 (3) of Schedule Two followed the interpretation previously adopted in the Bibring case, and thus reflected a narrow approach that prevented the submission of class actions (and see: LabA 1154/04 Gross v. State of Israel Ministry of Defense (Jan. 9, 2007) (hereinafter: the Gross case); LabA 1537/04 Katz v. Clallit Health Services, Clalit Health Fund (Jan. 9, 2007) (hereinafter: the Katz case); the Oren case). Deputy President E. Barak-Ussoskin adopted a different approach, arguing (in a minority dissent in the Gross case, and as a lone dissent in the Katz case) that class actions should be permitted in unionized workplaces when the labor union refrains from taking up the issue on the workers’ behalf.

 

43.       The new approach after the enactment of the Class Actions Law – As opposed to the traditional approach of the National Labor Court, a broader approach developed that recognized the possibility of certifying a class action in cases in which workers’ rights were infringed even when the work place was purportedly subject  to a collective agreement. Under this approach, sec. 10 (3) of Schedule Two should be interpreted in a manner that would exempt situations of systematic infringements of workers’ rights that were not effectively addressed by the labor union, as an exception that could be permitted at the discretion of the labor court. This approach, first enunciated in the opinions of Deputy President E. Barak-Ussoskin (originally in a minority or lone dissents), was adopted by the majority in the Viron case, per Judge V. Viret-Livneh (ibid. paras. 48-54). Judge Viret-Livneh based her opinion in the matter on the doctrine of purposive interpretation, as follows:

 

The purpose of the exception in part 10 (3) of the Appendix was to enable the representative labor organization in unionized workplaces subject to a collective agreement that regulates labor conditions – and here I would add that it actually regulates the labor conditions in practice and not just on paper – to take the steps at its disposal by virtue of its function, to compel the employer to conform to the collective agreement, primarily by initiating a process of a collective labor dispute” (ibid., para. 31, emphasis original).

 

Thus, under this approach, sec. 10 (3) should be read in a manner that limits its scope in regard to situations in which the collective agreement formally addresses workers’ rights, but does not advance them in practice. As noted, this approach was again adopted in the Havusha and Buskilla cases, which emphasized the importance attached to the actual enforcement of workers’ rights, and referred to the labor court’s discretion in the matter, in light of the specific character of the relevant labor relations.

 

44.       It should be noted that the new approach in the case law of the National Labor Court was adopted only in a majority opinion. In the Viron case, President Adler continued to adhere to his strict approach to class actions in unionized workplaces, as it was earlier developed in the Bibring case. President Adler expressed his position in stating: “Even where we discern a problem of under-enforcement and a breach of workers’ rights that undoubtedly requires resolution, it is proper – in the case of a unionized concern – that the solution be found in the collective labor framework and not by infringing or undermining it” (the Viron case, para. 17 of the opinion of Adler, P.).

 

45.       It would hardly be superfluous to note that even according to the approach of President Adler, there may be exceptions to sec. 10 (3) of Schedule Two, and in some cases a class action may be certified despite the existence of a collective agreement. However, President Adler defined the exceptions very narrowly, referring to a situation of a “puppet” organization, or one that is not authentic or that is entirely inactive, situations in which the collective agreement is invalid (for substantive rather than technical reasons), or where a collective agreement is declared void because it was signed by a party that was not the representative organization at the time. As opposed to this, he emphasized that dissatisfaction with the functioning of the representative organization is insufficient in this regard (see: the Viron case, at para 17 of the opinion of Adler, P.), as the proceeding for the certification of a class action is ainppropriate for the examination of the functioning of the representative organization. The workers, he added, have other mechanisms at their disposal for improving the functioning of the labor union.

 

46.       Additional approaches – Another narrow approach to the interpretation of sec. 10 (3) was presented in an article by Professor Alon Klement and Professor Sharon Rabin-Margalioth (Alon Klement & Sharon Rabin-Margalioth, “Employment Class Actions: Did the Rules of the Game Change?” 31 Iyuney Mishpat, Tel Aviv University Law Journal 369 (2009) (Hebrew)) (hereinafter: Klement & Rabin-Margalioth). However, the emphasis of that article was somewhat different, and was based upon a distinction between lawsuits initiated for a breach of contractual rights deriving from collective labor relations and lawsuits concerning a breach of rights deriving from labor shield laws. This distinction was based upon the postulation that a class action is a means for advancing the full enforcement of rights, whereas union action may only result in a partial enforcement of rights. The authors go on to explain that when rights deriving from labor shield laws are concerned, full implementation should be ensured, and class actions should be permitted in regard to their breach, while the protection of contractual rights can be left to labor unions, which should enjoy control over the extent of enforcement.

 

47.       In addition to the approaches presented above, we should note that (retired) Deputy President Barak-Ussoskin even suggested – in light of cumulative experience – that sec. 10 (3) of Schedule Two be amended such that the labor courts be granted discretion to certify class actions even when a workplace is governed by a collective agreement (see: Elisheva Barak-Ussoskin, “From the Heights of Nebo – Class Action and Labor Law: Can they exist together? In light of the Class Actions Law, 5766-2006,” Gabriel Bach Volume 577, 579 (David Hahn et al, eds., 2011)). According to her approach, preventing class actions in unionized workplaces is not in keeping with the character and tradition of Israeli labor law, and in any case, is not appropriate as a matter of legal and social policy. The article is ultimately aimed at the legislature, and calls for amending the exception as it appears in the Law, in view of the fundamental principles of labor law. However, inasmuch as the article was completed after the decision in the Viron case was handed down, it also expresses support for the principled approach enunciated there (ibid., p. 617).

 

48.       It is now appropriate that we move from the examination of cumulative experience to a presentation of the considerations that should guide us in establishing the appropriate approach for the construction of sec. 10 (3).

 

Interpreting the law: Labor law versus class-action law

 

49.       We should state at the outset that in interpreting sec. 10 (3) of Schedule Two, we will adopt the interpretive approach generally employed by the Supreme Court in its decisions – purposive interpretation – which is the approach that guided the National Labor Court, as well.

 

50.       In order to establish the appropriate purposive interpretation of this legislative provision, we must examine the objectives of the two fields of law between which it resides – class-action law and labor law. From the perspective of class-action law, the reigning objective is that of the maximal enforcement of rights, and those of unempowered communities in particular. Labor law, as well, views the optimal enforcement of workers’ rights as a central objective. However, that objective is aligned with another one, that of the protection of the power of labor unions, and the two are strongly bound. The power of labor unions is not an independent value, but is intended to serve the interests of workers in the framework of collective labor relations. Weak unions cannot effectively represent the working community and ensure its rights, as such unions would not be relevant negotiating partners from the perspective of the employers. But union activity is multi-dimensional, and is not limited to the enforcement of workers’ rights. Often, it is directed at improving working conditions that go beyond the issue of existing rights. Thus, the protection of the power of unions is a broad objective that goes well beyond the defense of existing rights. The Class Actions Law sought to negotiate a path between these objectives by means of an arrangement that opens the broad avenue of class actions to workers, but that is subject to a restriction intended to preserve the power of labor unions. An understanding of the balance grounding that compromise will guide is as we proceed.

 

51.       As earlier noted, there is, indeed, good reason for the approach that argues that the effective enforcement of workers’ rights requires collective action that organizes workers against the power of their employer. In the collective labor system, collective action is generally founded upon the activity of the labor union. The Class Actions Law presented an alternative path for organized action by workers when their rights were infringed – not action by the labor union but through uniting forces by means of a class action. Section 10 (3) sought to prevent workers from choosing class actions, in normal circumstances, in order not to undermine union activity. In such circumstances, sec. 10 (3) should be construed in a manner that will ensure workers’ rights, but without opening a breach that would undermine labor unions and their standing in the important system of organized labor relations. From this perspective, the current trend in the decisions of the Labor Court is appropriate. Below, we will set out the main points of our position in order to clarify its proper implementation, in the spirit of the decisions of the Labor Court but with some additional explanations and points of emphasis. The interpretation of the section is grounded upon several footings: interpretation of the language of the law, its legislative history, and its purpose.

 

The Language of the Law

 

52.       Section 10 (3) of Schedule Two removes suits covered by a collective agreement from the type of suits that can be certified as class actions. The key to interpreting this section is the interpretation of the term “regulate”. What is a collective agreement that regulates labor relations? The word “regulate” in its legal context is a term of art that refers to the establishing of a comprehensive normative system that applies to a field, its enforcement and supervision. Regulation is comprehensive organization, in the sense of creating rules, enforcing them, and monitoring implementation. Thus, regulation is expressed by action, and not merely by words on paper. Professor Itzhak Zamir wrote in this regard that the concept of regulation “consists of two parts: first, regulation of private activity in different fields by means of rules determined by statutes, regulations and administrative provision; second, enforcement of the rules by various mechanisms…” (Itzhak Zamir, “Public Supervision of Private Activity,” 2 IDC Law and Business Journal 67 (2005) (Hebrew)).  That represents the accepted approach in the literature on regulation in general. Of course, there are different approaches to defining the concept, but generally speaking, they can all be said to describe a system of rules that are  implemented through monitored enforcement (see, for example: Philip Selznick, “Focusing Organizational Research on Regulation,” in Regulatory Policy and the Social Sciences 363, 363-364 (R.G. Noll, ed., 1985) “Regulation refers to sustained and focused control exercised by a public agency over activities that are valued by a community”; Morgan Bronwen and Karen Yeung, An Introduction to Law and Regulation 3 (2007) “deliberate attempts by the state to influence socially valuable behaviour which may have adverse side-effects by establishing, monitoring and enforcing legal rules”; David Levi-Faur, “Regulation and Regulatory Governance,” in Handbook on the Politics of Regulation 6 (David Levi-Faur, ed., 2011) “the ex-ante bureaucratic legalization of prescriptive rules and the monitoring and enforcement of these rules by social, business, and political actors on other social, business, and political actors”; and see: Sharon Yadin, “What is Regulation? Proposing a Definition Following First Uses of the Term in Israeli Legislation,” Hukim Journal on Legislation (Sept. 2014) (Hebrew); Ayelet Hochman, Alon Hesper and Dan Largmen, “Speaking about Regulation – On the Concept of ‘Regulation’ and its Place in Israeli Law,” in Regulation (Roy Kreitner, Yishai Blank and David Levi-Faur, eds., to be published in 2015) (Hebrew)).

 

53.       This Court, as well, has repeatedly held that monitoring is an inherent element of regulation. Thus, for example, the Court held in CrimA 725/97 Kalkoda v. Agricultural Inspection Authority, 52 (1) IsrSC 749 (1998) that the need to monitor or enforce compliance with agricultural production and marketing quotas, as established by law, is a “structural need that is essential to the survival of the regulatory regime” (ibid., at p. 765).  Moreover, according to the decisions of this Court, where the legislature grants an administrative agency the authority to issue a license, we must assume that the legislature also intended to authorize that agency to supervise the activity for which the license was given, in order to prevent the frustration of the objectives that the license was meant to serve (see: CrimA 107/58 Attorney General v. Nordau Plaza Hotel Ltd., 13 IsrSC 1345, 1358 (1959);  HCJFH 6127/00 Insurance Supervisor v. Zion Insurance Co. Ltd., 58 (4) IsrSC 937, 956-947 (2004); AAA 9187/07 Luzon v. Minister of Interior, para. 32 (July 24, 2008)). Therefore, regulation that is expressed in the dry words of rules alone – merely on the books – without the breath of life in the form of actual enforcement and supervision – does not constitute regulation in the full sense of the term, and certainly not for legal purposes.

 

54.       This is true in the matter before us, as well. A collective agreement that is not enforced by the labor union cannot be deemed an agreement “that regulates the terms of his employment” in regard to the worker. Only when the implementation of a collective agreement is enforced and monitored can it be deemed an agreement that “regulates” the worker’s terms of employment. Of course, this construction addresses only the “first order” issue, i.e., the question whether the existence of a collective agreement categorically prevents the submission of request to certify a class action. That is not sufficient. The following will address the question of the cases in which a collective agreement will be deemed one “that regulates the terms of his employment” in regard to a worker.

 

The Legislative History

 

55.       Evidence of the purpose of sec. 10 (3) of Schedule Two as a provision intended to protect the activity of the representative labor organization in the workplace in which it acts to monitor and enforce the rights of workers – as opposed to where it does not act – can also be found in the words of Knesset Member Reshef Chen, who presented the Class Actions Bill to the Knesset plenum on behalf of the Constitution, Law and Justice Committee, for the second and third readings:

 

“I would like to briefly address the scope of the causes of action to which this law will apply, and to draw the attention of the Knesset to the expansion presented by this law…It will be possible to bring suit for every matter related to labor relations that is within the jurisdiction of the labor court. The suit will be heard by the labor court. The only restriction in this regard concerns matters in which the worker is represented by a labor union, because the idea is that if a worker is represented by a labor union, then it is right and proper that the labor union represent him rather than a class action proceeding” (13 Proceedings  of the Knesset 94 (5766)).

 

56.       From the above, it is clear that sec. 10 (3) of Schedule Two includes the inherent assumption that unions should be protected against the creation of means that sidestep them when they actually act to ensure the rights granted to workers by a collective agreement or by law, and as stated “it is right and proper that the labor union represent” the worker (ibid.). In other words, the section does not treat of the situation in which the labor union does not function.

 

57.       We should further note that the above was stated after the problem of a union that does not act on behalf of the workers, despite the infringement of their rights, was addressed in the meetings of the Constitution, Law and Justice Committee. MK Chen raised the following question himself:

 

“The question is what do we do when the labor union objects to the submission of a class action? The answer must be that it must be joined as a defendant.”

 

And thereafter:

 

            “It objects by omission, it doesn’t submit the lawsuit.”

 

See the protocol of Session 1 of the Constitution, Law and Justice Subcommittee, 16th Knesset 57 (April 20, 2005).

 

Purposive Interpretation in light of Labor Law

 

58.       As stated, the exception established under sec. 10 (3) of Schedule Two of the Law was intended to further an important objective of labor law – protection of the various organs in collective labor law, and particularly the labor union. The preliminary assumption grounding that protection is that the labor union enjoys an inherent advantage in protecting workers’ rights. It is a permanent organization that is not formed only at times of crisis and conflict, and therefore can garner achievements over time and not just in localized conflicts. As already noted, it facilitates improvements in working conditions that go beyond the enforcement of obligatory rights. It can serve as a counterweight to the power of the employer. In general, it demonstrates the concept that the whole is greater than the sum of its parts (see Moran Savorai, “The Purpose of Representation Mechanisms in Labor Law: The Class Action Mechanism versus the Traditional Tools of Collective Labor Law,” Elisheva Barak-Ussoskin Volume 597 (Stephan Adler et al., eds., 2012) (Hebrew)). Indeed, there have been changes over the years in the background of labor law that have directly and indirectly led to the weakening of labor unions (see: Guy Mundlak, “Inter-union Relations: On the Decentralization of the Israeli Labor Relations System,” 6 Labor Law Annual 219, 239-240 (1996) (Hebrew) (hereinafter: Mundlak); Nava Pinchuk-Alexander, “Directions for the Renewal of the Labor Union in the Twenty-First Century,”10 Labour, Society and Law 51 (20040 (Hebrew)). However, these alone cannot detract from the basic reasons that ground the importance of those organizations. We will, therefore, proceed to examine the exception under sec. 10 (3) of Schedule Two in light of the objective of protecting labor unions.

 

59.       In principle, the source of the representative labor organization’s strength is to be found in its acting as a single actor in a given negotiation unit, uniting a large number of workers (this understanding gave rise, for example, to the slogan “One Histadrut – a strong Histadrut”. See Mundlak, at pp. 230-234, and see: Stephan Adler, “Collective Agreements: Framework, Application and Coordination,” Bar-Niv Volume 17 (1987) (Hebrew); Guy Mundlak, Fading Corporatism – Israel’s Labor Law and Industrial Relations in Transition 18-19 (2007). The power of the labor union permits it to conduct a dialogue with the employer – to acquiesce in one matter in order to gain in another. Thus, for example, the labor union may relinquish certain non-obligatory economic or legal rights in order to garner achievements in other areas (see: LabA 300205/98 Avni v. The New Histadrut Labor Organization, 34 IsrLC 361, 369 (1999)). The possibility of waiving certain rights in a manner that allows the employer to rely upon that waiver exists only when the workers, or some of them, cannot act against the employer in regard to that decision by means, for example, of a class action. In other words, a labor union’s power to protect the rights of its members and act for their benefit derives from its uniqueness – from its representativeness. The achievement of this objective requires that we “encourage activity by means of strong labor unions that concentrate substantial negotiating power. This requires restricting the freedom to organize and preventing insubstantial organizations from negotiating on behalf of the workers” (Ruth Ben-Yisrael, Labor Law, vol. 3, 1134 (2002); and see: the Amit case, at p. 104; LabC 7-4/33 Tel Aviv University v. Tel Aviv University Academic Faculty Organization, 5 IsrLC 85, 96 (1973)). Against this background, the legislature was guided by the concept that class actions should not be permitted to undermine the representative labor organization in a unionized workplace in which the normal tools of collective labor law are being applied, for fear that it would weaken the union.

 

60.       What does this imply? Purposive interpretation of the Class Actions Law in light of labor law leads to the conclusion that protection of the labor union is required only in cases in which there actually is organizational or legal labor-union activity for the purpose of protecting workers’ rights.

 

61.       The proposed interpretation of sec. 10 (3) of Schedule Two is consistent with a guiding principle of labor law that definitions must be scrutinized from within the system itself, in accordance with the actual situation and the purpose of the definitions, and not simply by an external examination focused upon classifications and terms. Thus, for example, the decision who is an “employee” is not contingent solely on the formal term the parties choose to describe the labor relationship. The test adopted over the years for classifying the employment category is a “mixed test”. The test comprises a large number of subtests, among them the “integration test” that examines whether the party performing the work is integrated into the business of the party supplying it, and whether the party performing the work maintains his own business. In the framework of the integration test, the issue of control is examined, as well as the manner of employment and the arrangements for paying taxes, etc. As was explained in this context: “The main advantage of the mixed test is expressed in its great flexibility. This flexibility allows the court maneuvering room in which to consider the dynamic character of labor relations, and strike a balance among the factors that influence the nature of the relationship between the performer of the work and the receiver of the work product” (see: Stephen Adler, “The Scope of Incidence of Labor Law – From Control to Purpose,” Menachem Goldberg Volume 17, 22 (Aharon Barak, Stephen Adler, Ruth Ben-Yisrael, Yitzhak Eliasaf & Nachum Feinberg, eds., 2001)).

 

62.       That is also what was decided in regard to the issue of recognizing a labor union. In the Amit case, it was held that a condition for recognizing a labor union was that an organization seeking legal recognition must be capable of fulfilling the function expected of such an organization by the legislature. In this regard, it was held that mere appearance was not enough, and that an examination was required to ascertain whether the organization actually, rather than just formally, met the statutory criteria for recognition. In other words, “one must also carry out a reasonable examination of whether an organization that presents itself as a labor union is truly a labor union” (ibid., at p. 120). As explained later in the decision, there can be two reasons that an organization will not be deemed a “true” union – first, that the organization merely purports to be a union but has no true intention to act in accordance with its declared purposes, and merely pretends to that end; second, and relevant to the present case, it is a failed organization, in the sense that although its intentions and desires are real, it does not realize them (ibid., at p. 121; and see EA (National) Hareidi Kindergarten Teachers’ Association v. Agudath Yisrael Teachers’ Organization (Sept. 15, 2008), para 24 of the opinion of Adler, P.). In practice, these two exceptions are also significant in understanding the dispute over the appropriate interpretation of the Class Actions Law, in light of the two purposes noted above – protection of workers’ rights and preserving the power of labor unions. The narrow interpretive approach that President Adler proposed for certifying a class action adopted the first of the above two situations. As opposed to this, the majority of the Labor Court in the Viron case, and the National Labor Court’s decisions in the Havusha and Buskilla cases, opened the class-action gate in the second situation – in which the organization failed in performing its duty – as well. In the Yashiev case, the National Labor Court further examined the question of when an organization may be said to fulfil its function properly, and more specifically, whether the existence of enforcement mechanisms justifies an affirmative answer to this question.

 

Purposive Interpretation in regard to the Class Actions Law

 

63.       As noted, purposive interpretation of sec. 10 (3) of Schedule Two requires that we also examine it in light of the purpose of the Class Actions Law itself. The purposes of the Class Actions Law are defined in sec. 1 of that law, as follows:

 

“The purpose of this law is to set uniform rules for the submitting and managing of class actions, in order to improve the defense of rights, and thereby particularly to promote the following:

(1) Realizing the right of access to the courts, including for populations that have difficulty approaching the court as individuals;

(2) Enforcing the law and deterring its violation;

(3) Providing appropriate relief for those harmed by the violation of the law;

(4) Efficient, fair and exhaustive administration of suits.”

 

64.       We can learn from sec. 1 of the Class Action Law that a class action has two primary purposes: first, helping injured groups; second, enforcement of the law and deterrence of further violations. A class action serves the personal interests of the plaintiff, but also “harnesses” him for the general good, and thereby ensures compensation for those who aid in law enforcement and deterrence of violations in areas in which there is a “market failure” in regard to enforcement. In this regard, a class action is a type of regulatory tool, in the broad sense of the term (as for the influence of the position of the regulator upon the certification of class actions, compare and contrast, for example: CA 7928/12 A.R.M. Technologies Ltd. v. Partner Communications Ltd. (Jan. 22, 2015)). The regulatory purpose of the Class Actions Law requires that we interpret sec. 10 (3) of Schedule Two in a manner that would prevent a market failure in the enforcement of workers’ rights. Therefore, narrow construction of the exception established by sec. 10 (3), such that it would apply only in cases in which there actually is organized “regulation” of labor relations in practice, with all that this implies, is the interpretation that realizes the purposes of the Class Actions Law as established by the legislature.

 

65.       That being so, our interpretation of sec. 10 (3), permitting the initiation of a class action in regard to a workplace in which the labor union is dysfunctional and does not act to enforce the workers’ rights, is consistent with and advances the objectives stated in the Class Actions Law. As opposed to this, the interpretation urged by the employers, the Trade Association and the Histadrut, largely frustrates those objectives. The approach that would prohibit the initiation of a class action where the labor union is dysfunctional, directing the workers to alternative means for enforcing their rights, such as submitting individual lawsuits against the employer, leads to a paradoxical result. The initial assumption of collective labor law is that the individual worker is a weak party that is generally not equipped to bring about enforcement of the law and protection of his rights, and thus requires the assistance of a labor union. Therefore, one cannot argue that recourse must be made to private lawsuits when the labor union is dysfunctional. In such a case, in which the labor union is not doing its job, recourse must be made to a comparable alternative to a collective labor dispute, i.e., a class action. As a rule, an individual worker lacks adequate financial means to press for his rights, and all the more so in circumstances characterized by relatively small infringements from the perspective of the worker. To this we might add that, practically speaking, under such circumstances, the worker does not have very promising alternatives. That is true in regard to a suit for inadequate representation, which the case law narrowly construes (see: LabC 4-7/36 El Al Israel Airways Ltd. v. Herut, 8 IsrLC 197, 223 (1977); LabA 7129-10-11 Hajaj v. Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd. (April 7, 2014)).

 

Purposive Interpretation in regard to the Principal-Agent Problem

 

66.       In truth, interpreting the exception established in sec. 10 (3) of Schedule Two is another example of contending with the phenomenon of the “Principal-Agent Problem” in law, that is, situations in which the party meant to represent the interests of another fails to do so, and for whatever self-serving reasons, does not fulfil its duty. The Principal-Agent Problem refers to situations in which the interests of the agent and of the principal are not congruent. The agent is meant to act faithfully in pursuing the principal’s interests, but occasionally, the interests of the two are not aligned, and the agent acts in his own interest. The agent may not act in the interests of the principal in a situation in which there is an asymmetry in the information available to each of them. In addressing this problem, it is important to employ incentives that will bring the interests of the parties into closer alignment, while imposing a supervision and monitoring regime over the actions of agent (and see: Zohar Goshen, “‘Agency Cost’ as a Unifying Theory in Corporate Law,” in Essays on Law in Memory of Professor Gualtiero Procaccia 239 (Aharon Barak ed., 1996) (Hebrew)). In the present context, the labor union is the agent responsible for the protection of the interests of the workers. When a labor union fails to fulfil its duty to act for the realization of the rights of unempowered workers, we have an example of the Principle-Agent Problem. A labor union would seem to have incentives to represent workers effectively in order to maintain its position as a representative organization and continue to collect dues. However, those incentives are not sufficient in a situation in which the workers are characteristically dispersed and unaware of their rights, such that they ae a “captive audience”. In such a situation, particularly when it would be difficult to establish a competing organization, the Principle-Agent Problem becomes acute. The labor union may suffice with minimal or no activity, and nevertheless continue to collect dues from its members. Accordingly, it is appropriate to interpret sec. 10 (3) in a manner that ensures monitoring of the attendant concerns of the Principle-Agent Problem. This conclusion is of particular importance in light of the narrow construction given to lawsuits for inadequate representation, that otherwise might offer an alternative solution. Parenthetically, we would note that the narrow construction adopted in this regard would seem to be problematic. But inasmuch as the matter is not before the Court, we will not address it in depth.

 

67.       Occasionally, the Principal-Agent Problem is anticipated by ex ante monitoring, for example, by requiring court approval for legal acts (by a guardian or a receiver).  In other cases, the Principal-Agent Problem is addressed by ex post monitoring, by creating an alternative procedure for enforcing rights – in those case where the “high road” is blocked by an agent’s defective action. Thus, for example, derivative suits in companies law constitute a residual alternative to the high road of a lawsuit brought by the company’s authorized organs. A derivative suit allows a shareholder to wield the company’s power to sue when the company does not use that power (see: Zipora Cohen, Company Shareholders - Causes of Action and Remedies Vol. 3 (2nd ed., 2010)). One of the reasons for this apparatus was explained as follows:

 

“The danger of abuse in reserving the power to initiate legal action to the board of directors. The directors may decide not to initiate legal action on the company’s behalf in order to shield themselves and prevent the discovery of their mistakes or the imposition of liability upon them. Since the deciding of primary rights and obligations is not involved, but rather their realization by means of a secondary right – the right to sue – there is greater willingness to permit a majority of shareholders to intervene” (ibid., at pp. 452-453).

 

We thus find that where the Principal-Agent Problem is one in which the organ with the authority to initiate legal action, i.e., the board of directors,  does not act, and the shareholders may be harmed thereby, a special procedure exists for contending with the problem, as an alternative route appropriate for a situation of “system failure”.

 

68.       At times, a petition to the High Court of Justice or to the Administrative Court against an act or omission by a governmental agency may be an example of contending with the Principal-Agent Problem in situations in which a public functionary fails in its duty as a public trustee. As Justice H. Cohn noted:

 

“The private sphere is not like the public sphere. In the former, one grants at will and denies at will. The latter exists for no reason other than to serve the public, and has nothing of its own. All it has is held in trust, and it has no other, different or separate rights or obligations than those that derive from that trust or that are granted or imposed by the authority of statutory provisions” (HCJ 142/70 Shapira v. Bar Association District Committee, Jerusalem, 25 (1) IsrLR 325, 331 (1971)).

 

69.       Similarly, in the matter before us, the question is how to act in situations in which the potential danger inherent in agency is realized when the labor union refuses to defend workers’ rights. In such a situation, we should not deny the possibility for alternative action that would allow the workers to enforce their rights collectively. Moreover, the very existence of a residual system may itself serve as an incentive for the labor union to act on behalf of its members, and thus mitigate the Principal-Agent Problem (even when it is not employed). A labor union that knows that if it does not act to protects workers’ rights, there is the possibility of a class action that will effectively make it superfluous, will make an effort to take timely action against the employer in appropriate cases. The very existence of an alternative system (that of class actions), even if not used, may change the incentives of the organs acting for the general good, and strengthen the mechanisms of collective labor law. All the more so when we take into account the changes that have occurred in the labor market, in which we find a stratification of worker populations, with low-paid workers at the lowest stratum that is barely represented by labor unions, and that suffer from under-enforcement of their rights and from low job security (and see: Guy Mundlak & Reuben Gronau, Industrial Relations in Times of Transition, The 12th Caesarea Economics Policy Planning Forum, 69-106  (Policy Paper No. 54, Israel Democracy Institute, 2004)).

Comparative Aspects

70.       In principle, our decision in this matter is rooted in Israeli labor law and the conditions of the local labor market. In such circumstances, the value of a comparative law analysis is relatively limited. Accordingly, the parties focused their arguments on local law. However, in his supplementary pleadings, the attorney for the class-action plaintiffs pointed to the possibility of initiating class actions in American and Australian labor law even in unionized workplaces. Against this background, we will briefly comment on the subject.

71.       In general, an examination of foreign legal systems in this area reveals a variety of approaches. These approaches are the result of the particular considerations of each system rather than of some statutory restriction in the law governing class actions.

72.       In Canada, we see an approach restricting the possibility of submitting class actions in labor law in order to protect collective labor relations. An example can be found in the Canadian Supreme Court’s decision in Bisaillon v. Concordia University [2006] 1 S.C.R. 666 (hereinafter: the Bisaillon case), in which a request to certify a class action was denied in a case in which there was a collective agreement. However, that conclusion derived from the fact that, in Canada, the collective agreement mechanism is entirely governed by the conception that disputes arising therein be referred to arbitration (in accordance with the Canada Labour Code, 1985). The restriction is not upon class actions, per se, but is part of a general view as to the resolution of disputes in collective labor relations. Additionally, and no less important, in the Bisaillon case, the relevant labor unions supported the class action, such that it did not address the issue before us – the initiation of a class action in circumstances in which the labor unions refrained from supporting the workers whose rights were infringed.

73.       In the United States, the birthplace of class actions, the question of certifying class actions in labor law focuses upon whether the traditional requirements of class actions in this regard are met (in terms of the commonality of the claims of the members of the class, etc.), rather than upon “threshold” questions (see, e.g., Wal-Mart Stores, Inc. v. Dukes 564 U.S. (2011)). To the extent that restrictions apply to the submission of class actions in workplaces with collective agreements, they arise from arbitration clauses in the agreements with the workers (although there is some debate as to the enforceability of such clauses, see, e.g., Stacey L. Pine, “Employment Arbitration Agreements and the Future of Class-Action Waivers,” in 4 (1) Am. U. Labor & Employment L. Forum 66 (2014)).

74.       To all the above we should add that a comparison to the situations in other jurisdictions is further complicated by the fact that the labor unions are, themselves, important “actors” in this area. In the United States, a class action can be filed against the union itself, and not just against an employer. In Australia, labor unions are deemed effective class-action plaintiffs in cases of infringement of workers’ rights (see: Jane Caruna & Vince Morabito, “Australian Unions – the Unknown Class Action Protagonists,” 30 Civil Justice Quarterly 382 (2011)).

75.       In light of all the above, we have based our opinion primarily upon the objectives of local law, and the particular considerations of the Israeli labor market.

 

Answer to the “First Order” Question: Regulation as Regulation in Practice

76.       Our conclusion is, therefore, as follows: The Law does not categorically prevent the submission of a request for the certification of a class action by workers in a workplace that is subject to a collective agreement. In cases in which the collective agreement does not comprise an enforcement and monitoring mechanism for workers’ rights, and the labor union is dysfunctional, i.e., it does not act to enforce the rights of the workers in practice, sec. 10 (3) will not constitute a bar to certification of the request for a class action. A collective agreement that is “on paper”, but that is not enforced in practice, is not sufficient to constitute a bar to the initiation of a class action under sec. 10 (3). A collective agreement that is a dead letter, and a labor union that is no more than a fig leaf that hides an actual failure to protect workers’ rights are insufficient. In such cases, one cannot claim that the collective agreement regulates labor relations, and therefore the request to certify the class action may be granted. Below, we shall discuss in greater detail the cases in which the conduct of a labor union will be deemed actual regulation of labor relations (in the framework of the discussion of the “second order” question).

77.       This construction of sec. 10 (3) will prevent situations in which a worker will find himself in a “catch-22” in which his rights and those of his fellow workers are neither protected nor respected, but he is unable to act because he is subject to a labor union for good and for ill. In such circumstances, in which the collective agreement is not worth the paper it is written on, as neither the union nor the employer act to enforce it, we must say that there is no “collective agreement that regulates the terms of his employment”, and the exception established under sec. 10 (3) of Schedule Two does not apply.

78.       This conclusion thus approves the fundamental approach adopted in the Viron case, which has served as the basis for the decisions of the National Labor Court in subsequent cases, as well. What this means is that when a labor union does not act to enforce the infringed rights of workers, the bar established by sec. 10 (3) of Schedule Two is removed. In such cases, the labor court’s discretion does not relate to the question of whether the exception established under sec. 10 (3) is met, but only to the fulfilment of the other conditions established by sec. 8 of the Class Actions Law for the purpose of certifying such a suit.

 

Answer to the “Second Order” Question: The Scope of Incidence of Section 10 (3) in relation to the Question of what Constitutes an Active Labor Union

79.       Examining the activity of a labor union – in light of the above, when a request to certify a class action is submitted, the question that the labor court must examine is whether the union is working to advance the rights of the workers, and whether that activity constitutes an effective means for enforcing the rights claimed in the suit. Such activity need not be optimal, but it must exist as more than a “display” of activity. Section 10 (3) is not meant to protect a labor union that shirks its responsibilities and power, and refuses to protect the rights of its members. The purpose of sec. 10 (3), which focuses upon the protection of the representative organization, evaporates when the labor union does not function. There is no reason or justification for protecting a union that does not do its job.

80.       The decision as to what constitutes such a situation is, of course, dependent upon the circumstances of each individual case. In general, in order to decide whether there is a collective agreement that “regulates” the labor relations, the labor court will have to examine whether the labor union acts to protect the workers’ rights. The court will have to consider the overall circumstances of the case, including: the characteristics of the particular industry; the existence or absence of systematic violations of workers’ rights; the type of rights infringed; the activity of the labor union (both in regard to the infringed rights and in general); the accessibility of the labor union for addressing particular complaints of workers, on the assumption that a functioning labor union must provide an active, efficient mechanism for addressing the complaints of the workers it represents, and for enforcing their rights; the general functioning of the labor union in regard to the protection of workers’ rights; the ability of the labor union to enforce workers’ rights in practice, such that they receive what they are entitled to from the employer; as well as the ability of the labor union to redress past violations, and not act solely prospectively.

81.       We would further note that it would be easier for the class-action plaintiff to show that a labor union is ineffective by specifying cases of other workers who did not receive an adequate response from the union in regard to the violation of their rights. As opposed to this, it would be easier for the labor union to show that it was active if it could point to concrete steps that it adopted in regard to the violated rights, show that there was an efficient, effective mechanism that enabled workers to voice their complaints and enforce their rights, and if it would supply data in regard to the complaints it successfully resolved (without need for an exhaustive list).

82.       In this regard, the distinction between obligatory rights and contract rights may be of importance – a distinction addressed by Klement & Rabin-Margalioth (para. 46 above) if not in the same manner. There is a presumption that a labor union is dysfunctional when it fails to act in protecting the obligatory, statutory rights of workers, inasmuch as the matter is not discretionary, and such rights cannot be waived. In such circumstances, there is no rationale for protecting the union, and there is no reason to prevent the certification of a class action brought by a worker. As opposed to this, when a union does not take action to protect a right that derives from an agreement, that failure to act does not necessarily imply that the union is not functioning properly. A union may justifiably refrain from acting from a broader perspective of labor relations with the employer and a desire to achieve some other goal in another aspect of those relations. Therefore, in such a case, the burden of proof is on the labor union in proceedings for the certification of a class action, and requires that it show that its inaction resulted from a discretionary decision. It is worth emphasizing that, at this stage, the labor court is not required to evaluate the wisdom of the union’s decision, i.e., whether it would have acted in the same manner as the union. There is also no need for an exhaustive examination in order to decide whether the labor union acted or failed to act to protect the workers’ rights, and whether such a failure to act was reasonable under the circumstances. As a rule, the labor court enjoys broad discretion in examining the matter and its circumstances in relating to the nature of the violated rights and the scope of their infringement. The labor court must gain an impression of whether the labor union considered the matter, the appropriate time to take action and the alternatives, and whether, in view of these considerations, it reached a decision that took the rights of the affected workers into account.

83.       Prior notice to the labor union for the purpose of examining its actions – An additional question that arises in this context is whether the class-action plaintiff must show that he gave advance notice to the labor union before requesting the certification of the class action, in order to allow the labor union to take the initiative in seeking a resolution of the dispute. The National Labor Court gave a resoundingly affirmative answer to this question in the Eyal case, in the course of developing its case law on the subject following the Viron decision. President N. Arad wrote in this regard:

“In light of these provisions, and in order to realize the objectives of the provisions of the Class Actions Law, when a class plaintiff intends to initiate class-action proceedings in an unionized workplace, it is proper that he first deliver written notice to the labor union of his intention to initiate a class action and its causes of action…Prior notice to the representative labor organization in the workplace is also required by the principles of fairness, efficiency and good faith in a unionized workplace, and it serves to further the provisions of the Class Actions Law in accordance  with their purpose…If the class plaintiff acts in such a manner, it is conceivable that the class action will become superfluous, or that it is subject to the restrictions established by the Law. In doing so, the prior notice will help clarify the possibility of initiating a class action under the circumstances, and afford the labor union an appropriate opportunity to consider its position on the dispute or prepare for its resolution. Alternatively, the presence of the labor union in the proceeding may allow for a more efficient examination, to the benefit of the parties and the public in general” (the Eyal case, paras. 13-14).

This principle was also emphasized in later decisions, particularly the Yashiev case, which was addressed by this Court (see the Yashiev case, para. 54 of the opinion of then Deputy President Y. Plitman, and para. 14 of the opinion of President N. Arad).

84.       The proceedings before the Court did not focus on the issue of prior notice to the labor union, but in practice it is inherent due to its influence upon the question of whether the labor union is functional. Applying to the labor union would appear to present a simple, efficient means for examining whether it is responsive to workers’ complaints in regard to the violation of their rights. In this regard, we are of the opinion that there is merit to the fundamental approach of the National Labor Court in the Eyal case in regard to the importance attributed to notification of the labor union. However, and in addition to that, we must address how that demand should be understood in the context of the current examination, i.e., in a class action regarding labor law in a unionized workplace.

85.       In examining this question, and before addressing the special considerations for submitting a class action in labor law, it is important that we view it in the broader context of the question debated in the legal literature as to whether a class-action plaintiff should be required to give the defendant prior notice. This question raises conflicting considerations. On its face, it would appear that such notice could lead to the resolution of the problem motivating the class action at an early stage and reduce litigations costs. However, as opposed to that, there is the fear that such notice will reveal the “idea” of the class action to others, and thereby harm not only the class-action plaintiff but also the general incentives to expose wrongdoings in order to submit class actions in their regard (for a comprehensive discussion of these considerations, see Chemi Ben Nun & Tal Havkin, “Should a Plaintiff be required to give notice to the Defendant before requesting Certification of a Class Action?” 12 Alei Mishpat (not yet published) (hereinafter: Ben Nun & Havkin)). Needless to say, this question is not before the Court. Indeed, this Court has recently held that, as a rule, prior notice should be given to the potential defendant in a class action when that defendant is a public authority (AAA 2978/13 Mei Hagalil – District Sewage Corporation Ltd. v. Younes (July 23, 2015) (hereinafter: the Mei Hagalil case)). However, that decision did not unequivocally decide the question of notice to a private defendant (see: ibid., paras 14 and 38 of the opinion of Deputy President E. Rubenstein). In any case, the question before the Court is different. We are not concerned with a potential defendant but rather with the particular question of prior notice to the labor union as opposed to a defendant. This question must be framed by different considerations, at least in part, than those relevant to notice to a potential defendant. In the instant case, we will limit ourselves to this question, alone. The purpose of giving notice to the labor union is to enlist its aid. Moreover, from the start, the legislature was guided by a preference for the enforcement of rights through the labor union, where an active labor union is operating in the workplace. Thus, insistence upon prior notice to the labor union realizes the legislative intent.

86.       In my opinion, in that light, and in view of the purpose of serving notice upon the labor union – notice that is intended to call it to action – that notice should be directed at enforcing the personal rights of the worker, as opposed to a specific warning of the intention to initiate a class action. The labor union is supposed to muster for action as a result of a worker’s complaint regarding a serious infringement of his rights, whether or not it has been “warned” of the possibility of a class action. On the contrary, it may be said that the true test of a union’s seriousness in enforcing workers’ rights is its response to a complaint that is not accompanied by an express statement of the possibility of a class action. Moreover, this approach mitigates the Principal-Agent Problem in regard to labor unions, inasmuch as the looming possibility of a class action in the event of a failure to act serves as an incentive to act for the enforcement of workers’ rights. As opposed to this, imposing a duty of notice of a class action may act as an incentive for the union to bide its time and wait until it is explicitly “threatened”. An additional advantage of such notice – that does not explicitly “wave the sword” of a class action – is that it mitigates the possibility of undermining the incentives to potential class-action plaintiffs (because it does not involve “publication” of the possibility of a class action, which might lead others to “steal the idea” (see: Ben Nun & Havkin, chap. 2 (1) (a)). However, although there is no need for a formal warning or notice of the intention to initiate a class action, a focused demand to enforce concrete rights, as opposed to some general request, is required. In other words, the class-action plaintiff must submit a specific complaint to the union, asking for the enforcement of rights that he claims were violated. However, in my view, serving the labor union formal warning or notice of an impending class action is not a precondition.

87.       I would further clarify that while a prior application to the labor union is required, that should clearly not create a possibility for a lengthy period of deliberation by the union as to the course of action it should adopt. The appropriate response time for the union is a matter that can be examined by the labor court, in light of the circumstances of each case. In considering the period of time that should be granted to the labor union prior to submitting the class action, some weight should be given to the question of whether we are concerned with a union that was “presently absent” in addressing workers’ rights in the workplace, and completely absent over a long period of years. In such a case, the union would have to prove that it “woke up”, and relatively very quickly set about protecting the rights of those workers it had ignored, in order to justify refraining from initiating a class action as a means for redressing those rights. Here, too, the distinction between obligatory and contractual rights is of importance. Where the enforcement of obligatory rights is concerned, the labor union must act relatively quickly, for as already noted, it does not enjoy discretion in regard to the enforcement of rights granted by law and that cannot be waived. As opposed to this, where contractual rights are concerned, it would seem appropriate that the union be granted a reasonable period to consider the matter against the background of its overall activity, upon the assumption that the enforcing of contractual rights may form part of a broader strategy within the collective framework. The reasonable length of time for such activity can be examined by the labor court in the context of the applicability of sec. 10 (3) of Schedule Two. We should emphasize that prior notice that leads to a purported display of activity to “shake off” the class action, should not shield it from examination in the framework of the interpretation of sec. 10 (3) of Schedule Two, a point we will more fully address below.

88.       The problem of the pretended awakening of the labor union, and the significance of enforcement agreements – In examining the activity of the labor union, even after prior notice has been served, it is important that we consider the possibility that although awakened to action, that awakening was merely ”pretended”. In this regard, it is necessary to examine what constitutes the “awakening” of a labor union, in a similar way to that for examining what constitutes an active labor union, which we considered above, and is directly related. Acting “as if” that does not provide every worker with an avenue for enforcing his rights in an easy and cost-free manner cannot be deemed an “awakening” of the labor union. It is not enough that the matter “is being handled” (see and compare: CA 3807/12 Ashdod City Center K.A. Ltd. v. Shimshon, para. 7 of my opinion (Jan. 22, 2015)). Such purported activity can occur in a number of ways. A specific instance of the phenomenon, that we have largely focused upon in this case, is action by the labor union in the form of signing or beginning to implement an enforcement agreement when it is as yet unclear whether such action has borne fruit from the perspective of the workers. In such a case, the specific question that arises is whether such activity is a sufficient response to the period prior to signing the enforcement agreement or to the commencing of its implementation. That is the question that arose most forcefully in the Yashiev case. According to the class-action plaintiffs, there is no certainty that the Enforcement Agreement of 2011 will actually result in the enforcement of workers’ rights, and all the more so in regard to events in the past. As opposed to this, the employers and the labor unions argue that when an enforcement agreement is in place, sec. 10 (3) of Schedule Two fully applies, as it can no longer be maintained that there is no “regulation” of the workers’ rights.

89.       It is our belief that there cannot be a comprehensive, fundamental answer to this question, but rather, the answer must be contextual, not only in regard to the concrete example of an enforcement agreement, but also in regard to other execution mechanisms that may be suggested for the enforcement of rights. In each case, we must ascertain whether the actions taken to enforce the workers’ rights actually constitute “regulation”, or whether they are nothing but continued non-enforcement in new clothes. The criteria for examining these questions were set out in secs. 79-82, above. In the context of an enforcement agreement, we might add that the labor court should consider whether the mechanism for the enforcement of workers’ rights makes it possible for every worker to enforce his rights easily and without cost (inasmuch as these are characteristics of enforcement in the class-action framework). In this regard, the examination should consider whether the complaints of workers of the specific company named in the class action were answered in all that regards the enforcement of their rights, whether the enforcement agreement also regulates the enforcement of rights that were infringed in the past, and is not limited to the prospective enforcement of rights, and whether the rights claimed in the class action are addressed in this framework. A step taken by a union for the enforcement of workers’ rights in the industry (whether an enforcement agreement or some other step) cannot be deemed to render class actions superfluous in that industry. In this context, the responses given to prior complaints to the union and the timeframes that the union is willing to set for enforcement are important factors in ensuring that the protection of workers’ rights will be achieved within a reasonable time. For that purpose, limitation-of–actions periods established in regard to labor rights can also be taken into consideration, and an inviolable upper limit can be established in each case (see, e.g., sec. 31 of the Annual Leave Law, 5711-1951, that establishes a three-year limitation of actions; sec. 17A of the Wage Protection Law, 5718-1958, that establishes various periods of limitation for delayed payment, dependent upon the circumstances, which run from sixty days to three years, as the case may be). Of course, this is merely an upper limit, and we should normally expect that the reasonable time for acting will be considerably less.

90.       The labor courts can, as may be needed, further develop tools for addressing the question of when an enforcement step will be deemed effective to the extent that it would prevent the submission of a class action. In the Yasheiv case, concerning the General Enforcement Agreement, Judge Rabinovich emphasized that it should be evaluated over time, and in light of its results. That is true for any other enforcement step. Just as the heading “enforcement agreement” or even the establishment of an “enforcement committee” are insufficient to categorically prevent class actions, so other obligations to enforce rights do not “inoculate” a union or an employer against class actions. Here as well, the purposive interpretation of sec. 10 (3) of the Class Actions Law requires a substantive examination of regulation in practice, together with the requirement of prior notice to the labor union that allows it to enforce those rights that the plaintiff seeks to redress by a class action.

The Answer to the “Third Order” Question: “Awakening of the Labor Union following the initiation of a Class Action

91.       Up to this point, we have considered the situation of a labor union that began to act before the request to certify a class action was filed. That is the optimal situation (relatively speaking) in a situation in which the labor union did nothing to enforce rights in the past, but mustered shortly after receiving a complaint. That is the purpose of giving prior notice to the labor union, and when it achieves its purpose, a class action is no longer needed. Of course, the test of whether the labor union acted to enforce those rights will be conducted in accordance with the criteria we set out in paras. 79-82, above. As we explained, should it be found that its action was “pretended”, that will not serve as a bar to the submission of a class action. That is, in effect, the situation that was examined in the Yashiev case. When the labor union “awakes” prior to the submission of the request to certify the class action, the question of the application of sec. 10 (3) will be examined in accordance with the enumerated criteria. However, we must further consider the question of what should occur when labor unions “awake” only after the request for certification of the class action is submitted. That question arose in the Buskilla case.

92.       The submission of a request for the certification of a class action is a step that may spur labor unions to greater action. In this regard, it is important that we distinguish two situations of “awakening”. One possibility is that the “threat” to its position may lead the existing representative labor organization to act where it had previously failed to do so. Another possibility is that a new labor union that had not previously operated in the workplace will identify a possibility to expand its activity, succeed in becoming the representative labor organization and sign a special collective agreement after the submission of the class action. In the Buskilla case, we see both of these possibilities occur at once. Only following the submission of the request to certify the class action in that case, did the Histadrut sign the General Enforcement agreement. And only following the submission of the request to certify the class action (and, in fact, only after its approval), did the Leumit Federation sign the Special Enforcement Agreement with Amishav.

93.       In the Buskilla case, the National Labor Court addressed only the General Enforcement Agreement (as the Special Enforcement Agreement had not yet come into being). The National Labor Court held that the General Enforcement Agreement did not have retroactive effect, and that the signing of enforcement agreements following the submission of a request to certify a class action could not be taken into account and did not apply to the rights claimed in it. Our approach is similar to that of the Labor Court, although not identical, as we shall explain.

94.       As a rule, we are of the opinion that the basic approach to steps by labor unions taken for the protection of workers’ rights after the submission of a request for the certification of a class action (when it has been submitted after a prior “exhaustion of remedies” with the labor union) must be that such steps should not prevent the certification of the class action under the provisions of sec. 10 (3) of Schedule Two. In other words, the restriction established by sec. 10 (3) should be examined in accordance with the situation in regard to the possibility of enforcing the claimed rights as it was on the day of the submission of the request. Viewing steps taken after the request to certify the class action as constituting a bar to certification might encourage deals between labor unions and employers that would not reflect a true intention to enforce workers’ rights, and in effect, allow them to replace the statutory bar with another. Moreover, such a practice might strike a fatal blow to the incentives for submitting class actions on behalf of workers. If class-action plaintiffs knew that their class actions might be frustrated at any moment by a subsequent awakening of a labor union, this might result in creating disincentives for vital class actions.

95.       Therefore, where enforcement steps commence after the filing of a request to certify a class action, the restriction established by sec. 10 (3) will not apply. However, this does not necessarily mean that class actions are the best and most efficient means for enforcing workers’ right from the perspective of the general tests established by the Class Actions Law. In other words, if the situation changes to the extent that the class action is no longer justified at the time of its certification, whether because a new union or the existing union is providing a full, effective response, then there may no longer be any need for it to proceed. If the labor court find that the union has presented an appropriate path for redressing the rights claimed in the class action, including past rights and the rights of former workers who no longer work for the employer, it can deny the request for certification when certifying the class action no longer constitutes the path that is “efficient and just for resolving the dispute”, as stated in sec. 8 (a) (2) of the Law (and not on the basis of the “primary” restriction of sec. 10 (3) of Schedule Two). In this framework, the labor court may weigh the advantages and disadvantages of conducting the proceeding as a class action. Effective collective action that ensures the redress of the claimed rights is a practical alternative for achieving the objectives of the class action (see: Alon Klement, “Guidelines for the Interpretation of the New Class Action Statute – 2006" 49 Hapraklit 131 (2006)). As explained in regard to prior notice to the labor union, the legislature expressed its view that collective action and class actions are alternative tools for the enforcement of rights. The late awakening of a labor union can be taken into account, in light of all the considerations noted, in considering the request of a class-action plaintiff to withdraw, or in the framework of a compromise agreement by the parties (see the Ben Shlomo case, in which the National Labor Court examined a proposed rights process that was submitted, and emphasized the need to reward the class-action plaintiff as a condition for approval of the process).

96.       We should reiterate that even in this context, the enforcement of rights – like the activity of the labor union – must be evaluated by its practical success, in accordance with the various considerations elaborated above. In addition, specific consideration is required in regard to the particular question of whether the labor union is providing redress for the rights of former workers who no longer work for the employer. It may be assumed that such workers are not aware of the filing of the class action and of their right to demand the enforcement of their rights. They also do not pay union dues or service fees, and therefore, there is a fear that the union may, regrettably, see itself as less obligated to them. There may also be some doubt as to the ability of such former workers to apply for help in ascertaining their rights, even if there is an effective mechanism for such enquiries by current workers Therefore, to the extent that an employer or labor union argues against the certification of a class action, the labor court will have to examine carefully whether such enforcement steps provide a comprehensive response to the rights claimed by current and former employees as one. We are certain that the National Labor Court will develop guidelines for this examination.

97.       It should be noted that, as a rule, a distinction should be drawn between the enforcement steps undertaken by an existing labor union and those of a new union that “enters” the workplace following the class action. In the latter case, when a new union presents a collective agreement that is meant to serve as grounds for denying the class action, the said collective agreement must be examined carefully in order to remove the suspicion that its purpose is solely to remove the threat of the class action, as well as to make sure that the agreement also covers former workers who may “fall between the cracks”, and not benefit from the new agreement.

98.       We should further add that when a union’s awakening after the filing of a class action prevents the class action from proceeding – in all of the “paths” delineated above – the court must make sure that the class-action plaintiff and his attorney receive an award sufficient to protect the incentives for filing the class action that, in practice, brought about that “awakening” (see: sec. 22 (3) (1) of the Class Actions Law;  CA 1834/07 Keren v. Dan Region Tax Assessment Officer, para. 25 (Aug. 12, 2012)).

From Theory to the Practice

99.       It is now time to put the principles delineated above into practice in regard to the instant petitions.

100.     The petition in the Viron case concerned a case in which the class action was directed at a persistent, systematic violation of workers’ rights in an industry characterized by low-wage workers with limited ability to act collectively. It concerned an industry in which wages are not high, and it is, therefore, possible that there is little incentive for an individual worker to demand his rights. Moreover, it is in industry in which the workers are scattered among various security points and do not spend much time together, which impedes the possibility of organizing. In such circumstances in which the labor union was long aware that the collective agreement had become a dead letter, and that the basic rights of the workers had not been protected, yet nevertheless did not lift a finger to act for the workers’ benefit for reasons known only to itself and motives that do not fall within the prerogative granted it in the conduct of negotiations and the waiving of certain rights, such a union is not one that the Law sought to protect. Therefore, the National Labor Court correctly decided to certify the class action.

101.     The same is true for the Buskilla case. After the filing of the request for certification of the class action in this case, two collective agreements were signed – the General Enforcement Agreement with the Histadrut, and the Special Enforcement Agreement with the Leumit Federation. However, these agreements were signed only after the request was filed.  The General Enforcement Agreement, which at the times relevant to the National Labor Court’s decision, applied to all the employers included in the proceedings, was signed only after the request was filed, and the Labor Court found that it did not apply retroactively, such that it did not provide for the rights of the workers during the periods relevant to the filing of the suit. The Special Enforcement Agreement – whose effect was argued by the Leumit Federation – was signed only after the National Labor Court had rendered judgment. In such a case, as we have already explained, the restriction established by sec. 10 (3) does not apply, inasmuch as we are concerned with arguments that are based upon events subsequent to the filing of the class action, which raise the fear of excessively deterring the filing of class actions that serve as a catalyst to hastening labor unions to act for the protection of unempowered workers. That, of course, is the case unless the said events make it possible to redress of the violations grounding the class action retroactively. The National Labor Court did not find that to be so in the specific case, and we see no reason to intervene in that finding.

102.     In the end, and not without second thoughts, we did not find reason to intervene in the decision of the Labor Court in the Yashiev case. While in the Buskilla case, the National Labor Court found that the General Enforcement Agreement did not apply retroactively, in the Yashiev case, the National Labor Court (adopting the opinion of the District Labor Court) held that the agreement provided sufficient response to the rights claimed by the workers, even though their claims dated back to 2004, seven years prior to the signing of the General Enforcement Agreement and the filing of the class action. This change in the National Labor Court’s approach to the effect of the General Enforcement Agreement of 2011 on past rights would appear to raise questions. However, the Yashiev decision focused upon the facts as they appeared at the time to the National Labor Court, and the Histadrut’s actual enforcement of the rights that grounded the class action. Under the circumstances, we see no reason to intervene in those specific findings. First, we are also of the opinion that weight should be given to the finding that the class-action plaintiff made no application to the labor union, a fact that weighs against him. In addition, the Histadrut demonstrated before the National Labor Court how enforcement had commenced on the basis of the General Enforcement Agreement, and the National Labor Court gained the impression that it was well underway and that it was efficient and effective both in terms of the sample audit carried out, and the in-depth audits of the various employers in the security industry. As noted, the Histadrut also demonstrated before the National Labor Court the manner in which the specific cause of action in the Yashiev matter was being addressed, namely, the employer’s payments to the pension fund in that matter. We agree with the fundamental approach that requires not only the making of enforcement agreements but also there actual execution. Actually, in our view, the important test is whether the workers’ rights are enforced by the labor union, and not the precise mechanism that serves that purpose. We also agree with the opinion of Judge Rabinovich in the Yashiev case that the test must be contextual, examining the results of enforcement over time. As we have already stated, we do not find it appropriate, at this stage, to intervene in the factual findings in the Yashiev case, which were based upon the actions of the Histadrut in regard to the subjects addressed by the class action (and not only in regard to the general provisions established by the Enforcement Agreement). However, we would note that every enforcement agreement, including the General Enforcement Agreement of 2011, which was addressed in the Yashiev case, must be evaluated on the basis of its actual results in each case. More generally, the question of whether the Enforcement Agreement constitutes a bar to the certification of a class action must be weighed in light of all the stated considerations, including the actual execution of the relevant enforcement agreement at the times relevant to the request – and also in regard to the specific employer – in regard to the claimed rights. In light of the delineated considerations, the labor union may be requested to submit its activity in regard to the General Enforcement Agreement to further scrutiny. If that activity prove unsatisfactory, the request for a class action may be reinstated.

103.     It is important to reiterate that concluding an enforcement agreement (or taking any other step “on paper”) is not enough. The root of the problem in all the proceedings before the Court is the creation of enforcement agreements that left the workers unprotected in practice. As we noted, in the future, in this regard, the labor court will have to take into consideration the complaint mechanism that the enforcement agreement provides the workers, whether complaints in regard to violations of rights are addressed in practice, and the time period required for the union to respond to such complaints. It is also important that we reiterate that in order for an enforcement regime – including an enforcement agreement – to be deemed an appropriate substitute for class actions, it is not enough that it comprise a “sample” enforcement regime. Rather, it must present a means by which the class-action plaintiff, or any other worker, can seek redress even before his workplace comes up in the sample-audit lottery. It should be superfluous to note that the application of these principles in these cases is not within the usual purview of this Court, and should be left to the the judgment of the labor courts. We are confident that the National Labor Court will continue to develop its case law in this matter, in examining the relevant enforcement agreements and their success in meeting the tests of time and reality, and with due regard for the objectives of sec. 10 (3) of Schedule Two.

Comments and Answers

104.     At this juncture, I have had the opportunity to read the opinion of my colleague Justice H. Melcer. My colleague concurs with the principles I have set out in regard to the interpretation of sec. 10 (3) of Schedule Two, according to which the submission of a class action in labor law should not be precluded when the labor union fails in its duty to represent workers whose rights have been violated. However, my colleague adopts a somewhat different approach in regard to two aspects related to the application of those principles, both in regard to the method for serving notice upon the labor union prior to filing a class action, and in regard to the applicability of sec. 10 (3) to the violation of obligatory labor rights, as opposed to rights granted under a collective agreement. The common denominator of our respective views is greater than the differences between them. Although the practical import of the difference is limited, and relates solely to the form of the notice, I would like to clarify my position in regard to these two matters.

105.     The form of the notice to the labor union – My colleague is of the opinion that in order to prepare the groundwork for filing a class action, the notice served upon the labor union cannot be a “usual” request for help in securing the personal rights of the worker. In his opinion, there is need of a formal notice that clearly states the intention to file a class action, and that reserves the right to do so if the complaint is not appropriately addressed within a reasonable time. My colleague explains that such notice is required by the good-faith doctrine, and accords with the opinion of this Court in the Mei Hagalil case, cited above in para. 85 (which treated of the need to give prior notice to an administrative agency expected to be a defendant in a class action). I hold a different opinion in this regard. The prior notice in the instant matter is directed at the labor union rather than the defendant employer, and is intended to serve as a true test of whether the union actually acts to defend the rights of the workers. In this regard, I believe that insisting that the notice include a warning that an unsatisfactory response will result in a class action misses the point of the notice – an authentic test of the daily operation of the union, even when not “warned”. Moreover, my colleague’s approach might result in the union having no incentive to protect the rights of unempowered workers when it knows that as long as it has not been “warned” of an intention to initiate a class action, there is no danger of the undermining of its status as the defender of workers’ rights, even when it does not actually do so. Moreover, it should be our objective that the relationship between a worker and a labor union not be “lawyered up” to the point that a workers’ request that the union come to his defense require a formal notice of the type described by my colleague in order for it to have practical effect for the purpose of filing a class action. I do not think that my colleague’s approach is required by the good-faith doctrine. On the contrary, it may be said that the union’s duty to act faithfully and diligently on behalf of the workers it represents supports the view that there be a price for its neglect even when it is not warned of the consequences. Lastly, I would emphasize that a distinction should be drawn between prior notice to a defendant in a class action – as addressed in the Mei Hagalil case in regard to a defendant that is a public agency, and that does not arise in the instant case (and, thus, need not be addressed) – and the question before the Court regarding a notice intended to test the performance of a labor union that is not the defendant in the class action.

106.     The question of the distinction between rights deriving from a collective agreement and obligatory rights – My colleague argues that sec. 10 (3) of Schedule Two should be understood such that the limitation it places upon class actions apply solely to violations of rights under a collective agreement, as opposed to class actions directed at violations of obligatory rights granted to workers by shield laws. Here, too, I disagree, although, as I explained above, I too am of the opinion that there is practical significance to the nature of the right that the labor union fails to enforce. Obligatory rights are rights over which there is no discretion as to their strict enforcement. Therefore, as I explained (para. 82 above), where a complaint to the labor union does not prompt immediate action, there is a presumption that the union is not acting to protect workers’ rights, and the road to a class action is paved. In such circumstances, there is no need to “threaten” the initiation of a class action. Rather, as already explained, I hold the contrary opinion. As opposed to this, when we are concerned with a violation of rights deriving from a collective agreement, the labor union may have greater discretion as to its course of action vis-à-vis the employer. However, I believe that sec. 10 (3) was intended to preserve the status of the labor union as a significant actor in a workplace subject to a collective agreement regarding workers’ rights. Holding that the labor union has no standing with the employer in regard to the violation of obligatory rights, and that there is no need to serve it notice prior to filing a class action, may unnecessarily undermine the union’s status, and ultimately harm the workers themselves. Indeed, in many respects, the disagreements between my colleague and myself on this point are only of theoretical interest rather than practical import, as even he believes that prior notice must be served upon the union in regard to a violation of obligatory rights, before filing a class action. However, in principle, I see a problem with my colleague’s assertion that even though he believes that sec. 10 (3) does not apply ab initio to a violation of obligatory rights, a class action cannot proceed without prior notice to the labor union. As I explained above, notice to the union is required in order to “clear the hurdle” presented by sec. 10 (3) (i.e., in order to test whether workers’ rights are “regulated”). It is not prior notice to a potential defendant. In any event, if the workers’ request for the enforcement of his obligatory rights is not addressed within a reasonable period of time, then, in my opinion, the limitation established by sec. 10 (3) would not apply. I state all this only for clarification, inasmuch as I do not believe that there is any practical significance to the difference of opinion on this point.

Before Concluding

107.     The advantage of the interpretation we have found to be appropriate for sec. 10 (3) of Schedule Two, in general, becomes clear in light of the history of the enforcement of workers’ rights in the security industry, and of unempowered workers in the secondary market in general. The history revealed by the cases adjudicated in the security industry shows that the labor unions did not act for the benefit of workers whose rights were violated over the course of years, and that they awoke only late in the game, after a number of requests were filed for the certification of class actions in the industry.

108.     In a broader historical view, one might add that the maintaining of the status of labor unions, which is of considerable importance, is dependent, first and foremost, upon the unions themselves. A review of the annals of the defense of workers’ rights shows that the particular challenge presented by defense of the rights of unempowered classes of workers is nothing new, and concerned the leaders of the labor movement from its earliest days. In 1934, Berl Kaztnelson wrote the following:

“I therefore see the purpose of our professional struggle in times of economic boom not in strengthening the bargaining power of the privileged sectors of the labor force, who are the first to benefit from the economic circumstances, but rather in the ongoing concern for the weakest, most overlooked strata of society that are the first to suffer the hardships and bear the losses of booms, and the last to enjoy the benefits, and for whom every small improvement of their living and working conditions requires special exertion” (in:  Berl Katznelson,  Beit Avodah – A Collection of Essays on the Question of the Histadrut, 89, 99 (1965) (Hebrew)).

Yitzhak Tabenkin, one of the leaders of the Histadrut, wrote even more forcefully in 1955:

“Indeed, the trend to equality is steadily weakening in our Histadrut, and differentiation of status is growing. Let no one say that the Histadrut cannot act in this area. It does not have to accustom itself to the ‘strong’, to the ‘privileged’, and abandon the underprivileged to their own devices” (Yitzhak Tabenkin, “Toward a Renewal of the Values of the Histadrut,” in B’darkhei Hashlihut – A Selection of Comments on the Question of the Histadrut and the Labor Movement, 82, 86 (Avraham Tarshish & Aryeh Fialkov, eds. 1969) (Hebrew)).

It is only right and proper that sec. 10 (3) of Schedule Two of the Class Actions Law be given an interpretation that serves that important objective of protecting the weaker members of the workforce, and an interpretation that, as explained above, provides appropriate incentives for workers’ representatives in this regard.

109.     In light of all the above, the petitions are denied. The Petitioner in HCJ 1893/11, the Trade Association, will pay the costs of Respondent 2 in that petition, Yigal Viron, in the amount of NIS 30,000, and the costs of Respondent 5, Kav La’oved, in the amount of NIS 30,000. The Petitioner in HCJ 1965/11, Tevel, will bear the costs of Respondent 2 in that petition, Yigal Viron, in the amount of NIS 30,000, and the costs of Respondent 5, Kav La’oved, in the amount of NIS 15,000. The Petitioner in HCJ 9325/12, Amishav, will bear the costs of Respondents 2-4, the class action plaintiffs Ilan Buskilla, Sergei Zandel and Vlad Konstantinovsky, in the amount of NIS 15,000 each, and the costs of Kav La’oved in the amount of NIS 15,000. The Trade Association, which asked to join this petition, will bear the costs of the class-action plaintiffs Ilan Buskilla, Sergei Zandel and Vlad Konstantinovsky in the amount of NIS 10,000 each. Under the circumstances, we do not find it appropriate to assess costs against the Petitioner in HCJ 7644/13, the class-action plaintiff in that matter, German Yashiev.

 

                                                                                                            Justice

 

Justice H. Melcer:

1.         I concur with the result proposed by my colleague Justice D. Barak-Erez, and with the main points of her thoughtful, learned opinion.

2.         Due to the importance of the matter, I nevertheless feel the need to clarify certain points, and make a few comments on matters on which we somewhat differ. I will, therefore, set them out in order.

3.         Section 2 [Note to editor: this should be “3”] of the Class Actions Law, 5766-2006 (hereinafter: the Class Actions Law, or the Law) states in the matter at hand: “A class action shall be brought only as an action specified in Schedule Two”. Section 10 of the Second Schedule to the Class Actions Law, which is the focus of the petition, reads as follows:

“10.     (1)        A suit for a cause of action that is within the exclusive jurisdiction of a District Labor Court under section 24 (a) (1), (1A) or 3 of the Labor Courts Law, 5729-1969, provided that no relief is claimed for delayed pension, compensation for delayed wages or compensation for delayed severance pay under the provisions of sections 16, 17 or 20 of the Wage Protection Law, 5718-1958.

            (2)        A suit by a worker for a cause of action under section 6A of the Minimum Wage Law, 5747-1987, a suit by a worker for a cause of action under sections 2 and 3 of the Right to Work while Sitting Law, 5767-2007, or under the Employment of Employees by Manpower Contractors Law, 5756-1996.

            (3)        In this section –

‘Suit’—with the exception of a suit by a worker who is subject to a collective agreement that regulates the terms of his employment, and the employer of that worker, or a trade association of which it is a member, is a party to that collective agreement;

‘Collective Agreement – a collective agreement under the Collective Agreements Law, 5717-1957, or a written collective arrangement.”

3.         It seems to me that the question of the interpretation of sec. 10 (3) of Schedule Two of the Class Actions Law, 5766-2006, above, in regard to the possibility of initiating a class action for workers subject to a collective agreement as defined by the Law (i.e., including a written collective arrangement) is complex. It is all the more so when the issues before the court concern a (justified) change in the case law by the National Labor Court in the framework of LabA 629/07 Viron v. Tevel Security, Cleaning and Services Ltd. (Jan. 3, 2011) (hereinafter: the Viron case) per Judge Varda Viret-Livneh (with Judge Amiram Rabinovich and Public Representative Ilan Segev concurring with some reservations), as against the dissenting opinion of President Steve Adler and Labor Representative Mr. Shalom Habshush. We therefore heard these petitions as if an order nisi had been granted, and did not see fit to deny them simply on the basis of the rules under which this Court intervenes in the judgments of the National Labor Court, even though I see no reason to deviate from our basic approach on this subject, as explained by my colleague Justice Z. Zylbertal.

4.         I accept the proposition presented by my colleague (hereinafter: Proposition A) according to which when there is no action by the relevant labor union to enforce the violated rights of workers covered by a collective agreement as defined by the Law, the restriction set out in sec. 10 (3) of Schedule Two of the Law is removed. My reason for this is grounded primarily on the principle that we must guard the guards themselves.

            However, I am of the opinion that not only is sec. 10 (3) of Schedule Two inapplicable when we are concerned with a right that derives from a collective agreement, but also when we are concerned with obligatory rights deriving from labor shield laws (hereinafter: Proposition B). In this regard, I believe that we should adopt the view expressed by Professor Alon Klement and Professor Sharon Rabin-Margalioth in their important article, “Employment Class Actions: Did the Rules of the Game Change?” 31 Iyuney Mishpat, Tel Aviv University Law Journal 369 (2009) (Hebrew)) (hereinafter: Klement & Rabin-Margalioth) as they presented it, rather than as presented by my colleague in para. 82 of her opinion.

            To my way of thinking, this is required by the rules of purposive interpretation, otherwise the result would be that the very existence of a collective agreement as defined by the Law, would appear to preclude a class action even for a right that is not mentioned, or that does not derive from the collective agreement, as defined by the Law. This would be especially true for obligatory rights that cannot be stipulated or restricted even by a collective agreement. Any other view – if accepted – would limit access to the courts, which is a constitutional right (see: the sources cited in para. 14 of my opinion in CFH 5698/11 State of Israel v. Dirani (Jan. 15, 2015)) and would be contrary to the very purpose of law, which is meant to provide operative, effective relief to anyone whose rights are violated (see: Elisheva Barak-Ussoskin, “From the Heights of Nebo – Class Action and Labor Law: Can they exist together? In light of the Class Actions Law, 5766-2006,” Gabriel Bach Volume 577 (David Hahn et al, eds., 2011) (Hebrew); and cf. the persuasive dissent of Justice Kagan (Breyer and Ginsburg, JJ concurring) in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), that bears certain similarities to the legal issues before us, and see Imre Stephen Szalai, “More than Class Action Killers: the Impact of Concepcion and American Express on Employment Arbitration,” 35 Berkeley J. Emp. & Lab. L. 31 (2014), which strongly criticizes the majority opinion in the American Express case and its possible application to labor law).

5.         Recognizing that each of the above two propositions negates the exception established under sec. 10 (3) of Schedule Two of the Law is also consistent with the idea that exceptions should be narrowly construed (see: HCJ 4672/90 Ariel Electrical Engineering, Traffic Lights and Control Ltd. v. Haifa Municipality, 46 (3) IsrSC 267 (1992); HCJ 11088/05 Hayeb v. Israel Lands Administration (Aug. 19, 2010); LCA 3788/06 Yefet v. Yediot Aharonot Ltd. (Jan. 19, 2012)).

A somewhat similar idea that supports the merger of the two propositions that make the restriction an exception was raised by Moran Savorai in her article “The Purpose of Representation Mechanisms in Labor Law: The Class Action Mechanism versus the Traditional Tools of Collective Labor Law,” Elika [Note to editor: This should be “Elisheva”. “Elika” is the judge’s nickname] Barak- Ussoskin Volume 597 (2012) (Hebrew), for her own reasons.

 

6.         Therefore, in accordance with my approach, in the presence of either one of the above two propositions, the discretion granted the labor court does not extend to the question whether the exception under sec. 10 (3) of Schedule Two of the Law has been met, but only to the meeting of the other conditions set forth in sec. 8 of the Class Actions Law for the certification of a class action. The difference between my approach and that of my colleague is that while my colleague is of the opinion that this would hold only in regard to Proposition A (see: para 78 of her opinion),  I am of the opinion that this result is required both by Proposition A and by Proposition B. I am also of the opinion that there is no need for a “voir dire” or other separate, interim proceeding in regard to the applicability or inapplicability of the exception, but rather all of these questions can be addressed together in the course of deciding whether or not to certify the class action. That is what was done in the Viron case, and it is the accepted procedure in regard to the certification of class actions that do not concern labor law – see: LCA 8268/96 Reichart v. Shemesh, 55 (5) IsrSC 276, 290 (2001); and my opinion in LCA 5154/08 Kost Forer Gabbay & Kasierer, Accountants v. Kedmi (April 2, 2009), and the citations there.

7.         According to my colleague, before filing a class action and the request for its certification, the class-action plaintiff must first serve notice upon the representative labor union (see: paras. 85 and 86 of her opinion). While I agree, I do not accept the view that such notice must be directed solely at enforcing the personal rights of the worker, as opposed to a specific warning of the possible intention to file a class action. My colleague is of the opinion that there is no need to “warn” the labor union of a possible class action. In her view, the labor union should muster in response to a workers’ complaint of a serious infringement of his rights, whether or not it is “warned” of the possibility that the worker may file a class action (ibid., para. 86). In my opinion,  the labor union should be reminded of its duties and given a “first right” to act, while emphasizing that if it not act, the worker will be free to initiate a class action. I believe that the worker should also do so in regard to obligatory rights that derive from labor shield laws. In such matters, the union may, at times, act on behalf of the worker in accordance with explicit legal provisions (see, e.g: sec. 7 of the Minimum Wage Law, 5747-1958 [Note to editor: This should be “1987”]; sec. 28 (b) of the Wage Protection Law, 5718-1958; sec. 13B of the Employment of Women Law, 5714-1954), and it would appear that the union could also file a class action on the worker’s behalf under the combined provisions of secs. 3 and 4 (a) (3) of the Class Actions Law, as a possible alternative to declaring a labor dispute (in this regard, my view differs from that of Klement & Rabin-Margalioth, who argue that a labor union can only declare a labor dispute). In my opinion, the prior notice that the worker must send to the representative labor organization should comprise the following elements:

(a)        Details of the claimed violation by the employer.

(b)        A demand that the labor union take steps to enforce the worker’s rights.

(c)        An explanation emphasizing that if the labor union not act with due speed and diligence, it may be exposed to a suit for inadequate representation (in this regard, I agree with my colleague that the scope of that cause of action should be expanded).

(d)       Notice that the complainant reserves the right to file a class action against the employer if the union fails to act, or if its efforts do not bear fruit within a reasonable period of time (in this regard, I agree that a reasonable time before the limitation of actions comes into force is the “upper limit” of the waiting period before filing the class action, although it is possible that even if the worker does not do so before the limitation period expires, he will still have a cause of action for negligence against the labor union, jointly and severally with the cause of action for inadequate representation. And cf: CA 479/65 Wieder v. Gideon Harnoy, 20 (1) IsrSC 468 (1996)).

8.         In my opinion, the need to include all the above elements in the prior notice derives from the duty of good faith, and also reflects the balance that must be struck between the means that collective labor law places at the disposal of the labor union and recourse to class actions, which I believe is the default option in such cases.

            Moreover, in my view, this is also the conclusion to be drawn from this Court’s recent decision in AAA 2978/13 Mei Hagalil – District Sewage Corporation Ltd. v. Younes (July 23, 2015), for the many reasons elaborated there, mutatis mutandis to the instant case. It is also required for the purpose of the “scrutiny of the relevant factual and legal grounds” that must be carried out before requesting certification of a class action (see and compare: LAA 4303/12 Inslar v. Emek Hefer Regional Council (Jan. 22, 2012); and recently, LAA 582/15 Amit Yosha v. Hod Hasharon Municipality (Aug. 22, 2015)). Therefore, if the labor union is not made aware of the alternative of a class action, the potential class-action plaintiff may be placing an obstacle in the union’s path (as it may not know what it is expected to do), and may trip over it himself (if he is unaware of what the union may have done or intends to do, if anything).

            It would appear to me that the distinctions that my colleague suggests in these contexts are not consistent with the rationales that she gives in justification of Proposition A, which she presents in order to ground the dismissal of the barrier to class actions under sec. 10 (3) of Schedule Two of the Law. Moreover, following her approach, it is hard to identify how the presumption regarding the representative organization’s omissions in realizing obligatory rights would work if the worker is not required to specify what is stated above in para. 7, while explaining that the worker may act on his own if the union remains complacent.

9.         Therefore, subject to the above two reservations, which I believe to be significant for the protection of workers’ rights, I concur in the opinion of Justice D. Barak Erez.

                                                                                                                        Justice

 

Justice Z. Zylbertal

1.         I concur in my colleague Justice D. Barak-Erez’s comprehensive opinion, but would like to explain my view in regard to one aspect of the matter, and comment upon the points of disagreement between my colleagues.

            A discussion of the place of class actions in labor law, inter alia in view of the provisions of sec. 10 (3) of Schedule Two of the Class Actions Law, 5766-2006 (hereinafter: Schedule Two), requires that, first and foremost, we address considerations from the field of labor law, and collective labor law in particular, as my colleague’s opinion demonstrates. A significant part of the discussion focused upon the manner for ensuring the effective protection of the rights of unempowered workers, and the role of a representative labor organization in this campaign. Another question addressed was that of the most effective means for achieving those objectives, and what the consequences would be of strengthening the role of class actions in collective labor law. For that reason, and in addition to all that has been said by my colleague Justice D. Barak-Erez, I would like to stress that it would be most proper that the intervention of this Court in the decisions of the National Labor Court in the subject at hand be limited. This was stated more than once in regard to matters at the core of labor law and within the special expertise of the Labor Court. Inasmuch as the High Court of Justice does not hold appellate jurisdiction over the decisions of the National Labor Court, intervention in its decisions should be reserved for those relatively rare cases that concern a conspicuous, substantive legal error in an area of public, social or economic significance, and that resulted in an injustice that cannot be ignored. In other words: intervention should be reserved primarily to cases in which a substantive legal error is found in the decision, and justice requires the intercession of this Court in order to prevent a miscarriage of justice (HCJ 739/10 Anonymous v. Anonymous, paras. 8-11 (May 30, 2012), and the cases cited there).

            Indeed, as my colleague noted, it has been further held that another test for the intervention of this Court is the general, public importance of the problem, the scope of its attendant implications, or the fundamental nature of the issue raised. But it would seem that such is the case primarily when we are concerned with questions that affect legal issues that go beyond the scope of labor law. In my opinion, we must restrain ourselves from excessive intervention even – or, perhaps, especially – when we are concerned with original or precedent-setting decisions on broad issues firmly rooted in labor law. Even if there may be alternative approaches or solutions to those arrived at by the National Labor Court (although I agree with its decisions), the instant cases certainly are not examples of decisions that present a substantive legal error that caused a miscarriage of justice. Therefore, in my opinion, these petitions could have been denied on the basis of the guidelines governing the intervention of the High Court of Justice in the decisions of the National Labor Court.

2.         My colleagues presented a disagreement on two points: the content of the application to the labor union prior to filing a class action (must that application include notice of the intention to file a class action against the employer), and in regard to the distinction between the violation of obligatory rights deriving form shield laws and violations of rights deriving from a collective agreement in regard to the application of sec. 10 (3) of Schedule Two.

            These issues were not argued by the parties, and more importantly, no factual foundation, grounded in evidence submitted to the trial court, was laid. As a result, what my colleagues stated in their regard was largely obiter dicta and in the realm of academic theory.  In keeping with my view that this Court should act with restraint in regard to issues given to the jurisdiction of the labor courts, as sated above, I believe that we should refrain as much as possible from establishing rules in areas that have not yet passed through the “crucible” of the various instances of the labor courts, as it is best that the decisions of this Court be founded, first and foremost, upon approaches developed by the labor courts, which have special expertise and experience in the said field. This is all the more true when we are concerned with matters that are not founded upon factual foundations established by a duly constituted court. Or as aptly stated by President M. Naor, and as repeatedly expressed in the case law of this Court, “the law arises from the facts”:

“As Justice M. Naor has emphasized in hearings before this Court, ‘the law arises from the facts’. This statement reflects an axiom of the judicial task, grounded in the deeply rooted principal ex facto jus oritur [see: HCJ 7957/04 Marabeh v. Prime Minister of Israel, 60 (2) 477, 525 (2005)]. [Note to editor: This judgement appears in [2005] (2) IsrLR 106]  The desire to establish a particular legal rule cannot ignore the factual foundation of the case upon which the rule is developed” (CrimFH 5852/10 State of Israel v. Shemesh (Jan. 1, 2012), para. 3 of the opinion of Y. Danziger, J.).

Indeed, there is no Supreme Court case-law rule in regard to the questions addressed by my colleagues, and precisely for that reason, it is inappropriate that the Supreme Court express its binding opinion in this matter in the absence of a concrete factual foundation, and even to be the first to state its opinion, even before the labor courts have addressed these issues.

            Under these circumstances, I see no need to take a firm stand in the debate between my colleagues, and I will suffice in presenting the main points of my preliminary view, while stressing that the rule should properly be developed only after it is required in a proceeding in which the factual footings are laid out such that we may set our opinions, inter alia, upon that foundation.

3.         In sec. 10 (3) of Schedule Two, the legislature expressed its view that when labor relations are regulated by a collective agreement, a class action cannot proceed. Indeed, as my colleague Justice Barak-Erez explained, that provision should not be applied strictly, and when a labor union forsakes its duty to represent the workers whose rights were violated, a worker should be allowed to file a class action against his employer. In this, we have no disagreement. However, despite the door opened for initiating class actions, the starting point must, in my view, be the legislature’s fundamental view that prefers the resolution of labor disputes within the framework of collective labor relations, to the extent that they exist and function, as against the use of class actions.

            Therefore, I believe that, as a rule, and in order to realize the basic preference for resolving employee-employer disputes within the framework of collective labor relations, if the dispute falls within it, it is best to exhaust that framework to the extent possible before stating that it has failed and that the path has been paved for a class action. For this reason, I would expect that when a worker turns to the labor union with a request that it act in defense of his rights, he should also inform it of his intention to file a class action if the union not act as a union should in protecting its members. My colleague Justice Barak-Erez believes that in order to put the labor union to a “true test” and ascertain whether it acts to defend workers’ rights in practice, such a “threat” of a class action against the employer should not be included in the notice sent to the union. My colleague is also of the opinion that requiring such a warning of the intention to file a class action would result in the union not having an incentive to defend the rights of unempowered workers who do not intend to initiate class actions. These are practical concerns that I do not take lightly. However, I believe that for the present, before such possible scenarios have been brought to light in an actual case, against a factual background, the starting point must be the full disclosure of all the intentions of the worker applying to the labor union, in order to fully realize the basic approach of the legislature that where there are collective labor relations, it is preferable that disputes be resolved in that framework. In that framework, all cards should be on the table as long as it has not been proved that such a course will lead to real harm to the worker, such as to justify deviating from the principal established in sec. 10 (3) of the Schedule. Should it transpire, as my colleague expects, that this approach – which my colleague Justice Melcer addressed at length, and for which he brought additional support – will result in some “failure” that must be corrected, then we can revisit the said approach.

4.         As for the second issue disputed by my colleagues, I prefer the approach of my colleague Justice Barak-Erez. This, in particular, where my colleague Justice Melcer believes that even in the case of a violation of an obligatory right deriving from shield laws, the worker must first turn to the labor union before filing a class action, and must even give prior notice of his intention to file such an action. As noted, there is barely any practical difference between the two approaches. However, it seems to me that the approach of Justice Barak-Erez better expresses the legislative intent in regard to the place of class actions where there are collective labor relations. Here, too, it would be best to allow the case law to develop, and leave it flexible. If it transpire that the difference in approach expressed by my colleagues has real consequences, or that ensuring true protection of workers’ rights requires it, then we shall be free to revisit the issue, first in the district labor courts – on the basis of factual findings – and then in the National Labor Court. But not first in this Court.

                                                                                                                        Justice

 

The petitions are therefore denied.

Given this 15th of Elul 5775 (Aug. 30, 2015).

 

Justice                                     Justice                                     Justice                                                                           

 

[1] Translator’s note: A “collective arrangement” is a labor agreement that does not meet the statutory requirements of the Collective Agreements Law.

[2] Translator’s note: An “extension order” is a ministerial order extending some or all the provisions of a collective agreement to other classes of workers or employers not party to the original agreement.

[3] Translator’s note: A “representative organization” is defined under the Collective Agreements Law, 5717-1957. For the purpose of a general collective agreement, a representative organization is the employees’ organization that comprises the greatest number of organized employees covered by the collective agreement. For the purpose of a special collective agreement, a representative organization is the employees’ organization comprising or representing the greatest number of organized employees covered by the agreement, provided that it comprises or represents at least one third of the total number of workers to be covered by the agreement.

Zozal v. Israel Prison Service Commissioner

Case/docket number: 
HCJ 1268/09
Date Decided: 
Monday, August 27, 2012
Decision Type: 
Original
Abstract: 

Facts: The petitioner began working at the Israel Prison Service (“the IPS”) in 1986. In April of 2009, two months after her fifty-seventh birthday, she was forced to retire. At this age, she was already six months past what was defined in the Civil Service Retirement Law, 5730-1970, as the “retirement age for IPS wardens.” According to the IPS procedures relating to IPS employees of her age and experience, her continued employment after that age was dependent on approval by the IPS Commissioner (following a recommendation made by an internal committee). Such extensions of employment past the “retirement age for IPS wardens” could not be granted for more than one year at a time, and could not be granted for a total of more than three years or for any period past the age of 60, except in exceptional circumstances. The mandatory retirement age established by law for civil servants except IPS employees and police officers was (and is) 67, and retirement can only be forced at an earlier age if the Civil Service Commissioner is persuaded by the worker’s supervisor that the worker is no longer fit to serve in his position, in a proceeding initiated by the supervisor. The petitioner argued that the internal IPS procedures pursuant to which she was ultimately forced to retire at the age of 57 were discriminatory and unlawful. She also argued that the IPS Commissioner’s claim that her retirement was part of an overall agency policy eliminating her particular rank was false.

 

Justice Hayut, with Vice President (emeritus) Rivlin, Vice President Naor and Justices Danziger, Hendel and Fogelman concurring: The retirement arrangement established for IPS wardens, which stipulates, as its starting presumption, that wardens (with at least ten years of service) must retire at the age of 57 unless specific extensions are granted, must be struck down. The retirement arrangement wrongfully discriminates between IPS workers (at least those who serve in professional positions), on the one hand, and all civil servants holding similar positions, on the other hand.

 

The respondent did not prove the necessity of this starting presumption or the difference between this arrangement and the practice followed by the civil service. The discrimination caused by the IPS procedure was particularly pronounced with respect to professional and managerial employees. Although it might have been argued that IPS workers who hold “operational” positions experience “burnout” in their jobs at an earlier age than do other civil servants, that issue could have been handled through an optional earlier retirement age. There is certainly no justification for mandatory retirement at the age of 57, for those holding professional and managerial positions.

 

With respect to the petitioner’s particular case, the respondent argued that the main reason for his failure to extend her employment was not her age but rather an IPS policy of phasing out the rank that she held at the time. However, even if this argument is accepted as a factual matter, this consideration cannot serve as the determinative factor relied upon in the decision to force her into early retirement.

 

Thus, to the extent that it relates to IPS workers serving in professional and managerial positions, the internal IPS procedure must be set aside, but the IPS will be allowed a one-year period to prepare a new, non-discriminatory arrangement. The decision regarding the petitioner’s own forced retirement is revoked and she is to be reinstated at the IPS under the same terms as before her retirement, in accordance with current IPS needs.

 

Justice Joubran, concurring in part and dissenting in part, found that the IPS retirement procedure was reasonable and should, as a whole, stand. In general, once the legislature had established that IPS and Israel Police workers could have different retirement arrangements than other civil servants, the Court cannot determine that the IPS arrangement established by the statutorily authorized IPS Commissioner is unreasonable only because it is different than the civil service procedure.  Furthermore, mandatory retirement is a theoretically reasonable form of administrative discrimination, because of the public interests that it serves. However, certain aspects of the IPS procedure – specifically the granting of extensions for only one year at a time and the provision prohibiting extensions past the age of 60 except in very exceptional circumstances – had no rational basis and were therefore disproportionate. Furthermore, in the petitioner’s specific case, the respondent had shown that the IPS’ own internal procedure had not been followed, that the criteria for evaluating an application for extended employment had not been applied and that the petitioner’s employment was terminated only because the IPS wished to phase out her rank. Since the respondent had not shown that younger workers with the same “undesirable” rank were also dismissed, it was clear that the decision to force the petitioner’s retirement was based entirely on her age; in this specific case, such age-based discrimination had no rational justification.

Voting Justices: 
Primary Author
majority opinion
Author
concurrence
majority opinion
Author
concurrence
Author
concurrence
Author
concurrence
Author
concurrence
Full text of the opinion: 

 

HCJ 1268/09

 

Leah Zozal

 

 

v.

 

Israel Prison Service Commissioner

 

 

 

The Supreme Court Sitting as the High Court of Justice

[28 February 2012]

 

Before Vice President (Emeritus) E. Rivlin, Vice President M. Naor

and Justices S. Joubran, E. Hayut, Y. Danziger, N. Hendel and U. Vogelman

 

Facts: The petitioner began working at the Israel Prison Service (“the IPS”) in 1986. In April of 2009, two months after her fifty-seventh birthday, she was forced to retire. At this age, she was already six months past what was defined in the Civil Service Retirement Law, 5730-1970, as the “retirement age for IPS wardens.” According to the IPS procedures relating to IPS employees of her age and experience, her continued employment after that age was dependent on approval by the IPS Commissioner (following a recommendation made by an internal committee). Such extensions of employment past the “retirement age for IPS wardens” could not be granted for more than one year at a time, and could not be granted for a total of more than three years or for any period past the age of 60, except in exceptional circumstances. The mandatory retirement age established by law for civil servants except IPS employees and police officers was (and is) 67, and retirement can only be forced at an earlier age if the Civil Service Commissioner is persuaded by the worker’s supervisor that the worker is no longer fit to serve in his position, in a proceeding initiated by the supervisor. The petitioner argued that the internal IPS procedures pursuant to which she was ultimately forced to retire at the age of 57 were discriminatory and unlawful. She also argued that the IPS Commissioner’s claim that her retirement was part of an overall agency policy eliminating her particular rank was false.

Justice Hayut, with Vice President (emeritus) Rivlin, Vice President Naor and Justices Danziger, Hendel and Fogelman concurring: The retirement arrangement established for IPS wardens, which stipulates, as its starting presumption, that wardens (with at least ten years of service) must retire at the age of 57 unless specific extensions are granted, must be struck down. The retirement arrangement wrongfully discriminates between IPS workers (at least those who serve in professional positions), on the one hand, and all civil servants holding similar positions, on the other hand.

 

The respondent did not prove the necessity of this starting presumption or the difference between this arrangement and the practice followed by the civil service. The discrimination caused by the IPS procedure was particularly pronounced with respect to professional and managerial employees. Although it might have been argued that IPS workers who hold “operational” positions experience “burnout” in their jobs at an earlier age than do other civil servants, that issue could have been handled through an optional earlier retirement age. There is certainly no justification for mandatory retirement at the age of 57, for those holding professional and managerial positions.

With respect to the petitioner’s particular case, the respondent argued that the main reason for his failure to extend her employment was not her age but rather an IPS policy of phasing out the rank that she held at the time. However, even if this argument is accepted as a factual matter, this consideration cannot serve as the determinative factor relied upon in the decision to force her into early retirement.

Thus, to the extent that it relates to IPS workers serving in professional and managerial positions, the internal IPS procedure must be set aside, but the IPS will be allowed a one-year period to prepare a new, non-discriminatory arrangement. The decision regarding the petitioner’s own forced retirement is revoked and she is to be reinstated at the IPS under the same terms as before her retirement, in accordance with current IPS needs.

Justice Joubran, concurring in part and dissenting in part, found that the IPS retirement procedure was reasonable and should, as a whole, stand. In general, once the legislature had established that IPS and Israel Police workers could have different retirement arrangements than other civil servants, the Court cannot determine that the IPS arrangement established by the statutorily authorized IPS Commissioner is unreasonable only because it is different than the civil service procedure.  Furthermore, mandatory retirement is a theoretically reasonable form of administrative discrimination, because of the public interests that it serves. However, certain aspects of the IPS procedure – specifically the granting of extensions for only one year at a time and the provision prohibiting extensions past the age of 60 except in very exceptional circumstances – had no rational basis and were therefore disproportionate. Furthermore, in the petitioner’s specific case, the respondent had shown that the IPS’ own internal procedure had not been followed, that the criteria for evaluating an application for extended employment had not been applied and that the petitioner’s employment was terminated only because the IPS wished to phase out her rank. Since the respondent had not shown that younger workers with the same “undesirable” rank were also dismissed, it was clear that the decision to force the petitioner’s retirement was based entirely on her age; in this specific case, such age-based discrimination had no rational justification.

 

Petition for an order nisi.

 

For the Petitioner: M. Aviram

For the Respondent: M. Sasson                   

 

JUDGMENT

 

Justice E. Hayut

The petitioner, Leah Zozal (hereinafter: “Zozal”) served in the Israel Prison Service (hereinafter: “the IPS”) since 1986, and in April 2009 she was forced to retire. Her age at the time was 57 years and two months, six months older than the “retirement age for a prison warden” as defined in the Civil Service (Retirement) Law [Consolidated Version], 5730-1970 (hereinafter: “the Retirement Law”). In the petition before us, Zozal claimed that the procedures pursuant to which she was forced to retire are invalid, and should be abolished. She also claimed that there were defects in the manner in which the decision regarding her matter was reached.

Before we set out the facts that are relevant to Zozal’s case, we will note, briefly, the normative framework relating to the petition.

The Normative Framework

1.    Section 3 of the Retirement Age Law, 5764-2004 (hereinafter: “the Retirement Age Law”), applicable to all employees in the country, establishes the retirement age at which male and female workers may retire. That age is 67 for men and 62 for women (although the retirement age for women is subject to the provisions of Chapter D of the Law). Section 4 provides that an employer may compel a worker to retire at age 67 (hereinafter: “the mandatory retirement age”), and s. 5 further provides that when a worker of either gender reaches the age of 60, which is defined in the Retirement Law as the “early retirement age,” they may retire due to their age and receive a pension, although the amount of the pension will be reduced, due to the early retirement. Alongside this arrangement, which, as stated, applies to all workers in the country, the Retirement Law establishes a specific arrangement concerning the retirement and pension of civil servants.

Section 18(a) of the Retirement Law provides as follows:

‘If a worker has served at least ten years, the service commissioner may decide to retire him if the worker has reached the age of 60 and he is required to do so at the end of the month in which the worker reaches the age of 65; but the service commissioner may, with the approval of the service committee and with the consent of the worker, allow the worker to continue to be employed beyond the age of 65 for a period that shall not exceed the period that he will determine, if it is proved to the satisfaction of the service committee that the worker is capable of continuing to work in his job.’

Section 73 of the Retirement Law excludes policemen from the coverage of the above-mentioned s. 18, and s. 81 of the Retirement Law applies the exclusionary provisions in s. 73 to prison wardens as well.

Section 73 provides as follows:

‘Section 18 shall not apply to a policeman, but if a policeman has served at least ten years, the police commissioner may order his retirement, if the policeman has reached the age of 55.’

“The retirement age for a policeman” is defined in s. 69A of the Retirement Law as “the age established for him, in accordance with the month of his birth, in Part B of the Second Schedule.” Part B of the Second Schedule of the Retirement Law provides that the retirement age for a police officer falls within a range that begins at age 55 and continues to age 57, depending on the month and year of the particular police officer’s birth.

2.  On the basis of these provisions, the IPS and the Israel Police have adopted internal procedures which establish a uniform retirement age – subject to certain exceptions – for police officers and wardens who have served at least ten years in their respective services. At first the uniform retirement age was set at 55, but it was gradually raised to 57 years after the Retirement Age Law was enacted. Three petitions were already pending before a full panel of this Court by the time the Retirement Age Law was enacted; these petitions challenged the arrangement that created a uniform retirement age for the IPS and the Israel Police. They were decided together, in HCJ 10076/92 Rosenbaum v. Israel Prison Service Commissioner [2006] IsrSC 61(3) 857. Although these petitions were decided after the uniform age established in those arrangements was changed (from 55 to 57, as stated), the Court believed that this change did not have any substantive consequences for the decision that it had reached regarding the petitions – a decision that involved an analysis of the disparity between the retirement age in the civil service, on the one hand, and the retirement age for the IPS and for the Israel Police, on the other.

Finding that the relevant peer group in this context was the group of all civil servants, the Court held, on December 12, 2006, that the respondents in Rosenbaum:

‘have not succeeded in persuading us that a uniform retirement age, which is ten years lower than the retirement age in the rest of the civil service, is required by the ‘nature or character’ of all the jobs or positions in the prison service or the Police’ (p. 874).     

The Court went on to note that no relevant foundation had been presented to support the establishment of 55 or 57 as the retirement age for the IPS or the Israel Police; that the respondents had not shown that any effort had been made to create a mechanism for setting the retirement age on the basis of individual characteristics, or on the basis of the types of jobs or positions within the IPS or the Israel Police; and that the stark difference – ten years – between the age established as the uniform retirement age for the IPS and the Israel Police, on the one hand, and the retirement age for the civil service, on the other hand, could not be ignored. The Court also held that the respondents had not proven that “the distinction that the State made between its employees is required by the character or nature of the jobs or positions in the prison service or the police” and that they had adopted “an extreme, disproportionate and unreasonable approach” in determining a uniform retirement age which is ten years lower than the age of retirement in the civil service, without sufficient and convincing evidentiary basis justifying that determination. For this reason, the Court concluded that “the retirement policy practiced in the prison service and the police is unlawful” and ordered the setting aside of the internal practice according to which a uniform mandatory retirement age of 55 (or 57) was set for all police officers or prison workers who had served at least ten years. Because of the complexity of the matter, the Court also directed that declaring the arrangement void should not take effect until eighteen months after the decision was rendered, so that the respondents could work to establish new retirement procedures during the interim period.

3.  Following the Rosenbaum decision, the IPS and Israel Police established new arrangements. We will focus on the arrangements implemented by the IPS, as those are the arrangements that are the subject of this petition. At first, during the course of 2007, the IPS established Procedure 03-5007, entitled “Consideration of the Extension of the Service of a Warden who is of Retirement Age” (hereinafter: “the Service Extension Procedure” or “the Procedure”), and on 8 March 2009 this procedure was absorbed, with certain changes, into Commissioner’s Order 02.33.00 “Consideration of Extending the Service of a Warden who is of Retirement Age” (hereinafter: “the Extension of Service Order” or “the Order”). The normative status of the Commissioner’s Order is the equivalent of an administrative guideline (see LHCJA 6956/09 Yonas v. Israel Prison Service, (unreported) (2010) per Justice Y. Danziger, at para. 59, and the references cited there. See also para. 60, for thoughts regarding this classification).

As discussed below, the decisions concerning Zozal’s retirement that are the subject of this petition were reached pursuant to the Service Extension Procedure before it was absorbed in the Extension of Service Order. However, given the fact that the Extension of Service Order primarily adopted the provisions of the Procedure, and because Zozal does not argue any differently, the decisions which are the subject of this petition will be examined in light of the arrangement established in the Order – the arrangement which is currently followed, and on which the respondent focused his claims. The relevant provisions in the Order will be addressed in detail below, but at this stage and in order to complete the normative picture, it will be noted in brief that according to the Order, each year all wardens who have reached the age of 57 are sent a notice informing them that they are “of retirement age.” It should be emphasized here that the term “wardens” does not refer only to those who actually hold that position inside the prisons – the term covers all IPS employees, including any personnel who hold a variety of the administrative and other positions. This is due to the fact that the definition of the term “warden” in s. 1 of the Retirement Law provides that a warden is anyone who “is included within the Israel Prison Service pursuant to the Prisons Ordinance 1946, including a temporary additional warden (see the provisions of Part 6 of Chapter C of the Prisons Ordinance [New Version], 5733-1971) and excluding a new warden, as that term is defined in s. 108b.”

Wardens who have received such a notice may submit an application for an extension of their employment if they meet certain criteria that are stipulated in s. 5 of the Order, and decisions concerning such applications are made by a committee led by the chair of the Human Resources Administration at the IPS (hereinafter, "the Service Extension Consideration Committee" or “the Committee”). The Committee examines the warden’s application based on criteria listed in s.7 of the Order, and it may recommend an extension of the warden’s employment in the current position; an extension of employment in a different position; or forced retirement. A recommendation of extended employment is given for a period of no more than one year at a time, and may not be given for a total of more than three years, or for a period extending beyond the time the warden reaches the age of 60. However, if the conditions set out in s. 8(e) of the Order are satisfied, the Committee may recommend an extension of service past the age of 60. The Committee’s recommendation regarding an application for an extension of a warden’s employment is submitted to the IPS Commissioner, who is authorized to render a final decision on the matter. The warden may appeal the decision to the IPS Commissioner and the decision made on appeal is final (compare this with the procedures established by the Israel Police following this Court’s decision in Rosenbaum. See Temporary Provision – ss. 3 and 4 of Order 07.07.02 of the National Headquarters Order “Retirement”; Order 07.07.10 of the National Headquarters Order “Retirement – Extension of Service beyond Retirement Age” (hereinafter: “National Headquarters Order – Service Extension”)).

The Petition before Us

4.    Zozal was born on 27 February 1952 and joined the IPS in May of 1986, where she worked as a social worker-officer at Magen and Maasiyahu prisons. In this position, she reached the rank of Superintendent, and was paid according to the “Preferred Academics” salary scale, with a special supplement for IPS employees added to her salary. On 29 December 1994, she was appointed “Chief Superintendent”, pursuant to the “Flexible Chief Superintendent” arrangement that was in place at that time at the IPS. From this point onwards, in accordance with that arrangement, Zozal was paid the salary set for personnel with the rank of Chief Superintendent. Approximately a year and a half later, on 1 May 1996, she was awarded the rank of Chief Superintendent as well. It should be noted, parenthetically, that the Flexible Chief Superintendent arrangement was created within the IPS as a response to the shortage of positions for officers. The Flexible Chief Superintendent plan allowed an officer with the rank of Superintendent to be promoted to a level of Chief Superintendent even though the position that he held was officially that of only a Superintendent, provided that the officer met the criteria established for this purpose (see Human Resources Procedure 02-3018 “Personal Rankings” (hereinafter: “the Personal Rankings Procedure”)).

In June of 1999, Zozal was given a job as a Registration Officer in the Prisoners Division. At the same time, she began to study law. On February 13, 2005, after she completed her legal studies, she was reassigned to the IPS Legal Department, where she served as an intern in the Torts Division. When she finished her internship, she began serving as an assistant in the Torts Division, pursuant to a letter of appointment dated March 20, 2006 (Zozal was admitted to the Israeli Bar on September 5, 2007). Zozal served in this position until she was forced to retire.

5.    The “warden retirement age” which applies to Zozal, according to the table in Part B of the Second Schedule to the Retirement Law, is 56 years and eight months, and in anticipation of her reaching this age, she was sent a notice informing her that she was of retirement age. Zozal applied for an extension of her employment, and submitted a proper application which was deliberated on June 3, 2008 by the Service Extension Consideration Committee. The Legal Advisor to the IPS advised the Committee that Zozal “conducts her job diligently,” but added that “due to a reorganization, a change is required and she would be suitable for a position of assistant to the officer in charge of Petitions, outside the Legal Department.”

Based on this statement, the Service Extension Consideration Committee found that:

‘In light of the Legal Advisor’s opinion which, on the one hand, noted her dedication to her work but on the other hand noted that she was not suitable for continued work in the Legal Department, the Committee cannot recommend the continuation of her employment – even though the Committee understands her personal circumstances, as she presented them to some degree, and as were presented to a greater degree by the head of the Welfare Department, which indicate that she is childless and is required to financially support her ex-husband.’

In light of the changes in the deployment of personnel within the IPS Legal Department, the Legal Advisor sent a revised notice to the Service Extension Consideration Committee on June 10, 2009, following which the Committee changed its conclusion, and recommended that Zozal’s employment be extended for a period of twelve months, noting that “[b]ecause the Legal Advisor’s opinion was a main reason for the Committee’s recommendation, the change in his position necessarily to a change in the Committee’s recommendation [sic], and the Committee therefore recommends that her employment be extended in one year, provided that during that year she continues to work within the Legal Department.” This recommendation was submitted to the IPS Commissioner, who decided to accept it, partially, and ordered that her employment be extended for an additional six months only, until April 30, 2009. A proper notice was sent to Zozal, in which she was also informed that she would begin a pre-retirement vacation on March 1, 2009. Zozal filed an objection to this decision on December 10, 2008, which was denied following two interviews with the Director of the Human Resources Department of the IPS (hereinafter: “the HR Director”) – the first on 25 December 2008 and the second on 31 December 2008. During the second interview, the HR Director stated that “the organization has been engaged for a number of years in an effort to deal with eliminating the Flexible CS [Chief Superintendent] position” and that her job would therefore be filled by someone else with the rank of Superintendent. The HR Director also noted that she had not been found suitable for any other legal position at the rank of Chief Superintendent.

6.  Once her objection was denied, Zozal appealed on 7 January 2009 to the Equal Employment Opportunities Commissioner at the Ministry of Industry, Trade and Labor. Approximately one month later, and before the Commissioner had time to address her application, Zozal filed the petition now before us, asking that the IPS Commissioner be ordered not to terminate her employment. By doing so, Zozal waived the involvement of the Equal Employment Opportunities Commissioner (see s. 18M(a)(2) of the Equal Employment Opportunities Law, 5748-1988 (hereinafter: “the Equal Employment Opportunities Law”).

In this petition, Zozal applied for an interim order that would prevent her from being ordered to begin a pre-retirement vacation, and would prohibit the termination of her employment until the petition was decided. At first, on 1 April 2009, a temporary order was issued, postponing her pre-retirement vacation and the termination of her employment until any further decision, but on 12 May 2009, after the respondent’s answer was received, this Court (Justice Joubran) denied the application. On 26 July 2009, an additional application that she submitted was also denied, and Zozal was forced to retire.

7.  After a hearing was held regarding the petition on 25 April 2010, this Court (Justices M. Naor, Y. Danziger and N. Hendel) recommended that the parties look into the possibility of finding a practical solution to their dispute and ordered them to update the Court on this matter. As no such solution was found, an order nisi was issued on 18 July 2010, directing the respondent to explain why its decision to force Zozal into early retirement should not be revoked. This Court also ordered the respondent to explain how this decision did not contravene the Court’s decision in Rosenbaum, and ordered that the hearing of the petition after the issuance of the order nisi would be held before an expanded judicial panel.

To complete the picture, it should be noted that on August 1, 2010, Zozal submitted an application for an injunction ordering that she be returned to her job at the IPS, on the grounds that a position for the rank of Chief Superintendent had become available. This application was denied on October 3, 2010 (Justice M. Naor), due to the fact that her retirement had already taken effect and because of the IPS Commissioner’s statement that if her petition was ultimately granted, it would still be possible to reverse his decision, and Zozal’s rights would not be affected.

The Parties’ Arguments

8.    Zozal argued that the Service Extension Procedure, on which the decision that she be compelled to retire was based, is an improper and discriminatory procedure. She also argued that the specific decision reached in her own case suffers from defects that justify its revoking.

Zozal argued that the starting point for the arrangement embodied in the Service Extension Procedure – that the IPS Commissioner may order any IPS employee who has reached the age of 57 to retire – is unlawful, and constitutes age-based discrimination. Zozal emphasized that in the Rosenbaum decision, this Court rejected the IPS and the Israel Police’s retirement policy, holding that it discriminated between wardens and policemen, on the one hand, and civil servants, on the other. She also noted that in that decision, the Court found that the IPS would have been expected to change its policy at least with respect to workers holding professional, as opposed to operational, positions. However, she argued, the retirement arrangements that were established after the Rosenbaum decision did not change IPS policy in this regard in any substantive way, and they in fact worsened the situation for IPS wardens, by the fact that all wardens above the age of 57 are now classified as temporary workers who are “of retirement age” and must apply for yearly extensions of their employment time and again. Zozal added that no substantive reason was given within these arrangements for establishing the uniform retirement age at 57, and that in her specific case, the respondent has not given any explanation for her forced retirement ten years before the age at which an attorney working in the civil service would be forced to retire. Zozal also argued that although s. 73 of the Retirement Law does grant the IPS Commissioner discretion to terminate the employment of a worker on the basis of age, there is no justification for transforming this optional power into official IPS policy, implemented in an irrelevant, improper, and discriminatory fashion. Likewise, Zozal argued that the arrangement violates the provisions of s. 2(a) of the Equal Employment Opportunities Law and the provisions of the Equal Retirement Age for Men and Women Law, 5747-1987, and that a requirement that a person must retire at the age of 57 despite retaining all his faculties constitutes a violation of a person’s dignity and freedom of occupation, because the chances that he will be able to find a new job at that age are minimal. Zozal contends that this is an unreasonable, disproportionate, and improper violation which should not be tolerated. She added that to the extent that the respondent sought to end her employment due to the lack of a proper placement, he is bound by the provisions of regular dismissal procedures, which require a hearing and the approval of the relevant appointed Minister.

Zozal also argued that her age was the real reason that her work at the IPS was terminated, and that the version according to which her termination was the result of the IPS’ move toward eliminating the “Flexible Chief Superintendent” rank was brought up for the first time only at her second interview with the HR Director, on 31 December 2008. According to Zozal this version is unreliable, and does not conform to the IPS procedures that govern the employment of IPS personnel holding that rank. In any event, Zozal contends, this explanation is irrelevant to her case – because after completing her internship, she was working in a regular Chief Superintendent position; she supports this contention by referring to her letter of appointment, dated 20 March 2006. Zozal further noted that the IPS Legal Advisor had stated, in her periodic review, that she was conducting her job diligently, to the satisfaction of her division head within the Legal Department. According to Zozal, even if it is determined that the Service Extension Procedure is lawful, the extension of her employment should be ordered pursuant to the conditions established in that Procedure. Zozal refers to the criteria listed in s. 6 of the Procedure, and emphasizes that after twenty-three years with the IPS, she would have been entitled to a pension in the amount of 59% of her determinative salary, and that the termination of her employment by the respondent prevented her from having the opportunity to be promoted to a rank at which she would receive a pension in the maximum rate, of 70%, which would ensure that she would be able to support herself with dignity in her old age. Zozal adds that the respondent did not give proper consideration, in his decision, to her financial and family situation; to the fact that she was childless and without any social benefits from any other source; and to the fact that pursuant to a Family Court decision, she is required to use part of her pension to support her ex-husband. Zozal also argues that she did not have a proper hearing and that for this reason the decision rendered in her case should be overturned.

9. In contrast, the respondent argued that the petition should be denied – that there is no defect in the Service Extension Procedure, in the Extension of Service Order, or in the arrangements established therein, and that the manner in which the Procedure and the Order have been implemented is consistent with the decision in Rosenbaum and reflects a proper balancing between IPS characteristics and the rights of those who serve in the IPS. In this context, the respondent further emphasized that there is currently no uniform retirement age in the IPS; that the arrangements that were established give rise to an individualized examination process for each application; and that age is merely one of several considerations weighed in each case. The respondent added that the pressure and fatigue that IPS personnel experience is greater than that experienced by the average worker (and is even greater than what is experienced by a police officer), because of the extra number of hours (at least five hours more per week than any other civil servant), and because of the unusual times in which IPS personnel are required to work as well as their ongoing contact with criminals. The respondent further argued that the retirement age within the civil service differs from one sector to another and that as a practical matter, it is lower than the age established in the Law. This is especially true with respect to the security forces, where the average retirement age is between 50 and 54. The respondent also noted that the legislature itself distinguished between police officers and wardens on the one hand, and civil servants on the other, with regard to the retirement age established in s. 73 of the Retirement Law – by establishing a different retirement age for police officers and wardens. The Law even allows, in s. 100(a), for increased pensions for police officers and wardens (according to the procedures enacted pursuant to that section, the pension can be increased by a rate of up to 8%, which is equal to an additional four years of employment). The respondent also argued that the early retirement age for IPS personnel conforms to the needs and wishes of the wardens themselves. According to the respondent, in this context, the reliance interests of those serving in the IPS should be protected. The respondent also believes that the possibility of retiring at an early age significantly contributes to the high motivation of IPS personnel. The respondent further argued that it is completely acceptable that the Extension of Service Order requires a warden who has reached retirement age to provide notice that he wishes to continue his employment, since past experience teaches that most wardens do prefer the earlier retirement age. The respondent emphasized that the IPS’ approach towards service is different from that embedded in the Civil Service Law (Appointments), 5719-1959 (hereinafter: “the Civil Service Law – Appointments”). This approach is embedded in ss. 82 and 85 of the Prisons Ordinance [New Version] 5732-1971 (hereinafter: “the Prisons Ordinance”) and in the procedures that were established regarding this matter, according to which any person serving in the IPS must, regardless of age, apply for an extension of employment every five years until the twentieth year of employment. The respondent also noted that in terms of the criteria and guidelines used in deciding requests for extensions, the Extension of Service Order does distinguish between a prison warden and an IPS employee in an administrative or staff position, and that the applications are considered on an individual basis by the Committee, which is chaired by the HR Director. A substantial number of these applications (approximately 82%) is approved for continued employment, even beyond the age of 60.

10.  According to the respondent, there is no defect in the particular decision reached in Zozal’s case, noting that Zozal’s overall personal circumstances were examined by the Service Extension Committee, and the Committee recommended that her employment be extended for another year. The Committee’s recommendation was presented to the respondent, who examined all the relevant data once again, and decided to accept the recommendation in part, and to extend Zozal’s employment for an additional six months. The respondent noted that the “Flexible Chief Superintendent” arrangement that applied to Zozal, through which she obtained the rank of Chief Superintendent, presented significant difficulties for the IPS’ salary budget, and caused organizational difficulties that necessitated its elimination. The arrangement was therefore eliminated in the year 2000, and the decision was made to end it by requiring the retirement of those wardens who reached retirement age. The target date for ending this arrangement was the end of 2008, and it is argued that this organizational goal led to Zozal being ordered to retire and her position being filled by an IPS officer with the rank of Superintendent. The respondent added that Zozal’s functioning within the legal department was indeed satisfactory, yet she was not found to be suitable for a promotion to the position of “division head” (with the rank of Chief Superintendent), and no suitable alternative position could be found for her. The respondent also argued that Zozal was never actually placed in a position with the rank of Chief Superintendent, and the reference made to this rank in her letter of appointment, given to her when she completed her internship, was erroneous. According to the respondent, age considerations were not at the core of the decision made regarding her retirement – the decision was in fact based on her personal capabilities and the organizational needs of the IPS. The respondent added that the IPS is now implementing a “term of office policy,” according to which the proper step would be repositioning Zozal after four years in one position, and since no other appropriate position was found for her – releasing her from the IPS.

The respondent also noted that in contrast to Zozal’s claims, she was indeed given a proper hearing, in which she was given the opportunity to raise all of her arguments. The respondent also pointed out that unlike other IPS personnel who do not wish to retire at the age of 57 because they have not yet earned enough pension rights, Zozal was entitled, upon her retirement, to a pension consisting of 60% of her determinative salary. Additionally, certain sums had accrued to her credit in a provident fund and in a continuing education fund, and she was entitled to a retirement grant in an amount equivalent to 12 months of her determinative salary, and to another grant for unused sick days and vacation days. All of this added up to about half a million NIS. The respondent also noted that in light of her personal circumstances, Zozal is entitled, pursuant to s. 100 of the Retirement Law, to request for her pension to be increased. It was also noted that Zozal has formal education in two professional fields that are not unique to the IPS (social work and law) and therefore her argument that her freedom of occupation has been violated by her forced retirement should be dismissed.

11.  In response to the respondent’s arguments, Zozal noted that the procedures to which the respondent referred are irrelevant in this case, and that the decision to have her retire was based on her age. Zozal added that in any event, according to her letter of appointment, she was assigned to a regular position of a Chief Superintendent, and she emphasized that the respondent’s claim that this was based on an error was made in bad faith. According to her, officers who were promoted to the rank of Flexible Chief Superintendent were not informed of the fact that the promotion would work against them with regard to their retirement age, and the respondent’s position suggests that her promotion, which was based on her skills, turned out to be a double-edged sword that put her at a disadvantage. Zozal further argued that the claim that she could not be transferred to a different position should be dismissed, since she was never offered a suitable alternative position, despite the fact that legal positions matching her skills were available. She noted that in any event there was no proper reason to move her from the position in which she had gained success, as was indicated in the report written by her superiors. These circumstances, Zozal argued, demonstrate depravation, discrimination, and injustice caused by her forced early retirement and the respondent’s trivializing of her work and the positions she held during the course of her employment shows lack of good faith.

According to Zozal, the IPS retirement policy has not changed in any substantive way since the decision in Rosenbaum, and the discrimination between IPS workers holding professional positions like hers, on the one hand, and civil servants, on the other hand, remains in place. She emphasized that an IPS warden who reaches the age of 57 can, in the best case scenario, extend his employment for a limited period of time as prescribed in the Order, but from that age onwards any promotion—both in terms of jobs and in terms of ranks—would not be considered. Zozal added that no reasons were given for the respondent’s decision to extend her employment by only six months, and that the Extension of Service Committee (in its deliberation on June 3, 2008) discussed her retirement only with reference to the issue of her age. She noted that the reasoning offered in the interview that took place on December 31, 2008, including the remarks relating to the Flexible Chief Superintendent position, were developed at a later stage in order to obscure the fact that her retirement was based solely on her age, and without being given a proper opportunity to prepare for these arguments or to respond to them. Zozal finally argued that because no other law establishes a mandatory retirement age for wardens, the IPS Commissioner is bound to implement the mandatory retirement age established in s. 4 of the Retirement Age Law, which is 67. According to her, that section supersedes any arrangement or administrative guideline presented by the respondent in this context. Zozal added that the respondent’s policy does not reflect the needs of the wardens and is inconsistent with the large number of applications for extensions of employment that are submitted after the age of 57; she also noted that the data presented by the respondent indicate that the average retirement age for wardens has risen over the years. It may be presumed, she argued, that should this obstacle be removed, the average retirement age would continue to increase.

Discussion

12.  The main issue which must be decided in this petition is whether the arrangements that the IPS has established for the retirement of IPS personnel are consistent with the State’s obligation to treat all its employees equally, in accordance with the principles that were outlined in Rosenbaum.

Before we respond directly to this question, we will again present a brief outline of the normative framework that is relevant to the matter.

Since the early years of the State, the right to equal treatment has been recognized by our legal system as a primary and basic right (see I. Zamir and M. Sobel “Equality before the Law” 5 Mishpat u’Mimshal (5760 -2000) 165, 166-169 (hereinafter: “Zamir and Sobel”). According to the standard approach, the concept of equality means “equal treatment of all people when there is no difference between them that is relevant to the matter” (HCJ 9863/06 Karan – League of Military Amputees v. State of Israel, Minister of Health (2008) (unreported), at para. 9; HCJ 4293/01 New Family v. Minister of Labour and of Welfare (2009) (unreported), per Justice A. Procaccia, at para. 45). Discrimination is improper when a differentiation is made between people or situations without any substantive justification. However, there can be situations in which there are good reasons for making such a distinction. This Court has noted this possibility:

‘Equality in the case before us means equal treatment for persons who are equal and different treatment for persons who are different. Discrimination means different treatment for persons who are equal and equal treatment for persons who are different… It follows that equality does not require identical treatment. Sometimes, in order to achieve equality, we need to act differently. Not every different treatment is discriminatory treatment. The principle of equality is therefore based on the approach of relevance’ (HCJ 6778/97 Association for Civil Liberties in Israel v. Minister of Internal Security [2004] IsrSC 58(2) 358, at p. 365. See also HCJ 721/94 El-Al Israel Airlines Ltd. v. Danielowitz [1994] IsrSC 48(5) 749, at p. 762).

 When Basic Law: Human Dignity and Liberty was enacted in 1992, the right to equal treatment was recognized as a fundamental right embodied within the human right to dignity, in accordance with an intermediate model which relates to discrimination that does not involve humiliation too, provided that such discrimination is closely and substantively related to human dignity (see HCJ 4948/03 Alhanati v. Minister of Finance (2008) (unreported), at para. 17, and the references cited there).

13.  The duty not to discriminate – which is but a mirror image of the human right to equality – is imposed primarily on government authorities, but it can arise in personal law situations as well (see Zamir and Sobel, supra, at pp. 174-179). One of the key areas in which the principle of equality “is given a place of honor as a norm to be upheld” is labor law (Alhanati, at para. 18). In this field, the Knesset has enacted a series of laws which include provisions that anchor the principle of equality and which are designed to eliminate various types of discrimination (see, for example: Equal Salaries for Male and Female Employees Law, 5756-1996; Women’s Work Law, 5714-1954; Equal Retirement Ages for Male and Female Employees Law, 5747-1987; Chapter D of the Equal Rights for People with Disabilities Law, 5758-1998; s. 15A of the State Civil Service Law – Appointments; s. 42 of the Employment Service Law, 5719-1959; ss. 18A-18A1 of the Government Companies Law, 5735-1975).

 A key law which is intended to establish the principle of equality within the field of labor law is the Equal Employment Opportunities Law, which this Court has termed “the lynchpin of legislation concerning equality in the field of labor relations in Israel” (HCJ 6051/95 Recanat v. National Labour Court [1997] IsrSC 51(3) 289, at p. 306 (hereinafter: “Recanat”); the Equal Employment Opportunities Law applies to the State as an employer (s. 17 of the Law), and served as the normative basis for the analysis of the parties’ claims in the Rosenbaum case.

Section 2 of the Equal Employment Opportunities Law provides as follows:

‘(a) An employer shall not discriminate between his employees, or between candidates for employment on the basis of their gender, sexual orientation, personal status, pregnancy, fertility treatment, in vitro fertility treatments, the fact that they are parents, or because of their age, race, religion, nationality, country of origin, views, party affiliation or duration of reserve service or expected reserve duty service, within the meaning thereof under the Military Service Law [Consolidated Version], 5746-1986, including due to its expected frequency or duration, in any of the following:

(1) acceptance for employment;

(2) terms of employment;

(3) advancement in employment;

(4) vocational training or supplementary vocational training;

(5) dismissal or severance pay.

(6) benefits and payments for employees in connection with their retirement from employment.

(b) For the purposes of subsections (a) and (a1), the making of irrelevant conditions shall also be regarded as discrimination.

(c) Differential treatment necessitated by the character or nature of the job or position shall not be regarded as discrimination under this section.’

This section prohibits discrimination by an employer among his employees, or among job applicants, and this prohibition “revolves around two key axes:” (1) The grounds on which a claim may be based – classification of people according to distinctions that are prohibited in the opening passage of s. 2(a) of the Law; (2) The subject of discrimination – the subjects listed in sub-sections (1) through (6) of s. 2(a) of the Law, regarding which discrimination is prohibited (see the remarks of Justice M. Cheshin in Recanat, at p. 308; HCJFH 4191/97 Recanat v. National Labour Court  [2000] IsrSC 54(5) 330, at p. 343 (hereinafter: “Recanat II”), and see also Sharon Rabin Margaliot “The Slippery Case of Discrimination in the Workplace – How can it be Proven?” 44 Hapraklit 529 (1998), at pp. 532-535 (hereinafter: “Rabin-Margaliot”).

The concept of relevance, on which the principle of equality is based, is expressed in the above-mentioned provisions of s.2(c) of the Equal Employment Opportunities Law, which provides that “[d]ifferential treatment necessitated by the character or nature of the job or position shall not be regarded as discrimination under this section.” This test is objective by nature, and when we implement it we must examine whether the job’s requirements and nature do in fact reasonably necessitate the differentiation for which justification is being sought. It is also necessary to determine whether reasonable weight was attributed to each of the relevant details, allegedly justifying the differentiation (Recanat II, at pp. 348-349). It should be noted that a worker who claims that he has suffered discrimination bears the burden of proving that the employer discriminated against him compared to other employees, and once the worker has met this requirement, the burden shifts to the employer to prove that the conditions listed in s. 2(c) of the Law have been satisfied, at least at the level of proof required in civil proceedings (ibid., at pp. 351-352).

14.  One of the forms of discrimination prohibited in the Equal Employment Opportunities Law is age-based discrimination. This prohibition was added by Amendment 3 to the Law, in 1995 – an amendment which added several new grounds for discrimination claims. Age-based discrimination is generally directed at older members of society and can create an obstacle that prevents individuals from finding employment; it can also be a factor that influences terms of employment and promotions, as well as a motivating factor in employee dismissals and in forced retirement (see Sharon Rabin-Margaliot, “Distinctions, Discrimination and Age: Power Games in the Job Market” 32 Mishpatim 131 (2001) (Hebrew), at pp. 161-165; Batya Ben-Hador, Aliza Even-Hirik, Efrat Applebaum, Hadas Dreiher, Dafna Sharon, Yanon Cohen, Guy Mundlak, “Assessing Employment Discrimination in Hiring through Correspondence Studies”, 11 Work, Society and Law 381 (2005) (Hebrew), at p. 395; Ruth Ben-Israel, Equal Opportunity and the Prohibition against Employment Discrimination, at pp. 1082-1089 (Vol. 3, 5758) (hereinafter: “Ben-Israel”); Ruth Ben-Israel, Gideon Ben-Israel, Who’s Afraid of Old Age (2004) (Hebrew), at pp. 56-60).

Age-based discrimination against employees or job applicants is usually a reflection of “stereotypes with regard to the limitations of the body and the mind of the older person. Usually this has no rational or objective basis. This discrimination violates the human dignity of the person who suffers the discrimination. He feels that he is being judged according to his age and not according to his talents and abilities.” (Rosenbaum, at pp. 871-872. See also Recanat II, at p. 369; for a review of the development of the prohibition against age-based discrimination and the nature thereof, see: Ben-Israel, Equal Opportunity, supra, at pp. 1029-1186; Pnina Alon-Shenker “‘The World Belongs to the Young’: On Advanced Age-Based Discrimination in the Workplace and Forced Retirement at a Fixed Age,” Dalia Dorner Volume, at p. 81 (Shulamit Almog, Dorit Beinisch, Ya’ad Rotem, eds., 2009) (hereinafter: Alon-Shenker); Yisrael Doron and Anat Klein “The Wrong Forum? Age-based Discrimination from the Perspective of the Haifa Regional Labour Court” 12 Work, Society and Law 435 (2010) (hereinafter: Doron and Klein); Rabin-Margaliot, “Distinction, Discrimination and Age”). Various scholars have also noted the fact that age-based discrimination against older workers is one of society’s expressions of its perception of the old as different, weakened people that should thus be eliminated from society (a phenomenon known as ageism. See Israel (Issi) Doron “Ageism and Anti-Ageism” 25 Hamishpat (2008); “Law in the Service of the Elderly Society,” The Legal Rights of Veteran and Elderly Workers in the Field of Employment (2010)).

15.  Age-based discrimination in connection with the forced retirement of a worker is hurtful and cruel. An older-person’s retirement is very significant, and carries weighty consequences for that person’s life, in financial and social terms, and no less with respect to the person’s self-image, given the insult inflicted on a person who is capable and wishes to continue working but is nevertheless denied the ability to do so. We therefore cannot exaggerate the importance of the duty not to discriminate between employees with regard to the determination of a retirement age (Recanat, at p. 326). Justice G. Bach noted this point in HCJ 104/87 Dr. Naomi Nevo v. National Labour Court [1990] IsrSC 44(4) 749, when he wrote the following:

‘Retirement from work has many negative personal, mental and social consequences. Frequently, a person who retires from his employment because of his advanced age feels that he is no longer a participant in the productive sector of society. He feels that he has been deprived of the satisfaction of working and receiving compen­sation for his labor. This feeling is strengthened by society’s attitude towards him, which in many cases treats him as an “old man” who no longer serves any useful purpose. The situation is more acute in our day, when the average life expectancy has increased and people remain healthy even at an advanced age. Therefore, there are now more years in which an older person, of sound body and mind, is forced, despite his capabilities, to abandon his activities in the labor market and gaze, frequently in frustration, on the progression of life’s activities in which he can no longer take part’ (ibid., at p. 755.) See also Israel Doron, “The Connection Between the Aging of Israeli Society and the Status of Economic and Social Rights in Israeli Law” in Economic, Social and Cultural Rights in Israel (Yoram Rabin and Yuval Shani,  eds., 2005) 893, at p. 926 (hereinafter: Doron).

It should be noted in this context that in many cases, the interest of older employees in continuing to work is consistent with employers’ interest in continuing to employ them, because these older employees have know-how and life experience (see HCJ 4487/06 Kelner v. National Labour Court, (2007) (unreported) per Justice E. Rubinstein, at para. 10; Rosenbaum, at p. 872; Alon-Shenker, supra, at pp. 117-118).

 16.  Discrimination in the form of a low retirement age is not mentioned explicitly in the Equal Employment Opportunities Law, but it has been recognized as one of those matters that fall within general age-based discrimination, which is a form of discrimination listed in that Law (see Rabin-Margaliot, “Distinction, Discrimination and Age,” at p. 173). It has been held that “the establishment of a lower retirement age for an individual worker or for a particular group of workers, when the nature of their positions does not require such early retirement, constitutes age-based discrimination vis-à-vis the particular worker or group” and in general, “an employer’s duty to treat all his employees equally in terms of their age, means, inter alia, that the same retirement age must be in place for all workers (who constitute the peer group)…” (Recanat II, at pp. 347, 360. See also Recanat, per Justice Zamir, at pp. 347-350. Regarding the application of the Equal Employment Opportunities Law to this subject, see the position of (then) Justice M. Cheshin, ibid., at pp. 335-336, and of (then) Justice D. Beinisch, ibid., at p. 375. See also Alon-Shenker, supra, at pp. 91-97).

There are those who believe that “the very fact that a certain age – any age – is established – at which an employee must retire from his job, discriminates between those who have reached that age and those who are younger” (Recanat, at p. 309). According to this approach, a different arrangement should be put in place, one that outlines an individualized model for retirement that takes into consideration the particular characteristics of each worker (for a review of the various approaches concerning the proper model, and the constitutional questions arising in this context, see HCJ 7957/07 Sadeh v. Minister of Internal Security (2010) (unreported), at para. 11, and the references cited there. See also Rabin-Margaliot, “The Slippery Case of Job Discrimination,” at pp. 559-561; Ruth Ben-Israel, Social Security (Vol. 3, 2006), at pp. 1030-1038, 1047-1050). The Israeli legislature, as noted, chose to adopt the model of a uniform mandatory retirement age for all workers in the economy, including civil servants, and this is the model reflected in the Retirement Age Law and the Retirement Law (a similar approach was adopted by US federal law. See Age Discrimination in Employment Act, 1967 29 U.S.C. §§ 621-634; EEOC v. Wyoming, 460 US 226 (1983)). This approach therefore serves as the starting point for our discussion. At the same time, it is important to remember that this model may increase the sense of discrimination and mistreatment if principles of equality are not upheld properly. Justice Zamir noted this point when he wrote:

‘The harm generally done to a person when he is forced to retire at an age that has been fixed as the general age for mandatory retirement is heightened when a person belongs to a group of workers who are  forced to retire from their work at a younger age’ [emphasis added] (Recanat, at p. 342).

Indeed, Zozal focused her arguments on the fact that the arrangements established in the Extension of Service Order, on the basis of which the decision was reached to retire her at age 57 and two months, is wrongful, and that it discriminates against her as an attorney at the IPS, relative to other workers in the Civil Service who do similar work.

17.  As noted above, the relevant peer group for this case includes all civil servants. It has already been held in this context that “all policemen and prison wardens are ‘workers’ and the State is their ‘employer’” (HCJ 1214/97 Rabbi Halamish v. National Labour Court [1999] IsrSC 53(2) 647, at p. 653). In Rosenbaum the Court added that:

‘The arrangements in the Civil Service (Retirement) Law apply to all civil servants. The employees in the various parts of the civil service have a reasonable expectation of being treated equally, as employees of the State of Israel. The State owes general duties of reasonableness, fairness, and equality to each citizen… and it certainly owes these duties to all of its employees. Indeed, for the purpose of the prohibition of discrimination before us, the State is one entity. It is the ‘employer’ under s. 2. [of the Equal Employment Opportunities Law]’ (ibid., at pp. 872-873).

We have already discussed the fact that discrimination is unlawful if a distinction is made between individuals or situations, when there is no substantive justification for such a distinction. The party arguing that he has been the victim of discrimination must establish that there is a “peer group” whose members are all identical or equal to the claimant in terms of relevant characteristics and who, despite such similarity, are treated differently (see HCJ 6784/06 Major Ronit Shlitner v. Director of Pensions (2011) (unreported), at para. 49). Once it has been established that those serving in the IPS are treated differently than all other civil servants with regard to the age of their retirement, we must determine whether the respondent has met the burden of showing that there are substantive reasons that justify this distinction.

The respondent argued repeatedly that there is a very significant difference between the work of various categories of civil servants, on the one hand, and the work of prison wardens, on the other hand. According to the respondent, this difference justifies their different retirement arrangements, as established in the Extension of Service Order. In this context, the respondent stressed that most wardens enter the IPS at a relatively early age and serve in very demanding positions, which expose them to many difficult situations; the experience of burnout is therefore relatively high for those who serve in the IPS. According to the respondent, the fact that the wardens ask to retire earlier than other civil servants supports the distinction between IPS personnel and other civil servants. The respondent presented data showing that the average retirement age for wardens in 2009 was 50.7, and noted that apart from career soldiers in the IDF (for whom the average age is 45.6), this is the youngest average retirement age among other groups of State employees (see Shlitner, at para. 57). The respondent appears to have concluded, from these numbers, that a lower retirement age for IPS personnel is thus justified.

18.  The various characteristics that differentiate the IPS and Israel Police employees from other civil servants have already been noted by this Court in Rosenbaum:

‘Admittedly, the prison service and the police are special bodies within the civil service. Their functions are complex, and they are often exceptional in nature and in the demands that they make of those serving in their ranks. They are likely to require greater physical fitness, maximum alertness, long and irregular hours, and the ability to withstand pressure and tension. Moreover, many of those who serve in the prison service and the police — and this includes persons in administrative positions or jobs requiring a special professional expertise (such as doctors or engineers) — are sometimes required to exercise their enforcement powers or to act as reinforcements for operational forces’ (Rosenbaum, at p. 873. On physical strength as a relevant criterion, see also Recanat, at p. 359).

However, it is still necessary to examine the reasonableness of the arrangements established by the IPS. This Court has already held, in Rosenbaum, that even though the characteristics of the service in the IPS and in the Israel Police reflect the uniqueness of those two entities –

‘they do not render these bodies — which are, after all, branches of the State — immune from the duty to treat their employees in the same way as other civil servants… These special characteristics should not be allowed to serve as a way of narrowing the ‘equality group,’ with the result that it exempts the respondents ab initio from examining the basis for their policy’ (ibid., at p. 873).

The court further noted in the same case that while the conditions in the IPS and the Police are “unique in different ways”:

‘these are merely conditions that require the respondents to develop a complex and objective arrangement, which both takes into account the characteristics of the service, on the one hand, and is also sensitive to the human rights of the persons serving in it, on the other. As the court has already held, the test in this regard is ultimately a “test of reasonableness and proportionality”...’ [Emphasis in the original] (ibid., at p. 878).

Thus, the difference in the characteristics of the service in the IPS can justify retirement arrangements for its personnel, which differ from those that apply to other civil servants, but these arrangements may still be subjected to judicial review examining whether those arrangements – and in this case, the Extension of Service Order – are indeed reasonable and proportionate, and whether the principle of equality was given proper consideration within these arrangements in balancing all the relevant considerations.

The Arrangements Established in the Extension of Service Order

19.  I will first note my conclusion, which is that the arrangements established in the Extension of Service Order constitute an unreasonable and disproportionate violation of the principle of equality; they conflict directly with the rule established in Rosenbaum, and with the outline set out in that judgment concerning the nature of appropriate retirement arrangements.

I will describe below the reasoning that has led me to this conclusion.

Section 3 of the Extension of Service Order includes a statement that the Order establishes the criteria according to which “a decision will be made regarding a warden who has reached retirement age and who wishes to defer his retirement and continue to serve after retirement age, and regarding whom the IPS Commissioner is authorized to order a forced retirement.” A warden of retirement age is defined as a warden whom the IPS Commissioner is authorized to order to retire. Section 2 of the Order provides that in accordance with the Retirement Law, the IPS Commissioner may order any warden who has reached the age of 57 to retire, if the warden has served at least ten years in the IPS or in the civil service. According to the provisions of the Order, a list of wardens whose retirement the IPS Commissioner may so order is distributed each year, and those wardens who wish to extend their employment may submit an application for an extension of their employment. These applications are all reviewed by the Extension of Service Committee, provided that the “basic conditions for Committee review of a warden’s case” have been met. These conditions are set out in s. 5 of the Order and they are as follows:

 

‘a. Confirmation from the Head of the Medical Division, addressed to the senior staff that the warden is fully qualified, from a medical perspective, to continue his employment (with the specific competence requirements adjusted for the sector in which the warden is employed).

 

b.    In addition to the requirement in section (a) above, the warden is included within one of the following criteria:

 

1)Wardens of retirement age who serve in professional/administrative [staff] positions or in required staff positions;

2)Wardens from the operational sector who make a unique contribution to the organization, or wardens from the operational sector who are in need of an additional period of employment of not more than 12 months in order to fully exhaust their salary rights [or for whom an appropriate staff/administrative position has been found.

 

c.     Wardens who are of retirement age, and who, as of the determinative date, have not yet earned all their pension rights.

 

d.    Notwithstanding the provisions of section (c) above – the Committee may review applications by wardens who have exhausted all of their pension rights if the reason for the application is their unique contribution and a clear organizational need for their continued employment.’

 

Section 4(d) of the Order provides that when a Service Extension Committee considers an application, it must take into account all the information regarding the particular warden and “the nature and character of his service; the nature and substance of the function that he performs; his service track; the completion of a term of office; the needs of the system; and additional factors.” It is further clarified in the Order that “the fact that a warden has reached the age at which the Commissioner is authorized to order his retirement will not constitute the only grounds on [sic] his retirement” (s. 4(e) of the Order). The Order also stipulates, in s. 7, the factors to be considered in assessing a warden during a Committee’s deliberation, and provides as follows:

‘a. The factors for assessing a warden will focus on the following areas:

 

1)Evaluation of job performance, and the nature and character of the job that the warden performs.

2)The warden’s service history, the length of his term of office and the number of years he has spent at his current job.

3)The warden’s medical condition.

4)The degree to which the warden is essential to his job, the possibility of repositioning him, the potential for other placements (including a requirement that he undergo training for another position) and the potential for his promotion.

5)The scope of the warden’s entitlement to a pension.

6)The warden’s financial and family situation.

 

b. In addition to the factors regarding the warden’s functioning, the Committee will also take into account systemic considerations and the realization of IPS objectives.’

 

The Order further provides that the warden whose matter is being deliberated must be invited to the Committee’s deliberation and must be given the opportunity to make his case before the Committee, either verbally or in writing. The Committee, after hearing the warden’s arguments and receiving an opinion from his supervisors, and after considering said criteria, may recommend to the IPS Commissioner to extend the warden’s employment, and if the recommendation is to extend employment, the Committee may recommend the manner in which the employment will be extended and the position in which the warden will continue his employment. Alternatively, the Committee may recommend that the warden should be forced to retire. A recommendation to extend employment can be for a period of up to one year, and if such an extension is granted, the warden may, at the end of the extension period, submit an application for further extension. However, the “Recommendations regarding extensions of employment may only be given for a total period of up to 3 years and/or until the warden has reached the age of 60” (s. 8(d) of the Order). Section 8(e) also provides as follows: 

‘The case of a warden who wishes to extend his employment beyond the age of 60 will be presented to the Committee for deliberation, and the Committee will consider the degree to which the continuation of his employment in his current position is essential; it will also consider his expected contribution to the organization should he remain in his position. The Committee will also examine the request in accordance with the standards set out in s. 7a and 7b. The Committee may recommend the continuation of a warden’s employment for periods that do not exceed one year per each request.’

 

To complete the picture, we note that s. 10 of the Order establishes an additional exception, for a bereaved parent or widow/er, according to the definition of that term in that section, who may serve an additional five years beyond the retirement age for wardens, provided that he is found suitable for continued employment in the IPS. Section 9 of the Order also provides that only the Commissioner is authorized to render a final decision regarding the extension of employment or a forced retirement, and that a warden has the right to appeal a decision denying his application for employment extension to the Commissioner. The Commissioner’s decision on such appeals is final.

20. These arrangements, established in the Extension of Service Order, are indeed substantially different from the arrangement that was followed in the IPS in the past, and which was struck down in Rosenbaum. The IPS policy expressed in that earlier arrangement was to require all wardens (with very rare exceptions) to retire at a uniform age (either 55 or 57). According to the new arrangement, any warden, upon reaching retirement age, may apply for an extension of his employment, and that application will be deliberated in an individualized manner by the Service Extension Committee, which conveys its recommendations on to the IPS Commissioner. The Order also distinguishes – with respect to their retirement – between wardens who serve in professional, administrative, or staff positions, on the one hand, and wardens who serve in the operational sector, on the other hand. This distinction conforms to this Court’s holding in Rosenbaum regarding the relevance of the nature of a warden’s position to his retirement, and concerning the possibility of “establishing a categorization of positions or jobs within the entities” (at p. 877). The Order also emphasizes that the fact that a warden has reached the age at which the Commissioner is authorized to order his forced retirement cannot serve as the “exclusive grounds” for ordering his retirement (s. 4(e) of the Order). This provision teaches us that in contrast to the previous situation at the IPS, in which age was the sole grounds (except in very rare occasions) for the forced retirement of a warden, the current system requires an individual evaluation for any warden who seeks to extend his employment past the age of 57. At the same time, upon examining the overall provisions of the Extension of Service Order, it seems there is still a substantial unjustified disparity between the arrangements for the retirement of wardens and for all other civil servants. This is because of the strong emphasis placed on age as a key factor—even if no longer a sole factor—in decisions concerning the retirement of wardens, and as a central axis around which the entire process revolves.

21. A review of the Order indicates that its starting point and basic presumption is that a warden is “of retirement age” at the age of 57. This is the default option for the retirement arrangement embedded in the Order, unless the warden has actively applied for an extension of his service. If such an application is submitted, it is brought before the Extension of Service Committee which discusses the application. After the deliberation, the Committee may recommend that the warden’s employment be extended, but the recommendation may only be for a maximum period of one year each time, and all extensions combined may be for a total period of no more than three years or until the warden reaches the age of 60. Thus, even if a warden serves in a professional, administrative, or staff position, and satisfies all the criteria outlined in the Order, his employment at the IPS may not be extended for more than a single year per application, nor for a total period of more than three years or past the time at which the warden reaches the age of 60 (except in very exceptional cases set out in s. 8(e) of the Order). These restrictions discriminate against IPS personnel who serve in professional, administrative, or staff positions – employees who serve as lawyers, social workers, accountants, human resources directors, organization managers, etc. – compared to civil servants who hold similar jobs. This discrimination is reflected in the fact that according to the arrangements set forth in the Extension of Service Order, age 60 is established, as a practical matter, as the mandatory retirement age for wardens. In contrast, age 67 is the mandatory retirement age for other civil servants (see and compare: provisions of the Extension of Service Order for the IPS; provisions of the Civil Service Regulations (Retirement) (Continued Employment of a Worker Beyond Age 65), 5729-1968; and s. 82.54 of the Civil Service Bylaws).

The Civil Service Commissioner’s power to order the retirement of civil servants who have reached the age of 60, if they have been employed within the civil service for at least ten years (s. 18 of the Retirement Law), is parallel to the IPS Commissioner’s power to order the retirement of wardens when they reach the age of 57 (ss. 73 and 81 of the Retirement Law). Civil servants also have the right to give notice that they wish to retire at the age of 60. However, the arrangement established in s. 82.52 of the Civil Service Bylaws regarding the Commissioner’s exercise of his authority in this regard is completely different from the IPS arrangement described above, as set out in the Extension of Service Order. First, the minimum age (60) at which the Civil Service Commissioner can order retirement pursuant to the Retirement Law is effectively the same as the maximum age at which a warden can remain employed pursuant to the provisions of the Extension of Service Order. This fact highlights the harsh discrimination that exists in this context between IPS personnel and civil servants, particularly with respect to IPS workers that perform functions that are no different in any relevant respect from those performed by other civil servants. Second, even though the Civil Service Commissioner has the authority to order the retirement of a civil service worker who has reached the age of 60, the provisions in the Civil Service Bylaws make clear that this is not the default age for retirement, and the worker is therefore not required by those provisions to submit an application for the extension of his employment. To the contrary, in order for the worker to retire at the age of 60, the State must initiate a process at the end of which the Civil Service Commissioner can order the worker to retire, provided that he has been persuaded that there are good reasons that justify such an order. If such a process is not initiated, the default is that the worker may continue to work within the civil service until he reaches the mandatory retirement age of 67.

22. The differences in the approaches of the two arrangements are quite stark, and they are reflected, naturally, in the substantive difference between the operative provisions included in each arrangement. According to the retirement arrangement used by the IPS, age 57 is perceived as the age at which employment will end, unless the worker has initiated a process in order to extend his employment. Even then, the possibilities for an extension are limited, such that the extension cannot last for more than a maximum period of three years, unless the IPS Commissioner is persuaded that there is justification for the extension. The very title of the IPS’ administrative arrangement, the “Consideration of the Extension of the Service of a Warden of Retirement Age Order” indicates the same point. By contrast, the retirement arrangement followed by the civil service and established by the provisions of the Civil Service Bylaws, reflects the perception that civil servants will generally be able to serve until the mandatory retirement age (67), unless the Civil Service Commissioner is persuaded that there are good reasons which justify an order requiring the worker to retire early (but not before reaching the age of 60, and only if the worker has served for at least ten years). For this purpose, the State must initiate a process, based on a reasoned request made to the Civil Service Commissioner by the responsible party at the relevant Ministry, asking for permission to order the worker’s early retirement. This request is examined by the Civil Service Commissioner, and the Commissioner decides whether or not to grant it.

A comparison between the factors and criteria mentioned in the Civil Service Bylaws for the purpose of exercising the Civil Service Commissioner’s discretion in this context, on the one hand, and the criteria and factors specified in the IPS’ Extension of Service Order, on the other, also reflects the differences in perception discussed above. For instance, the Civil Service Bylaws emphasize the reasons that could justify forced retirement prior to the mandatory retirement age, including reducing the Ministry’s work responsibilities or a reorganization, and the responsible party in the relevant Ministry must specify “why this employee specifically should be forced to retire.” If the reason is inefficiency, the responsible party must specify details that will prove that claim (s. 85.251 of the Civil Service Bylaws). The same Bylaws also provide that if the Civil Service Commissioner finds that the forced retirement of a worker is justified, he must send an appropriate notice, ninety days prior to the date set for the retirement, and the notice must specify the worker’s right to appeal to the Civil Service Committee – a committee appointed pursuant to the Civil Service Law – Appointments (see the Civil Service Regulations (Retirement) (Appeal of Forced Retirement), 5728-1968). This is an additional significant difference between the two arrangements. For instance, according to the arrangement used by the civil service, a separate and independent authority – the Civil Service Committee – reviews any decision made by the Civil Service Commissioner to force an employee to retire before he reaches the mandatory retirement age. In contrast, at the IPS, the IPS Commissioner himself adjudicates the warden’s appeal against the Commissioner’s own decision not to grant the warden’s request for an extension of his employment, and the Commissioner’s decision is final.

23. The respondent emphasized that after the Extension of Service Order’s arrangements were implemented, the average age for wardens’ retirement – those retiring only due to their age – began to rise. The respondent noted that the IPS Commissioner grants 82% of the applications submitted for extensions of employment, and added that “the employment of an IPS employee has, on more than one occasion, been extended beyond the age of 60.” Yet, the respondent did not specify the average length of employment extension for extensions applicants; the average age of retirement for IPS personnel in professional positions, compared to the average retirement age of all civil servants, at least compared to the average retirement age of civil servants holding equivalent positions; the number of cases in which the employment of wardens had been repeatedly extended; the percentage of wardens whose employment was extended beyond the age of 60; until what age employment was extended in those cases; or whether the employment of a significant number of wardens has been extended until or close to the age of 67. In the absence of these substantial data (it would appear that Zozal herself is included in the category of those whose employment was extended, according to a figure presented by the respondent, since her employment was extended for a period of six months), and in light of the restrictive provisions in the Extension of Service Order mentioned above, the respondent’s argument concerning this matter is insufficient to rebut the argument raised in the petition concerning discrimination.

I will further note that the respondent mentioned the reliance interest of the wardens as one of the justifications for the arrangements included in the Extension of Service Order. The claim made by the respondent is that when an individual decides to join the IPS, one of the considerations that he or she weighs is the fact that due to the high level of burnout involved in an IPS career, the retirement age is relatively young; this early retirement enables IPS workers to begin a second career after they leave the IPS. However, this consideration cannot serve as a justification for the retirement arrangement which is the subject of this petition. First, a reliance interest does not justify an arrangement that requires wardens to retire at the age of 57 based on a decision by the IPS Commissioner, and a solution can be found with respect to that interest, to the extent that it exists, by allowing wardens the opportunity to retire at that age, if they choose to do so (compare Nevo, at p. 756). Second, the wardens’ reliance interest, insofar as it exists, cannot by itself justify discriminatory arrangements. The alleged reliance interest argument (i.e., the argument that IPS workers have relied on the possibility of retiring at the age of 57) can be addressed by providing that the said early retirement age will apply only to those wardens who argue that they relied on the possibility of retiring at the age of 57, and who wish to do so. At the same time, for other wardens, who are not interested in the early retirement, the age of 57 will serve as a juncture at which the IPS Commissioner will examine the possibility of retirement, but this examination will be in a format similar to the above-described process used by the civil service and embedded in s. 85.52 of the Civil Service Bylaws, rather than conforming to the retirement arrangement set out in the Extension of Service Order.

24.  As a parenthetical note, and without deciding on the matter, I would add that the provisions in the Order relating to wardens from the operational sector (as opposed to IPS workers in professional, administrative, or staff positions, including Zozal), are also problematic. This is because the opportunity given to wardens from that sector to extend their employment pursuant to the Order’s provisions, is restricted and strictly limited to wardens “who make a unique contribution to the organization” or who “need an additional period of employment of no more than 12 months in order to fully exhaust their salary rights, or for whom an appropriate staff/administrative position has been found” (s. 5(b)(2) of the Order). It may be presumed that to the extent that the positions discussed herein are operational, the operational competence and physical fitness required for the job are a substantive consideration, which could justify the forced retirement of a significant portion of the wardens in this sector when they reach the age of 57.  However, in a different context, it has already been held that “the need for proportionality requires us to investigate whether it is possible, as a practical matter, to ensure this requirement of physical fitness… on the basis of an individual review” (Recanat II, at p. 355). This is because there may be workers whose physical fitness at an older age is better than that of younger wardens (see: Association for Civil Liberties, at pp. 367-369; LabA (NLC) 1414/01 Dead Sea Works Ltd. v. Nissim, (2004) (unreported), per Justice S. Tsur at para. 2 and per President Adler, at para. 2. See also Ben-Israel, supra, at pp. 1045-1050. With respect to the implementation of the principle of proportionality in the field of labor law in general and equal opportunity in employment in particular, see also Guy Davidov, “Proportionality in Labor Law,” 31 Iyunei Mishpat 5 (2008)). In our case, the IPS has not presented a proper foundation for the presumption on which the provisions of the Extension of Service Order is based – that a warden who serves in an operational position is no longer fit to carry out the requirements of his job once he has reached the age of 57, except in extremely unusual circumstances (compare Association for Civil Liberties, at p. 367, and see also the approach taken by the relevant American federal regulations, which require that there be a “bona fide occupational qualification” that justifies the establishment of a retirement age below the age of seventy in operational positions – 29 C.F.R. §1625.6; Western Airlines, Inc. v. Criswell, 472 US 400 (1985); Meacham v. Knolls Atomic Power Lab. 554 U.S. 84 (2008)). Nevertheless, there is no need, in the context of the case before us, to establish hard and fast rules regarding the provisions of the Order to the extent that they relate to the operational sector – these provisions raise an issue which, by its nature, is even more complex.

25. The conclusion to be reached from the above discussion is that the premise that age 57 should be the retirement age for all wardens, holding a wide variety of positions, unless the IPS Commissioner is persuaded that an extension for a limited time is justified – is improper. This conclusion is consistent with the trends that are developing in Israel and throughout the world regarding retirement arrangements. These trends have been expressed in recent Israeli legislation, including in the Retirement Age Law that was enacted in 2004, and which was preceded by the recommendations of the Public Committee for the Examination of Retirement Age, headed by Justice (emeritus) Shoshana Netanyahu. This Committee was instructed to examine the degree to which the structure of the labor market was prepared for the increase in life expectancy and for the expected proportionate increase of the elderly sector within the general population (see the Draft Retirement Age Law, 5764-2003, Government Draft Laws 64, 201. See also, Doron, supra, at pp. 894-895; Alon-Shenker, supra, at pp. 82-87). The majority opinion in the Committee’s report, submitted in July of 2000, recommended that the age for entitlement to a pension should be raised to 67 for both men and women, but the Committee also recommended that the change should be implemented gradually, by adding an additional year of work once every three years. The Retirement Age Law that was enacted following this report adopted part of the Committee’s recommendations; it raised the mandatory retirement age for men from 65 to 67, through a gradual process that concluded in 2009. The Law also established a mandatory retirement age of 67 for women, although a woman may still retire and receive a pension as early as the age of 62. The Law further provided that this retirement age may be raised to 64, if a public committee—to be established by the Minister of Finance—so recommends and the Knesset’s Finance Committee approves it (on 29 December 2011, an amendment to the Law provided that the public committee would submit its recommendations regarding this matter by 30 June 2016 – see Amendment 3 to the Retirement Age Law, SH 5772, 2328, at p. 92).

Thus, the developing trend in Israeli law clearly points toward an older retirement age for both male and female workers (and see, regarding this matter, the Law’s objective as defined in s. 1 of the Retirement Age Law). The Retirement Law was also amended on 18 January 2004 (Amendment 44), as part of the Economic Policy for Fiscal Year 2004 Law (Legislative Amendments) 5764-2004. This amendment added a new Part B to Chapter 9 of the Retirement Law, entitled “Non-Application.” It provided that the provisions of the Retirement Law, except for the exclusions set out in s. 108c of the Law, would not apply to a “new warden” who had joined the IPS after 31 December 2003; these IPS workers would be subject to the provisions of the new Part B (similar provisions were enacted concerning police officers and security forces employees). The purpose of the enactment of the above-mentioned Part B was to apply the cumulative pension method to security services workers, instead of the budgetary pension method that had been used until that time (see Government Draft Laws 64, 108 (5764)). Nevertheless, according to the language of the amendment, it also revokes the IPS Commissioner’s authority to order the retirement of a warden who has reached the “retirement age for a warden.” The respondent himself noted, in his response dated 4 February 2010, that “an officer who joins the IPS at the current time will be subject to s. 108 of the Retirement Law, and will thus be defined as a ‘new security force employee’ to whom the Retirement Law, including s. 73 which deals with the retirement ages for wardens and police officers, shall not apply” (s. 26 of the Response). Consequently, the Extension of Service Order – which essentially implements the authority given to the IPS Commissioner pursuant to ss. 73 and 81 of the Law – will not apply to “new wardens” as defined in Part B.

26.  Zozal joined the IPS in 1986. The provisions of the above-mentioned Part B of Chapter 9 therefore do not apply to her. However, it appears that when we examine the reasonableness and the proportionality of the provisions of the Extension of Service Order, we cannot ignore Amendment 44 of the Retirement Law which was enacted in 2004 – some five years before the enactment of the Extension of Service Order – and which added the above-mentioned Part B. The amendment indicates that the legislature sought to align the retirement age of a new warden with the retirement age set forth in the Retirement Age Law for all workers in the country. This fact greatly weakens – if not completely undermines – the respondent’s argument that the gap between the retirement age of all civil servants and that of a warden pursuant to the Retirement Law in its previous format (and the Extension of Service Order which was enacted to implement it) is necessary because of the nature of IPS service. And note: Part B does not distinguish in this context between wardens who serve in operational positions and IPS personnel who hold professional, administrative, or staff positions.

The Leiba Decision

27.  In his arguments, the respondent refers to this Court’s decision in HCJ 10022/08 Chief Superintendent Monal Leiba v. Israel Police Commissioner (2009) (unreported) (hereinafter: “Leiba”), where we examined the retirement arrangement established by the Israel Police after Rosenbaum (National Headquarters Order – Extension of Service). The respondent believes that these arrangements are similar to those of the IPS, and asks that we adopt the Court’s conclusions in the Leiba case with respect to the retirement arrangement established by the IPS in the Extension of Service Order. In the Leiba decision, this Court found that the Israel Police arrangement was reasonable, and that it reflected a proper consideration of the outline set out in Rosenbaum.

With respect to the National Headquarters Order – Extension of Service, this Court held as follows in Leiba:

‘A review of the procedures formulated by the Israel Police shows that they respond sufficiently to the defects which had led to the invalidation of the procedures in Rosenbaum. Indeed, even within these new procedures, age 57 remains, more or less, the default retirement age for members of the police force. However, while this is a uniform retirement threshold, it does not end the discussion and to the extent that any particular police officer wishes to postpone his retirement to a later age, he may apply to the relevant authority to have his employment extended. This examination is of course done on an individual basis, taking into consideration, first and foremost, the nature of the police officer’s job, which is understood to reflect the degree of burnout and pressure that accompany that job. Beyond this issue, the review takes into consideration the circumstances of the particular case as a whole, including the interests and characteristics of the police officer, on the one hand, and the needs of the system, on the other. It should be recalled that it is not in vain that the legislature distinguished between police officers and other civil servants with regard to retirement age. A distinction of this kind is not improper in and of itself, even if it means determining, in principle, a lower uniform threshold retirement age for the police force (and see Rosenbaum, at para. 15). While in the past, police procedures emphasized the age at which police officers could be ordered to retire as the determinative factor in deciding that they should in fact be ordered to retire, that age now serves merely as a starting point for a process, the main part of which now relates to a detailed examination of the issue, involving the exercise of discretion in a particularized manner and the consideration of all relevant factors’ (ibid., at para. 8. See also HCJ 515/08 Superintendent Aryeh Weintraub v. Police Commissioner Dudi Cohen (2008) (unreported); HCJ 7362/07 Chief Superinterndent Ran Katzir v. Police Commissioner (2008) (unreported); in both cases, this Court examined the interim arrangements established by the Israel Police).

 As noted above, the petition before us was originally heard by a three-judge panel (the honorable Justices (then) M. Naor, Y. Danziger and N. Hendel), and on 18 July 2010, the panel issued an order nisi ordering the respondent to explain why his decision to order Zozal’s retirement should not be overturned. The order also required that the respondent explain how his decision, which relied on the new retirement arrangements concerning the retirement of wardens, did not conflict with the holding in the Rosenbaum decision. In its decision, the Court noted that:

‘The continuation of the deliberation of this petition will be held before an expanded panel of five or more justices, taking into consideration, inter alia, the State’s reliance on this Court’s decision in Leiba, dated 25 June 2009…’

Thus, the three-judge panel directed that the retirement arrangement established by the IPS should be examined by an expanded panel, which would determine whether or not reliance on the Leiba decision in this context was appropriate.

Based on the reasoning set out above, I have concluded that the retirement arrangement established for wardens in the Extension of Service Order is discriminatory and should be struck down – at least to the extent that it relates to wardens such as Zozal who serve in professional, administrative, or staff positions. The retirement arrangement created by the Israel Police in the National Headquarters Order – Extension of Service was not presented to us, and therefore we have not carried out an exact comparison between that arrangement and the one used by the IPS. Nevertheless, and to the extent that this Court’s opinion in Leiba indicates a similarity between the two arrangements, it is inevitable for me to state that I disagree with the conclusion reached by this Court in Leiba. The Leiba decision dealt with a police officer who held the rank of Chief Superintendent, an engineer by training, who had served as the head of the projects department within the Construction Division of the Israel Police. This Court found that there was no justification for interfering with the process through which Leiba was compelled to retire, noting that – as quoted above – the retirement arrangement for police officers which established the age of 57 as a default retirement age conformed to the decision issued by an extended panel in Rosenbaum. For the purpose of establishing such conformity, this Court held, it was sufficient that the application for an extension of employment resulted in an individualized examination of the police officer in question. For the reasons specified above, I take a different view, and I believe that the retirement arrangement in the Extension of Service Order for wardens (at least as it pertains to those serving in professional, administrative, and staff positions, such as Zozal) is an arrangement that discriminates against those workers, as compared to other civil servants who hold the same type of positions, in the absence of any relevant justification for such differentiation. It is important to recall in this context that the presence or non-presence of discrimination is determined on the basis of actual outcome (the impact), and the lack of any intention on the part of the respondent to discriminate has no effect on the final determination that there has been discrimination (see Alhanati, at para. 27).

The Defects Concerning the Specific Decision in Zozal’s Case

28.  Despite the sufficiency of my conclusion that the IPS retirement arrangement with respect to wardens whose positions are included within the same category of positions as Zozal’s is improper, we will further examine the arguments that Zozal raised against the specific decision reached in her case.

The criteria outlined in the Extension of Service Order and which the Service Extension Committee is required to consider include the following: (a) considerations relating to the warden’s personal situation – the scope of the warden’s entitlement to a pension and his financial and family situation; (b) considerations relating to the warden’s potential contribution to the IPS – an assessment of his job performance, and of the nature and character of his job; his service history, the length of his term of office and the number of years at his current job; his medical condition; the degree to which he is essential to his job, the possibility of repositioning him, and the potential for finding a placement for him within the IPS and for promoting him; and (c) systemic considerations of the IPS, and considerations relating to the realization of the organization’s objectives.

Assuming that all these considerations are relevant, and assuming further (which we do not accept) that the mechanism established in the arrangement involving the review of a possible limited extension of employment beyond the age of 57 is appropriate, a question remains as to the weight that the Committee should attribute to each of the listed considerations when it makes its recommendation regarding the requested extension. When Zozal’s request was deliberated by the Service Extension Committee, it noted her personal circumstances and her financial situation, which indicated that she needed to be able to stay at her job at the IPS. It also noted her positive performance at the Legal Department, on the one hand, and the fact that she was not suitable for other positions in that Department, on the other. Given all these considerations, the Committee at first decided not to recommend that her employment be extended. However, when it became clear that there was an organizational need for Zozal to continue to hold her job at the Legal Department, the Committee changed its recommendation and decided to recommend that her employment be extended for a single year. The respondent adopted this recommendation, partially, as noted, and ordered an extension for only six months. And behold - at her interview with the HR Director following the appeal that she submitted against the respondent’s decision, she learned that the main reason for the decision not to extend her employment for a longer period was the fact that she served in a position intended to be held by someone with the rank of Superintendent, even though Zozal was earning the salary of a Chief Superintendent, because of the “Flexible Chief Superintendent” arrangement that was in place at the time. The respondent emphasized and expounded upon this aspect in his response to the petition, arguing that the IPS had been working toward terminating this arrangement since the year 2000. He had even announced, on 13 December 2007, that arrangements were being made to end the arrangement completely during the course of the 2008 work year. As part of this development, the respondent added, he had ordered the retirement of all wardens to whom the “Flexible Chief Superintendent” arrangement was applied, and Zozal’s retirement was part of the implementation of that order. The respondent also noted that this was the main reason not to extend Zozal’s employment, and her forced retirement should therefore not be viewed as age-based discrimination, because the decision to order her retirement was not based on her age, and was instead a result of the nature of the position that she held.

29. It is undisputed that the respondent has the prerogative and the authority to terminate arrangements such as the “Flexible Chief Superintendent” arrangement (regarding the reasonableness of terminating a parallel arrangement followed in the Israel Police, see and compare LabC (TA) 2414/04 Ashed v. Israel Police (2007)). Nevertheless, the question remains as to how this factor should be weighed, if at all, in reaching a decision regarding the time at which a warden seeking to extend his employment should be made to retire – and this is not a simple question. On the one hand, the IPS is a multi-dimensional organization with a hierarchical structure, and any decision regarding the acceptance of a worker into the organization, or the dismissal of a worker from the organization, should take into consideration systemic factors and the organization’s overall objectives (see Leiba, per Justice Joubran, at paras. 9-10). On the other hand, and the case under discussion here is an example, making this consideration a main factor upon deciding a warden’s request for an extension of his employment may lead to the “elimination” of all other considerations, including a warden’s personal circumstances, thus making it all too simple to remove from the service wardens who have reached the “retirement age for a warden,” in accordance with the outline established in the Order, which requires such wardens, as stated, to submit requests for extension of service.

30. In this case, we learn from the remarks of the HR Director, made at Zozal’s interview with him on 31 December 2009, and from the respondent’s affidavit and the documents attached thereto, that the IPS’ organizational objective of terminating the “Flexible Chief Superintendent” arrangement became a determinative factor in Zozal’s case. It also appears that the other relevant factors that should have been considered were not given their proper weight. Zozal doubts that this was the actual main consideration and argues that it served to conceal the fact that the real reason for her being forced to retire was her age. However, even if, for this purpose, we shall accept the respondent’s explanations, a difficulty arises with regard to the process through which the decision was reached. This is because the rejection of Zozal’s request for an employment extension could not have been based solely on the IPS policy to terminate the “Flexible Chief Superintendent” arrangement, important as it may be. The manner in which the respondent presented this issue indicates that a decision was made to terminate the “Flexible Chief Superintendent” position, and because no suitable legal position for a worker with a Flexible Chief Superintendent rank could be found for Zozal, the die was cast and no other factor was examined when considering the extension of her employment. This was the case, even though there were other factors that should have been considered.

Conclusion

31. For the reasons discussed above, I believe that the retirement arrangement set out in the Extension of Service Order, which applies to all IPS wardens (except new wardens, to whom Part B of Chapter 9 of the Retirement Law applies) conflicts with the principles established in Rosenbaum. It discriminates, unjustifiably, between IPS wardens – at least between wardens who serve in professional, administrative, or staff positions – and all other civil servants in comparable positions. The respondent has not shown any relevant facts justifying the assumption on which the Extension of Service Order is based. According to this assumption, age 57 is the retirement age that should be imposed on all wardens, whatever positions they hold, unless an application for an extension of employment is submitted and granted by the IPS Commissioner – and no such extension, even if it is approved, may exceed three years cumulatively, or extend beyond the time the warden reaches the age of 60. I did not find any satisfactory explanation in the respondent’s arguments for the substantial disparity between this arrangement and the retirement arrangement that applies to all civil servants pursuant to s. 82.52 of the Civil Service Bylaws. I also did not find, in those arguments, any satisfactory answer to the question of why wardens – at least those who serve in professional, administrative, or staff positions – should not be subject, like other civil servants, to an arrangement that allows them to continue to serve until the mandatory retirement age (67), unless the IPS Commissioner is persuaded – after deliberating on a reasoned application submitted to him by the party responsible for the warden whose dismissal is sought – that there are reasons justifying the warden’s retirement prior to that age.

I would therefore suggest to my colleagues that we make the order nisi an order absolute, and that we direct that the Extension of Service Order be struck down, to the extent that it relates to wardens serving in professional, administrative, or staff positions. I would also suggest that this invalidation be delayed for a period of 12 months in order to allow the IPS to prepare; and that during this time, the IPS should prepare new arrangements that are consistent with the principle of equality. I would also suggest to my colleagues that they order the revocation of the decision regarding Zozal’s forced early retirement, a decision which was reached pursuant to that arrangement. As may be recalled, Zozal’s requests for an interim order as part of this petition were denied in light of, inter alia, the respondent’s position that “the continuation of [Zozal’s] absence from the Service, as a retiree, is reversible, and it will not be a problem for her to be paid her full benefits if such payment is ordered at the end of the main proceeding, in accordance with the outcome of that proceeding” (see para. 35 of the respondent’s Answer dated 24 August 2012. See also the decision issued by Justice M. Naor on 3 October 2010). Under these circumstances, and given the conclusion that we have reached, I believe that Zozal should be allowed to return to the ranks of the IPS at the salary and rank that she held before her retirement. At the same time, we must clarify that Zozal has no vested right to return to the position that she held before her forced retirement, and that she will be given a position in accordance with the needs of the IPS.

Finally, I would suggest that the respondent be ordered to pay Zozal her trial costs and attorney’s fees – in the amount of NIS 30,000.

 

Vice President M. Naor

I agree with the comprehensive opinion of my colleague, Justice E. Hayut, and with her operative conclusions. The Extension of Service Order is deficient in that its default option is retirement at the age of 57, which is ten years earlier than the retirement age for the civil service. The Order is also deficient in that the burden of proof is placed on the worker to prove that there is good cause for his employment to be extended, and not the reverse, as is the practice in the civil service. This does not mean that there can be no arrangement which will allow retirement at an earlier age for those who seek it, and there are apparently many who do seek such early retirement. However, mandatory retirement at an early age, against the worker’s wishes, cannot be the default option (see and compare HCJ 10076/02 Rosenbaum v. IPS Commissioner, at pp. 877-878.)

 

Justice U. Vogelman

I agree with the comprehensive opinion of my colleague, Justice E. Hayut.

 

 

Justice S. Joubran

1. The proceeding before us raises a painful issue, yet to be sufficiently discussed in Israeli society – age-based discrimination in the job market. Life experience has taught us that despite the competence of older employees, the perception persists within the job market that a young worker should be preferred over an older one. The concrete question arising in the proceeding before us relates to the arrangement established in Commission Order 02.33.00 – Consideration of the Extension of Service for a Warden of Retirement Age (hereinafter: “the Order” or the “Extension of Service Order”) which regulates the forced retirement of workers, beginning at age 57. This question must be examined in light of the general context of the laws that apply to older workers in the labor force, including the laws that apply to all civil servants. I have read the opinion written by my colleague, Justice E. Hayut, who believes that the arrangement created for IPS workers does not comply with the requirements of reasonableness and proportionality, and that it should be struck down – because it discriminates between civil servants and IPS workers. I note that the decision in this proceeding will have direct consequences for the arrangements that apply to employees of the Israel Police, which were discussed in HCJ 10022/08 Leiba v. Israel Police Commissioner (2009) (unreported). It is also possible that our decision here will have an impact on the arrangement for those serving as career soldiers in the IDF and in the other intelligence and security forces. (As these arrangements are not before us in this case, we need not examine the substance of those arrangements in the context of this proceeding.) After reviewing the opinion written by my learned colleague Justice E. Hayut, I found that I agreed with her with respect to the outcome of the decision in this specific case - that the petitioner should be returned to her place of employment. However, I found that I could not agree with Justice Hayut’s conclusion that the arrangement established for IPS workers should be invalidated in its entirety. I will explain my reasoning below.

Previous Proceedings

2.    The retirement arrangement for police officers and wardens has been examined by this Court in various iterations. In Rosenbaum, the Court examined the arrangement that was in place before the current one; pursuant to that arrangement, all Israel Police and IPS workers were required to retire when they reached the age at which forced retirement was permitted (initially 55, and later on 57). In the Rosenbaum decision, President A. Barak held that the relevant peer group consisted of all civil servants, and that the policies of the Israel Police and the IPS discriminated on the basis of age in a disproportionate manner. He found that this was the case for three reasons. First, he held that there was no substantive reasoning given for the determination that the retirement age would be 55 (and later, 57). Second, he held that the disparity between the retirement age for civil servants and that established for police officers and wardens was substantial and that it indicated a level of inequality. Third, he found that a collective arrangement that did not take into account the individual characteristics of the various workers was disproportionate in its impact. Based on these findings, this Court ordered that the arrangement should be invalidated.

3.    After the Rosenbaum judgment, the Israel Police and the IPS changed their policies and established new retirement arrangements. The interim arrangement established by the IPS, which was in place until the permanent procedure was adopted, provided that an IPS worker who had reached retirement age would be subject to a suitability review with respect to his continued employment, which would be based on his individual circumstances (as explained below, this procedure is similar to the procedure discussed in the case before us). The IPS examined the continued employment of the petitioners in Rosenbaum based on that procedure, and found that there was no need to re-employ Junior Commissioner Lazrian. Lazrian challenged the decision of the IPS Commissioner in another petition to this Court (HCJ 4545/07 Lazrian v. IPS (2008) (unreported)). This Court (Justice U. Vogelman, with concurrences by (then) Vice President E. Rivlin and Justice E. Rubinstein) denied the petition. The Court held as follows:

‘There is also no justification for a claim that the dismissal constitutes age-based discrimination, since – as noted further in the decision regarding the petitions – the dismissal of the petitioner was based on his concrete individual circumstances, rather than solely on the fact that he had reached 55 years of age. It cannot be denied that at the time it was decided to dismiss him, the reality was that workers were generally released from service at age 55. Nevertheless – and this was made clear in the letter from the Administration Director, dated 10 August 2003 and in the Court’s judgment regarding the petitions, the petitioner’s dismissal was based on other factors, in addition to his age (ibid., per Justice U. Vogelman, at para. 8).

4. The Court thus held that despite the fact that the petitioner’s age was at the background of his dismissal, the fact that the dismissal itself was also based on factors other than his age was sufficient to reject the claim that age-based discrimination had been involved in the dismissal process. The interim arrangement established by the Israel Police has also been subjected to judicial review. In HCJ 7362/07 Katzir v. Israel Police Commissioner (2008) (unreported), (then) Justice E. Grunis, writing for this Court, held that the Police Commissioner’s decision pursuant to the interim arrangement did not justify judicial intervention – because the arrangement was temporary, and was only meant to be in force during the period in which the permanent arrangement called for in Rosenbaum was being formulated. A review of the judgment indicates that the procedure described therein is not substantively different from the permanent procedure established by the Israel Police. For the same reason, the petition in HCJ 515/08 Weintraub v. Israel Police Commissioner (2008) (unreported) was also denied.

5.  Later on, in Leiba, this Court dealt with the arrangement established by the Israel Police, while in the case before us we are faced with the arrangement established by the IPS. Both arrangements have similar characteristics. Because the Israel Police arrangement was described in my opinion in the Leiba decision (see paras. 6-7), and the IPS arrangement has been described at length in the opinion written by my colleague Justice E. Hayut (see paras. 3 and 19-21), I will only discuss their main aspects. In brief, the starting point for both arrangements is a retirement age of 57. Nevertheless, the arrangements stipulate that either a police officer or a warden wishing to defer their retirement may apply to the relevant authorities within the Israel Police or the IPS for continuation of their employment. That request is decided on an individual basis, taking into account the system’s needs, the applicant’s functioning, his financial situation and the personal significance that the retirement will have for him.

6.    Based on this set of facts, the Court held in Leiba that the arrangement established by the Israel Police was reasonable and proportionate, and did not conflict with the principles set out in Rosenbaum – because even though the age factor is the starting point in deciding whether the worker is suited for the position, it is not the end point. When a worker objects to early retirement, the actual retirement decision is based on the worker’s individual skills and suitability for the position, and not on his age.

7.    As stated, the arrangement established by the IPS is similar in its nature, and it is this arrangement that we must review in the case before us. My colleague, Justice Hayut, found that the arrangement does not satisfy the reasonableness and proportionality requirements. Therefore, according to her, this type of retirement arrangement must be invalidated. Because this issue is now a matter of dispute – this time before an expanded panel – I have decided to discuss in depth the considerations that have led me to the conclusion that the arrangements need not be invalidated in their entirety, and I shall note the principles that the government authority should follow in implementing the arrangement with regard to specific workers.

Age-based Discrimination and Administrative Discrimination

8.    It is beyond dispute that age-based discrimination is prohibited. This prohibition is derived from the principle of general equality, which applies to all areas of law. In labor law, this prohibition is expressed specifically in the Equal Employment Opportunities Law. Through this concrete piece of legislation, the legislature created an efficient and effective mechanism for exercising the rights of workers who have suffered from discrimination, which includes the establishment of burdens of proof, special litigation procedures, remedies for claimants, and criminal offenses based on acts of discrimination. In this context, I noted the following in a previous case, concerning the relationship between the Prohibition of Discrimination Concerning Goods, Services and Entry into Public Areas and Entertainment Sites, 5761-2000 and the Basic Law: Human Dignity and Liberty:

‘It is proper to interpret a specific statute, particularly when the statute contains constitutional language as it does in this case, in a manner that is consistent with the general constitutional framework of Israeli law […]. It is clear that this does not mean that the particular statute is rendered irrelevant. The particular statute creates a legal framework that reflects the manner which the legislature decided is proper for dealing with the constitutional violation in the given context. Thus the statute prohibiting discrimination shapes the exercise of the right to equality in the civil sphere on two planes – the scope of the application of the right, and the nature of the remedy for a violation of the right’ (LCA 8821/09 Projinsky v. Good Night Productions Ltd. (2011) (unreported) (emphasis added – S. J.); regarding the interpretation of specific pieces of legislation as specific arrangements that are meant to protect the constitutional right in equality contexts, see also HCJ 10662/04 Salah v. National Insurance Institute, per Justice Joubran, at paras. 3-4 (hereinafter: “Salah”)).  

9.    Although the Equal Employment Opportunities Law does not directly list retirement-related discrimination as one of the areas to which it will apply, I agree with my colleague Justice E. Hayut that this issue is covered by that law. This is because of the principle that a law that protects a constitutional right should be construed broadly. The conclusion that the law applies to age-based discrimination is also supported by the fact that the list in s. 2 (both the list of types of discrimination, and that of types of issues covered by the Law) is an open list; and by the fact that the harm caused by forced retirement (such as the reduction of the pension rate to be paid) may constitute a reduction of “benefits and payments given to a worker in connection with retirement from employment” (s. 2(6) of the Equal Employment Opportunities Law).

10.  Against this background, we must examine the question of whether the IPS’ permanent arrangement violates the principle of age-based equality. For this purpose, we must first identify the peer group that is relevant to an age-based distinction. The approach of my colleague Justice E. Hayut concerning this issue, which is based on the decision in Rosenbaum, is that the relevant peer group for determining whether discrimination is being practiced on the basis of age is the group consisting of all civil servants. As I shall explain, my view is that the correct classification for differential treatment on the basis of job or place of work is the category of administrative discrimination, which is not related to the constitutional right to equality. The question of what law applies in a situation where an employer treats workers differently, but not on the basis of an unlawful classification such as gender, sexual orientation, age, etc. – is not a matter of violation of a constitutional right and is instead, as stated, a matter of administrative inequality. Thus, if the employer is a private party who determines that workers in various departments are to receive different salaries, it is doubtful that the Court would intervene in that employer’s implementation of that determination. (However, if a correlation between the groups of workers receiving different salaries and the suspect classifications could be proven, there would be a basis for claiming that there was unconstitutional discrimination). This does not mean that weight should not be given to the distinction between civil servants, on the one hand, and police officers and IPS personnel, on the other, which, as I explain below, gives rise to difficulties in and of itself, regardless of whether or not it constitutes age-based discrimination. It should be noted, even at this early stage, that the fact that other civil servants are not the relevant peer group for examining the issue of age-based discrimination does not mean that this comparison carries no importance in the constitutional analysis. A determination of whether there are alternative arrangements that exist within the national labor force in general and within the civil service in particular, allows us to examine whether the constitutional violation – if such in fact exists – is proportionate, or whether there are other measures available that cause a lesser violation.

11.  At this stage, I note that from a theoretical standpoint, a violation of equality can be reviewed on two tracks. Such violation can be reviewed on a single-stage track, according to which when a relevant difference between the groups exists, there has been no violation of the principle of equal treatment. This is the case even if the relevant difference does not relate directly to the feature on the basis of which the distinction is made, but rather to its indirect characteristics (for example, a statistical correlation between age and physical fitness can constitute a relevant difference when physical fitness is necessary for job performance, and there is therefore no violation of the principle of equality), or to external considerations (such as a social policy, security needs or possible additional costs). Alternatively, a violation can be reviewed on a two-stage track. In this framework, the first stage involves only an analysis of the question of whether there is a relevant difference between two individuals, who differ only with regard to the distinguishing characteristic itself. At the second stage, the question examined is whether – assuming that the distinguishing characteristic is itself not a relevant difference – it is nevertheless proper to allow the distinction because of considerations that are external to the distinction (further to the example given above – even if it is found that the use of age as an indication of physical fitness is indeed discriminatory, it may be that such discrimination will nevertheless satisfy the conditions of the limiting paragraph in the Basic Law: Human Dignity and Liberty, given the costs savings derived from reliance on age as a basis for differential treatment, in the particular context). In my view, the structure of Israel’s Basic Laws indicates that the legislature preferred the latter model, according to which the violation of the right is examined first, and if such a violation is found to exist, the next matter to be determined is the issue of compliance with the limiting paragraph. This is the procedure that is often adopted in case law dealing with violations of the principle of equality (and see a similar treatment of this issue in paras. 24-25 of President D. Beinisch’s decision in Salah; HCJ 1213/10 Nir v. Knesset Chairman (2012) (unreported), per President D. Beinisch, at para. 17 (hereinafter: “Nir”); for a different approach, see, for example, Nir, per (then) Justice Naor, at para. 2). This is also the outline for analysis that I myself used in earlier cases, and I follow it in this case too (see Nir, per Justice Joubran; HCJ 466/07 MK Galon v. Attorney General (2012) (unreported), per Justice Joubran).

Discrimination among Different Groups of Civil Servants

12.  As noted above, the first issue arising in this case is the question of whether the fact that a distinction is made between all civil servants, on the one hand, and police officers and IPS workers (who are also State employees), on the other hand, is a distinction that rises to the level of discrimination. If it does rise to that level, it is also necessary to determine whether the discrimination is prohibited, or whether there are good reasons for such discrimination to be practiced.

13.  It is clear that the answer to this question does not depend only on whether or not age-based discrimination has been practiced, and many examples of different benefits given to workers in different sectors of the State can be found in many other contexts – benefits that do not depend on the worker’s age (for example, risk premium paid to those holding certain jobs; different restrictions on the scope of overtime hours available to workers in similar positions, etc.).

14.  Before discussing the case itself, I will refer briefly to the normative framework governing this matter. The starting point is that the State must treat all parties equally – both as a sovereign state, when coming into contact with its citizens – and as a private entity, as an employer. It is undisputed that when the nature of the work is different, the employment conditions for civil servants may be different, and this does not constitute discrimination. This is the case as long as there is a connection between the difference in the nature of the work and the different employment conditions. In this context, the legislature established different employment arrangements even among civil servants who are similarly subject to the Civil Service Commissioner – arrangements that differ because of the nature of the position. For example, it was determined that the retirement age for kindergarten teachers is different than the general retirement age for civil servants – the retirement age for most kindergarten teachers being 59 (s. 64 of the Civil Service Law (Retirement) [Integrated Version] 5730 – 1970).

15. Consequently, there are situations in which, because of the differences in the employment framework, the legislature has conferred parallel authorities to various agencies with respect to the determination of terms of employment in their particular areas. This is the situation in our case, in which the legislature expressly provided that the IPS Commissioner and the Police Commissioner will have powers parallel to those of the Civil Service Commissioner (parallel authority was also given to the Chief of Staff of the IDF, see s. 13 of the Career IDF Service Law (Retirement) [Integrated Version] 5745-1985; similarly, an alternative arrangement was also established for judges, which sets their retirement age at 70 and enables early retirement under certain circumstances (s. 13 of the Courts Law [Integrated Version] 5744-1984). It should be noted that the statutory provision does more than establish the identity of the party who is authorized to force an early retirement – it also includes a full, detailed arrangement regulating all issues relating to the worker’s retirement, such as the calculation of the rate of the pension, and the scope of the relevant party’s authority to intervene with respect to that rate, under various circumstances.

16.  It is clear that since the relevant statute expressly establishes different and separate arrangements concerning retirement in different sectors of the civil service, the discretion exercised by one authorized party cannot be made subject to the discretion of another authorized party (however, it should be noted that in the current proceeding, neither party is challenging the constitutionality of the law by arguing that the exclusion of IPS, Israel Police and IDF workers from the authority of the Civil Service Commissioner is unlawful). This is particularly relevant when the retirement arrangement for all civil servants is different from that established for those working for the IPS or the Israel Police. In this context, it may be that different authorized parties will choose to act differently, but both courses of action will nevertheless be deemed reasonable, such that this Court’s intervention would not be justified. The Court only examines whether the action falls within the realm of what is reasonable, and it need not substitute its own judgment for that of the government authority regarding the optimal manner for handling the issue. This is true, too, when a parallel authority is given to two different entities that have similar features. A fortiori, a comparison of the manner in which the parties holding parallel authority exercise that authority does not lead to the conclusion that the policy followed by one of the parties is unreasonable, if the entities involved are different in nature (such that even if they were both subject to a single authorized party, the determination of a different set of rules for each entity would be appropriate).

17.  In the current case, the arrangements established by the IPS and the Israel Police are fundamentally different from the arrangement established by the civil service. In this context, I agree with the respondent’s argument that the arrangement was formulated on the basis of comprehensive administrative work – which included consulting external experts – taking into consideration the unique nature of the work of IPS wardens and police officers. For example, these workers are not subject to the Work and Rest Hours Law, 5711-1951 – unlike other civil servants. Additionally, research carried out for the purpose of formulating the procedure – the quality of which has not been challenged by the petitioner – shows the different level of burnout that police officers and IPS workers, including administrative workers, experience. Similarly, the pension arrangements that apply to police officers and to IPS workers are themselves different from the pension arrangements that apply to civil servants. These reasons – to which we must add the difference in organizational structure – explain the differences between procedures for mandatory early retirement in the civil service as opposed to such procedures in the Israel Police and in the IPS. It is clear that there are many more civil servants than there are police officers and IPS workers. Thus, if the civil service adopted an arrangement similar to that used in the IPS, the Civil Service Commissioner and the Committee would be significantly more burdened; this is an additional justification for the difference between the two arrangements.

18.  In light of all of the above, I believe that if the issue at stake here was the distinction made between civil servants, on the one hand, and police officers and IPS workers, on the other hand, it would be proper to deny the petition because of the significant difference between all of the members of the first group and all those of the second. I do not find that the petitioner proved, satisfactorily, that the different manner in which the Civil Service Commissioner and the IPS Commissioner exercised the discretion given to each of them, respectively, shows that there has been any administrative discrimination. This is the case due to a relevant difference which exists between the nature of the work done by IPS workers and the work done by other civil servants. I believe that in a situation in which the legislature expressly provided that two administrators would carry parallel authorities, it is not proper for us to determine that a decision reached by one of them should bind the second, and we should examine the reasonableness of each administrator’s decision on its own.

19.   To sum up the points discussed above – I believe that it would not be proper to invalidate the Order on an administrative discrimination ground, for two reasons. First, it is not discrimination, given that the legislature expressly provided that the IPS Commissioner would have parallel authority with respect to the early retirement of IPS workers, and did not subject IPS wardens to the same arrangement that applies to other civil servants. There is therefore no justification for this Court to deviate from the arrangement established in the Law and to make the discretion of the IPS Commissioner subject to that of the Civil Service Commissioner. Second, I find that there is a relevant difference between the nature of the positions filled by all civil servants, on the one hand, and the nature of the positions filled by IPS wardens, which itself justifies the difference between the two arrangements.

20. Before I move on to an examination of the Order itself, I wish to note at this stage that my holding here should not be understood to mean that I am satisfied with the fact that there are two separate retirement arrangements for civil servants, in two different frameworks. It may very well be that the government should dictate a uniform policy with regard to the retirement age for all civil servants, and that it should take action to amend the Law, to the extent necessary.

Constitutionality of the Commissioner’s Order

21.  Since I have found that the Order should not be invalidated on the basis of the difference between the arrangement it establishes and the arrangement in place for all civil servants, I now turn to examining the Order itself. My colleague Justice E. Hayut wrote in her opinion that “the arrangements established in the Extension of Service Order constitute an unreasonable and disproportionate violation of the principle of equality” (para. 19 of Justice Hayut’s opinion). She therefore did not discuss the issue of the distinction to be made between examining the Order’s proportionality and examining its reasonableness. A review of this Court’s case law shows that as a rule, when a claim is made that an administrative decision violates a constitutional right, the claim must be examined in accordance with the various proportionality tests (see HCJ 11437/05 Kav La’Oved v. Minister of the Interior (2011) (not yet reported). I noted, in this context, that:

‘The proportionality requirement is the proper legal construct for examining a restriction on the realization of a constitutional right, by a legal norm whose legal status is less than constitutional […] I believe that the proportionality standard stands together with the reasonableness claim in this case, which, as is known, is the main standard used for assessing the exercise of administrative discretion. In this case, as stated, there is a clash between human rights and the general public interest. This leads to the fact that the limiting paragraph, which requires that a measure must have a proper objective and be proportionate, can serve as the proper mechanism for achieving a balance between the objective and the harmful measure being examined. In actuality, the reasonableness of the measure will also be examined this way, in light of the substantial similarity between reasonableness and proportionality in cases such as these’ (ibid., per Justice Joubran, at paras. 6-7, and the references cited there).

22.  These remarks are pertinent in this case too. As described below, the issue under discussion here is the constitutional issue of age-based discrimination. The administrative norm, to the extent that it violates a constitutional right, must therefore comply with the requirements of the limiting paragraph, which in any case “absorbs” the reasonableness requirement as part of the third proportionality test. I will therefore turn to examining the Order’s proportionality. Based on my conclusion, explained below, that the Order is for the most part proportional, I will then move on to examine the manner in which the arrangement has been implemented.

Age-based Discrimination

23.  A practice is discriminatory if two individuals who have the same characteristics are treated differently because of an irrelevant distinction that is made between them. It should be recalled that as part of our examination of the relevant distinction, we also need to determine whether the discrimination is an indirect outcome of a discriminatory reality. For instance, the test for determining whether a salary structure discriminates against women involves examining whether a man holding the same position receives a higher salary (see HCJ 1758/11 Goren v. Home Center (Do it Yourself) Ltd. (2012) (unreported)). The question of whether other women in different departments receive a salary that is similar to that of a man is irrelevant. Similarly, the test for determining whether or not there is age-based discrimination is the question of whether a worker with the same skills required for doing the work is treated differently only because he is younger. In this context, it is important that the skills required for the job are truly relevant to the work, and are not used as a pretext for enabling discrimination.

24.  In this context, it is clear that any arrangement that mandates retirement may potentially fall within the definition of age-based discrimination, since by its very nature, it distinguishes between younger and older workers regardless of their skills or work abilities. Nevertheless, a uniform retirement age is generally viewed as a measure based on good reasons, since the objective of retirement is an important social objective. The Retirement Age Law, 5764-2004, by establishing a national retirement age, prevents employers from directly or indirectly pressuring their workers not to retire (an example of such pressure would be reducing workers’ salaries over the years, so that they would not be entitled to a dignified pension when they do retire). In other words, the Law should be seen as part of a set of protective laws, which seek to create a humane and non-exploitative job market. It should also be noted in this context that the age at which a worker must retire reflects a balance between the need to allow for a sufficiently lengthy period of employment, such that the worker can accumulate a substantial pension that would support him with dignity; the public’s need to have broad segments of the population participate in the work force; and the need to protect the right of workers to retire as a de facto right and not only a de jure right. In any event, the constitutionality of s. 4 of the Retirement Age Law has not yet been discussed by this Court, and the parties have made no claims regarding that issue in the current proceeding.  Consequently, and at least for the purpose of the current discussion, I will presume that there is no violation involved in the establishment of a uniform retirement age, given that the violation of the right to age-based equality, provided by that uniform retirement age, is proportionate (for a discussion of this matter, see HCJ 4487/06 Kelner v. National Labor Court (2007) (unreported); LabA (NLC) 14705-09-10 Mutzafi v. Bank Leumi Le-Israel Ltd. (2012) (unreported)).

25.  The issue is different when it comes to an arrangement that enables a worker to retire earlier than a mandatory retirement age. Such an arrangement, so long as it truly reflects the worker’s free will, is a privilege granted to that worker. It is clear that in this case, the privilege is given to the older workers, based only on their age. It could be that under certain circumstances, that advantage could generate its own difficulties. Because this issue has not arisen in this case, I see no need to discuss it, and the difficulties that it may generate will be discussed when they do arise.

26. The proceeding before us deals with the group of workers who are entitled to early retirement but who wish to continue to work. For these workers, their forced retirement is a difficult blow, on two levels. First, on a symbolic level, as their forced retirement, based on nothing except their age, sends the message that older workers are not qualified. This message hurts the core of a person’s dignity – a person who, only because of his age, is identified as being of little worth. Second, forced retirement often involves a considerable degree of financial harm. A worker who has not yet worked long enough to be entitled to a maximum pension will be left with only a partial pension during his final days, and it is unlikely that he will find new employment that will increase his financial security. Even for a worker who is entitled to a maximum pension, the meaning of retirement is a significant reduction of approximately 30% of his monthly salary.

27. In light of the above, the IPS arrangement – like any other mandatory retirement regime – does in fact violate the constitutional right to equal treatment, in that it discriminates on the basis of the worker’s age. The constitutional question that arises in the case before us is whether or not the additional violation generated as part of the arrangement is nevertheless permissible because it satisfies the requirements of the limiting paragraph. But before we can discuss the proportionality of the arrangement, we note that it is undisputed that the authority given to the IPS Commissioner is expressly granted in the statute. Additionally, the arrangement conforms to the values of the State of Israel, and in particular the values that form the foundation of Israel’s labor laws.

28.  Consequently, under the presumption that the law itself does not disproportionately violate the wardens’ rights, it seems that the very existence of an early retirement arrangement is for a worthy purpose. Its objective is to establish a balance between the protection of the individual’s rights, and the public need to have those IPS workers aged 57-67 who are no longer fit to continue in public service removed from their jobs. In this context, the Order’s own objective is to allow the Commissioner to force certain workers to retire even though they do not wish to retire, when the worker is no longer qualified to perform his work. (As noted above, the parties do not claim in this proceeding that the use of age as a statistical indicator of fitness for work or of the deterioration thereof is itself a violation, nor has any challenge been made regarding the range of ages in which the Commissioner can order early retirement). For this reason, the core of the deliberation is the question of the arrangement’s proportionality. In this context, we note that there are different components to the IPS arrangement, and the degree of violation of the equality principle caused by each component is also different. In my view, there is no justification for examining all of these components together (since separate parts of the arrangement may be invalidated, instead of a sweeping invalidation of the entire arrangement). In this vein, I will now examine the proportionality of the various components of the arrangement.

The Starting Assumption of the Arrangement

29. As explained above, the arrangement’s basic assumption is that once an IPS worker reaches the age of 57, he must apply for the right not to retire. In my view, this assumption is a proportionate measure. As I noted in Leiba, this starting assumption is only the first stage of the process, followed by examining the suitability of the individual worker. As stated, the Law’s starting assumption is that there is a rational connection between a worker’s age and the degree to which his fitness has deteriorated. On the basis of this, there is – in the context of the Order – a reasonable connection between the degree to which the worker’s fitness has deteriorated (and, consequently, between his age) and the purpose of examining his forced retirement. Thus, this component of the arrangement satisfies the first test for proportionality. I therefore did not find that this assumption does more harm to the worker than the reverse – in which the employer is the one to initiate the dismissal process. In both cases, the harm done to the worker’s dignity is similar, and in both he is aware that as of age 57, the employer can force him to retire. Even if, symbolically speaking, there may be a difference between the two alternatives, I believe that it is negligible, and there is no indication that there exists a less restrictive way to achieve the interest at hand. Consequently, the basis of the IPS arrangement also satisfies the third test for proportionality. A presumption that assumes that a worker will want to retire early has real advantages, as it does not require the workers who do wish to retire early to take any action in order to retire when they wish to do so. As stated, the marginal excess violation inherent in this presumption is of lesser magnitude. In my opinion, it does not justify a determination that there is a disproportionate violation of the right to equality inherent in the mere assumption that the continued employment of a worker will be examined only if he is interested in remaining in his position.

Standards for Evaluating an IPS Worker

30.  According to s. 7 of the IPS Order, an IPS worker’s application for continued employment is evaluated on the basis of six criteria: an assessment of his job performance, the nature and character of his job; his service history, the length of the term in his current job, and the length of time during which he has been at his current position; his medical condition; the degree to which the continued employment of the particular individual, in his particular job, is essential; the possibility of transferring him to a different position and the potential for reassigning him (including the requirement that he undergo training for the purpose of performing a different job); the scope of the worker’s entitlement to pension; and the worker’s own financial and family situation. Alongside these, the Order also allows for the consideration of “additional general IPS considerations and the realization of IPS objectives.”

31.  I start by noting that at any stage during an IPS worker’s employment, the IPS Commissioner may order his dismissal, if it has been shown that the worker is in some way not qualified for his job. Section 80(c)(2) of the Prisons Ordinance [New Version] 5732-1971 (hereinafter: “the Prisons Ordinance”) provides that the Commissioner may: “suspend, discharge or dismiss a warden, if it has been proven to the Commissioner’s satisfaction that the warden is negligent or ineffective in the performance of his job, or is, for some other reason, not suitable for his job, and he may suspend a warden who has been indicted of improper behavior or who is being investigated for committing a crime or a disciplinary infraction…” (emphasis added – S.J.). This means that the violation of a warden’s rights caused by his discrimination on the basis of his age, to the extent that the violation relates to the standards applied for determining whether he should be forced to retire, only arises from the gap between the standards applied for justifying the dismissal of a warden at any age, and the standards applied for forcing the retirement of a warden who has reached retirement age (if there is such a gap). (For examples of the exercise of the IPS Commissioner’s authority with respect to workers below retirement age, see HCJ 668/81 Ma’adi v. Minister of the Interior [1983] IsrSC 37(1) 744; HCJ 6208/84 Amara v. IPS Commissioner (2004) (unreported); HCJ 7931/05 Biton v. IPS Commissioner (2005) (unreported)).

32. I find that all of the first six criteria for determining the propriety of extending an IPS worker’s employment are proportionate. In terms of the rational connection test, only the first criterion (an assessment of the warden’s job performance) and the third criterion (medical condition) relate directly to the worker’s fitness, as a matter that is related to his age. In other words, these criteria are used to determine whether the statistical correlation between a worker’s age and the degree to which he has experienced work-related burnout, or the degree to which his physical fitness for the work has declined (to the extent that physical fitness is relevant to the specific job), exists in each case. Moreover, pursuant to s. 82(c)(2) of the Prisons Ordinance cited above, these criteria apply to all IPS workers. The violation that is therefore caused is due only to the fact that the fitness of any worker who has reached retirement age and who wishes to continue working will be examined, but before that age is reached, the worker’s fitness will only be examined if the IPS has initiated a process to dismiss him.

33. The fourth criterion (the need for the particular worker at his particular job, and the possibility of repositioning him) involves a more indirect connection to the worker’s age. At the same time, this criterion reflects the relatively high cost involved in training a worker for a new position, when his work prospects become more limited. For this reason, this criterion also satisfies the rational connection test. Regarding the second criterion (the service history), the fifth criterion (the scope of entitlement to a pension) and the sixth criterion (financial and family situation) – none of these are at all dependent on the worker’s age. Nevertheless, the Procedure indicates that these three criteria are considered specifically for the benefit of the worker. Even a worker who has been exhausted by his work and whose fitness has declined can, under certain circumstances, be allowed to continue to work. In other words, these criteria cushion the harm done to the workers, even when their dismissal is justified given the decline in the quality of their work – if the harm caused as a result of such dismissal will be disproportionately severe.  

34.  Consequently, with respect to an assessment of a worker in accordance with the first, third, and fourth criteria that are listed in the Procedure, I do not see that there is a less restrictive alternative. These criteria are directly related to the worker’s fitness for the job, and they effectively sever the connection between the worker’s continued employment and his age. Additionally, if we apply the narrow test for proportionality, we see that the harm resulting from the fact that the worker’s age is used as a starting point in determining his fitness for continued work, combined with the harm caused by the assumption that there is a statistical correlation between age and a decline in fitness for work – is still less than the benefit obtained from forcing the retirement of workers who are no longer able to work. As noted above, this approach is strengthened by the existence of mechanisms such as the second, fifth and sixth criteria, which serve to limit the damage and ensure the protection of the worker’s interests, even when he is less fit for the job (regarding the importance of an individualized evaluation, see HCJ 7052/03 Adalah – Legal Center for Rights of the Arab Minority in Israel v. Minister of the Interior [2006] IsrSC 61(2) 202, at pp. 316-318).

35.  Regarding the possibility of taking into account general, systemic considerations as well as IPS objectives, I acknowledge that I have doubts as to whether this criterion could be considered proportionate. This criterion does not relate at all to a worker’s age, but rather only to his job. Clearly, there could be a situation in which the IPS might want, because of organizational considerations, to eliminate a position held by a younger worker. If the IPS was obligated to continue to employ younger workers, even if it wished to eliminate their positions because of general, systemic considerations, I would say that this criterion is disproportionate, as there would be no rational connection between it and the harm caused to the warden. Nevertheless, a review of the legislation relating to the service of prison wardens shows that these considerations may be weighed when making a decision regarding the dismissal of a warden, as part of the broad discretion given to the IPS Commissioner to dismiss a worker because he is “for some other reason, not suited to his job.” It is true that this Court has not yet deliberated any cases in which a warden was dismissed only because of IPS general systemic considerations, and it has therefore not established any binding interpretation of the concept of “non-suitability for some other reason.” Nevertheless, I believe that so long as the criterion relating to systemic considerations and IPS objectives is interpreted in accordance with the dismissal criterion relating to efficiency considerations, the use of this criterion cannot in itself be deemed to be age-based discrimination. Moreover, even if more importance is attributed to systemic considerations in the specific context of a forced retirement, it is not disproportionate if the level of importance attributed to these considerations can be considered reasonable. This is because although a person who has been forced to retire is in an unfortunate position, that position is incomparably better than that of a person who has been dismissed. It is therefore appropriate that when the needs of a worker are balanced against the needs of the system, slightly more weight is given to the system’s needs in the context of a forced early retirement. (Later on, in the context of my discussion of the form in which the Procedure was carried out, I will discuss the manner in which this criterion was implemented in the current proceeding.) It should be noted that a review of parallel legislative material shows that a clear procedure was established for other civil servants, relating to dismissals occurring in light of organizational changes (see s. 82.27 of the Civil Service Bylaws). The IPS should establish a clear procedure that will apply to all its workers, with regard to the termination of their employment because of systemic considerations. Clearly, the arrangement must be consistent with the rules that apply to this issue (see, regarding this matter, LabA (NLC)) 133/09 Milcham v. Jedida Machar Local Council (2012) (unreported), in which the court refined the rule so that even in the context of downsizing, dismissals should be carried out while protecting workers’ rights and avoiding discrimination; and see also, regarding age-based discrimination in the context of downsizing dismissals, UC (TA) 3270/07 Cohen v. City of Bat-Yam (2012) (unreported)). In any event, I did not find that, according to the rules that apply to this matter, that taking into account systemic considerations when making a decision to forcibly retire a worker constitutes age-based discrimination, so long as such considerations are weighed in the same manner in which the IPS would weigh them when deciding to dismiss a worker in a non-retirement context (and it still will not constitute such discrimination, even if the system’s needs are given somewhat more consideration in a retirement context than they are given in an ordinary dismissal context). At the very least, such a practice would not fall within the definition of a disproportionate level of harm.

Sections 8(d) and 8(e) of the Order

36.  For the sake of convenience, I will quote here ss. 8(d) and 8(e) of the Order, verbatim:

‘8 (d)   If the Committee recommends to extend employment, it will recommend that the warden’s employment be extended for a period of not more than one year. Towards the end of the period, if the warden wishes an additional extension period, the Committee will consider his matter again and will make its recommendation regarding the further continuation of his employment. Recommendations regarding extensions of employment may only be given for a total period of up to 3 years and/or until the warden has reached the age of 60.

8 (e)     The case of a warden who wishes to extend his employment beyond age 60 will be presented to the Committee for deliberation, and the Committee will consider the degree to which the continuation of his employment in his current position is essential; it will also consider the amount of his expected contribution to the organization should he remain in his position. The Committee will also examine the request in accordance with the standards set out in s. 7a and 7b. The Committee may recommend the continuation of a warden’s employment for periods that do not exceed one year per each request.’

As I explain below, I found that these two sections are not proportionate and that they must be invalidated.

37.  The policy of extending the employment for only one year at a time does not satisfy any of the tests for proportionality. First, there is no rational connection between this policy and the arrangement’s objective. That objective, as stated above, is to determine whether the worker’s fitness for his work has declined as a result of the worker’s burnout and whether there is a need to require his early retirement. The respondent has not claimed, and in any event has not proven, that the burnout rate increases once a worker reaches the age of 57. This means that even if the starting assumption is that there is a statistical correlation between the worker’s age and the quality of his work, from the moment that it has been determined that he is fit to continue at his work, there is no reason to assume that this fitness will significantly decline over a one-year period. Consequently, even if it had been proven that a worker’s burnout begins to accelerate at the age of 57, it would be possible to adopt a less restrictive means, such as allowing the Committee to determine that a particular worker would be re-assessed after a period of time determined by the Committee. For example, if the worker has one more year left to complete the term of his office at his current position, the Committee could determine that his matter would be re-examined after a year. However, if the worker has just begun working at his current position, in which he could potentially serve for a number of years, it would not be reasonable for the Committee to re-examine his fitness for that position once a year. Subsequently, this policy also fails the third test for proportionality. This policy seriously infringes on the right not to be discriminated against on the basis of age. The actual significance is that a worker will, from the time he reaches retirement age, suffer from a permanent state of uncertainty. Such a worker will be unable to make any plans based on an expected income. Even if the respondent had proven that there is some connection between the burnout rate after age 57 and the need to re-examine the continuation of a worker’s employment every year, it is doubtful that this would justify the infliction of this kind of harm on the worker. I therefore believe that this policy of examining a worker’s fitness every year should be rejected, on the grounds that it causes disproportionate harm to the worker’s right to equality.

It should be noted in this context that the fact that the said policy only takes the form of a recommendation, and that the Commissioner can theoretically extend the worker’s employment for longer periods, in contrast with what has been recommended, does not minimize the violation. This is because we can reasonably presume that once only data relating to the coming work year is shown to the Commissioner, it will be difficult for him to reach a decision to extend the employment for a period of more than one year, in the absence of a Committee recommendation to do so.

38. Regarding the establishment of a high threshold for allowing the continued employment of wardens past the age of sixty, I have reviewed the respondent’s position and have not found that it provides even the slightest explanation for a distinction between workers of the ages 57 to 60, on the one hand, and workers who are older than 60, on the other. Moreover, the two additional criteria that apply to workers above the age of 60 are not proportionate, as they are of no relevance to the worker’s capacity for work. In actuality, a review of the section points to a disturbing picture, in which the presumption is that the worker should be forced to retire unless, because of systemic considerations, there is a need for him to continue working. Since this component of the Order does not satisfy neither the rational connection test, the least restrictive means test, nor the proportionality test in its narrow sense – this component is, in my opinion, invalid.

39.  That being the case, I believe that all of the above indicates that there is no need for a sweeping invalidation of the entire Order. Nevertheless, ss. 8(d) and 8(e) of the Order, which are disproportionate, and which constitute an excessive violation of the workers’ rights to equal treatment with respect to their ages, should be struck down.

Implementation of the Arrangement Established in the Order

40.  I do not conclude – from my finding that the Order itself constitutes a proportionate violation of the right to equal treatment and that it need not be invalidated in its entirety – that its implementation is proper. As is known, if it is proven that a suspect classification, such as a distinction based on age, is being used, the burden of proof then shifts to the party that has made the classification, to prove that it is not a wrongful distinction (see HCJ 6778/97 Association for Civil Liberties in Israel v. Minister of the Interior [2004] IsrSC 58(2) 358). In the area of labor law, this procedure regarding the burden of proof is expressly established in s. 9 of the Equal Employment Opportunities Law. Here, we see that suspect classifications can be identified in two ways. The first is by examining the case of a particular worker at hand, asking whether prohibited considerations were weighed in that case. It will often be difficult to make such a determination, since discrimination rarely leaves clear footsteps. The second involves proving a suspect classification through an examination of an entire group of workers. Once a worker has proven that in either of these respects, the employer has made a suspect classification, the burden to prove that it is not discriminatory is imposed on the employer. It is still necessary to balance between the two methods of identifying wrongful discrimination. That is, the clearer the individual worker’s circumstances are, and the more it is demonstrated that there has not been any discrimination in his case, the harder it will be for a worker to ask for a remedy based on a generally discriminatory policy. Consequently, the more that an employer’s general behavior indicates a broader discriminatory policy, the greater the burden will be on that employer to prove that there is no discrimination in the case of a particular worker.

41.  In the case before us, the petitioner has, I believe, succeeded in showing that a suspect classification has been made, based on the two levels of proof. The burden of proof has therefore shifted to the respondent – it is he who must prove that there has been no prohibited discrimination. The respondent has not met this burden.

42. On the collective level, the petitioner argued that the rules established in the Order, and the manner in which the Order is implemented, indicate that a suspect classification has been made on the basis of age. I agree with this contention. First, as explained above, at least some of the rules reflect unlawful discrimination on the basis of age, and it is enough that some part of the normative system that regulates the petitioner’s case is discriminatory for the burden of proof to shift to the respondent. This is especially so in light of the substantial difference between the retirement arrangement established in the Order and the retirement age established in the Retirement Age Law. (The two frameworks establish retirement ages that are ten years apart). As I have noted, the starting point for the discussion was that mandatory retirement at the age of 67 reflects a proportionate violation of the right to equality; therefore, the party wishing to deviate from this arrangement should bear the burden of proving that the proposed deviation is proportionate.

43.  Moreover, as my colleague Justice E. Hayut wrote, outcome-based discrimination can be inferred here, even from the data presented by the respondent. For example, according to the data that he presented, the average retirement age for wardens in 2008 was 57.64, compared to 56.16 in 2004 (before the decision in Rosenbaum was issued). The respondent did not break down the data between workers who retired voluntarily on the basis of age, and those who were forced to retire against their wishes. Nevertheless, on the assumption that this breakdown of the two groups had not changed, it is clear that the impact of the Rosenbaum decision on the average retirement age of these workers was insignificant. This can only be explained by the fact that the manner in which the Order is implemented reflects de facto age-based discrimination. Thus, at least on a collective level, the respondent has not proven satisfactorily that the distinction he made does not constitute wrongful age-based discrimination (and in effect, the data that he provided to the Court actually supports the claim that there has been discrimination). It should be noted in this context that the fact that the respondent can point to only two workers above the age of 60 who are employed by the IPS merely reinforces the suspicion that the policy is tainted by discrimination. It should also be noted that the respondent did not meet the burden of proof on this issue when he stated that 33 out of 55 requests for extended employment were approved in 2008, 12 out of 17 were approved in 2009 and 18 out of 22 were approved in 2010. First, as my colleague Justice Hayut noted, the respondent has not provided any information regarding the breakdown of these requests, and it could be that most of them involved approvals for only short periods past the age of 57. Second, it remains unknown how many requests for extended employment were simply not submitted, due to an open or concealed policy that makes clear to workers that their chances for having their applications approved are low (and it appears that the sharp drop in the number of requests submitted would support the presumption that workers who wanted to stay in their jobs refrained from asking for such extensions, because they had little confidence that their requests would be granted). In other words, it is not sufficient to prove that there was no discrimination in the implementation of the Order with respect to requests that were submitted. Discrimination can also be reflected in the fact that there may have been workers who would have wanted to continue working, but because of various institutional reasons (primarily because of the tone set by the establishment), they did not submit any requests to be allowed to stay.

44.  On an individual level, a review of the petitioner’s case shows that her forced retirement was not based on the criteria set out in the Order. There is no dispute that the petitioner did her job well, and there was therefore no reason to dismiss her on the basis of the first criterion. Accordingly, it was not argued that the quality of her work had declined or that she was physically unfit to do her job. In effect, the main argument made was that her forced retirement was necessary because she held a rank that the respondent sought to phase out. The respondent did not prove that he was also applying a similar policy with respect to other workers whose ranks he also wanted to phase out and who were not yet of retirement age. The significance is that a worker in the same situation as the petitioner, who held a rank that the IPS wished to phase out but who was not of retirement age, would continue to serve in his position. Consequently, we cannot help but conclude that the process of forcing the petitioner to retire was itself tainted by age-based discrimination. It should be noted in this context that even if there was some difficulty in finding an appropriate alternative position for the petitioner, as the respondent noted, this would not have been enough to justify her forced early retirement. As is known, once discriminatory and legitimate considerations are mixed together in the decision-making process, the decision as a whole is tainted by discrimination, and it must be revoked. Moreover, in the current case, the respondent himself notes – time after time – that the difficulty in finding an alternative position for the petitioner was caused by the fact that she held the rank of Flexible Chief Superintendent (see, for example, paras. 148 and 158 of the respondent’s answer). As stated above, the discrimination suffered by the petitioner is connected to that very fact, and the respondent cannot buttress his position by making this argument.

45.   Since the petitioner has proven, as stated, that the IPS was following a general policy that discriminated against older workers, and even more importantly, because she has proven that in her own specific case, she was discriminated against on the basis of her age, her petition should be granted. An order should be given, that she be reinstated in her job or placed in a different position found for her in the IPS.

Conclusion

46.  The phenomenon of age-based discrimination is a very serious one. It humiliates the victim and denies his human dignity. This phenomenon also does serious harm to the economy, which loses good, skilled workers on the basis of nothing more than unfounded stereotypes. Moreover, the harm it does is usually especially severe, because it affects a group of workers who are already in an inferior position and whose members have difficulty defending their rights. While in the forefront of the economy, public institutions and government authorities there are many employees who are older than sixty, there are nevertheless many older workers who find themselves outside of the labor force at their peak – only because of their age. This policy is often practiced openly, in which case it is easy for a court to identify it and to strike it down. However, it is an open secret that in many institutions that have no openly discriminatory directives regarding this matter, discrimination of this type is nevertheless practiced, without leaving obvious traces. When these proceedings come before this Court, we do our best to eliminate the discrimination and to defend the dignity of those whose only crime is that they have reached a certain age. At the same time, this phenomenon must be eliminated by all public and private parties, who must all stop engaging in this practice. A fortiori, the various government authorities must do all they can to root out the phenomenon from within their own sectors.

47.  On the basis of all that has been stated above, I choose to concur in the result reached by my colleague Justice E. Hayut with respect to the petitioner’s particular case, and to have her reinstated within the ranks of the Israel Prison Service. Regarding the Order itself, my opinion is that we should only strike down ss. 8(d) and 8(e). Clearly, the other sections of the Order will be interpreted on the basis of the rule established by this Court and by the Labor Courts, and which was described to some extent in my judgment here.

 

 

Vice President (emeritus) E. Rivlin

I concur in the judgment of my colleague Justice E. Hayut, as I also believe that the order nisi should be made absolute, and that the respondent should be ordered to revoke his decision to order the petitioner to retire. I believe that the respondent’s decision to order the petitioner’s retirement at the age of 57 and a half, only half a year after she reached the minimum retirement age, does not comply with the rules of administrative law and must be struck down. Therefore, and because I am not certain that the Order which is the subject of this petition – the Extension of Service Order – is invalid, I do not wish to discuss the issue of that Order’s invalidity as part of this petition. I nevertheless wish to describe my position, in principle, regarding the issue of age-based discrimination.

The Respondent’s Exercise of Discretion in the Petitioner’s Case – the Concrete Aspect

1. The respondent’s legal authority to order workers to retire relates to the period between the time they reach age 57 (s. 81 of the Retirement Law) and the time they reach the mandatory retirement age – 67. The respondent decided to allow the petitioner to work for only one twentieth (six months) of this long period in which the petitioner could have legally continued to work in the IPS, and to order her to retire at age 57 and a half. I believe that in reaching this decision, the respondent exercised his discretion in an improper manner.

As the decisions rendered by this Court in Recanat and Rosenbaum indicate, it is undisputed that the fact that the petitioner reached the age at which the respondent was permitted to force her to retire cannot be the sole reason that the respondent had for actually forcing her retirement. If the petitioner’s age was the reason for her being forced to retire, and in the absence of any indication that she was having difficulty doing her work as an attorney – then this was age-based discrimination. Age-based discrimination, meaning a preference for the employment of a younger worker over the employment of an older worker, is absolutely unacceptable and must be uprooted and removed from the labor market. However, the reason that the respondent gave for having compelled the petitioner to retire was that it was the result of budgetary considerations. The budgetary issue arose because for 15 years, the petitioner had been entitled to the salary of a Chief Superintendent, even though she was employed in a position intended for a person holding only the rank of Superintendent. Thus, this was not a matter of preferring younger workers over older ones. It was instead a matter of preferring a worker whose salary was consistent with his job description over one who – for historical reasons – was entitled to a excessive salary for a long time. The petitioner, on her part, argued that this factor was not the true reason for her retirement and that it was being used to conceal the respondent’s wish not to employ an older worker and to prefer younger workers to her. The difficulty is that the petitioner’s argument is completely unsupported, while the respondent’s argument is supported by documents that attest to his consist efforts to terminate the employment of all workers whose ranks were inconsistent with the nature of their work. Under such circumstances, we cannot presume that the respondent is simply presenting an excuse for discriminating against the petitioner; it would be more appropriate to presume that the respondent was seeking to allocate public funds more efficiently, in conformity with his position and his authority. Regarding the petitioner’s specific situation, the disparity between her position and her salary was particularly sharp, as she had received a special approval for earning a Chief Superintendent’s salary during the period she was an articling law clerk, instead of a typical clerk’s salary. She also had special approval for earning a Chief Superintendent’s salary between the time when she completed her clerkship until she was admitted to the bar. We must therefore presume that the budgetary issue was the respondent’s primary concern, and examine the manner in which he weighed this factor against the other factors that needed to be considered in this matter.

2.  There were other significant factors that needed to be considered in this case, factors which justified the petitioner’s continued employment: the relatively low level of pension benefits that she had accumulated, her family and financial situation, and the satisfaction that her superiors had expressed regarding her work. The respondent should also have taken into account the fact that in recent years the petitioner had been employed in an administrative position, for which the typical level of burnout is relatively low, compared to that of a warden who comes into daily contact with prisoners. Indeed, these considerations led the internal committee of the Israel Prison Service to recommend that the petitioner’s employment be extended for an additional year. As may be recalled, in accordance with the Extension of Service Order (s. 8.d), this is the maximum extension that the committee may recommend each time it receives an application, and it was certainly possible that the committee would have continued to recommend extensions in future years.

In light of all this, and without taking lightly the budgetary reasons that the respondent did consider – reasons that it was his job and his obligation to consider – I believe that under the circumstances of the case, the decision to extend the petitioner’s employment for such a short period of time was not proportionate. The respondent’s exclusive authority to determine the date at which a worker will retire imposes on the respondent a duty to balance the system’s needs against the individual worker’s needs. In this case, the proper balance was not reached. The petitioner’s personal and financial circumstances, as expressed in the recommendations of the IPS welfare department, and of which the respondent was made aware, were exceptional circumstances. The fact that the petitioner had earned very little pension benefits and the fact that her superiors were satisfied with her work performance should have tipped the scale in her favor. Even though, as stated, the legislature had authorized the respondent to order workers to retire from the time they had reached age 57, it is clear that the balancing carried out by the respondent here was skewed, and his decision is therefore invalid.

The Extension of Service Order and Age-based Discrimination – the Matter of Principle

3.    As I have concluded that the respondent’s decision concerning the petitioner’s case is invalid, and that she should be granted the relief requested in the petition – i.e., overturning the respondent’s decision in the petitioner’s case – there is no need for me to examine the validity of the Extension of Service Order; nevertheless, because this matter was discussed in my colleagues’ opinions, I will discuss it briefly below.

The petitioner’s main argument against the Extension of Service Order is that it leads to the practice of age-based discrimination. The main support given for this argument is that the default option established by the respondent is that a worker must periodically ask to have his or her employment extended, from the time he reaches the minimal age  for mandatory retirement. This contrasts with the procedure established in the Civil Service Bylaws, the starting point of which is that a worker will continue to work until age 67, unless the worker’s employer asks the Civil Service Commissioner to order the worker’s retirement. But if this is the case, then the argument being made is not of age-based discrimination. An age-based discrimination claim weighs the treatment of a young worker, on the one hand, against the treatment of an older worker, on the other hand, whereas a claim of discrimination in terms of the treatment of IPS workers as compared to other civil servants is, at most, a claim of discrimination based on association with the IPS. Regarding this last matter, it is doubtful that it can be argued that IPS workers are discriminated against, as a group, compared to other civil servants. Even if we isolate the retirement arrangements, and make no comparison between the overall terms employment for IPS workers and those of civil servants – we would still see that the voluntary retirement age for police officers and wardens is five years younger than the voluntary retirement age for civil servants (compare: ss. 17 and 72A of the Retirement Law and Part B and Part C of the Second Schedule to that Law). Furthermore, those who retire from the IPS and from the Israel Police enjoy a special arrangement that increases the size of their pensions by up to 8% by virtue of a government resolution (Notice of Government Resolution Regarding Retirement Policy for the Israel Police and the IPS, Official Gazette 4936, at pp. 465-466 (2000); Israel Prison Commissioner Order 02.26.00, “Extended Period of Service for the Purpose of Calculating a Pension”). It should be noted that these arrangements also apply to administrative workers within the IPS and the Israel Police.

4.    It is therefore difficult to view the group of IPS workers or even just the group of administrative workers within the IPS, as a group that is being discriminated against because of its belonging to that organization. It would be just as reasonable to believe that civil servants actually face discrimination compared to IPS personnel, in that their voluntary retirement age and the size of their pensions are lower. A review of the Retirement Law indicates that the legislature, whose exercise of judgment in this matter is not challenged in this petition, chose to create different arrangements for different groups of civil servants. The first three chapters of the Retirement Law deal with all civil servants; the statute later moves on to special provisions covering General Security Service workers (Chapter C-1), Israel Lands Authority workers, (Chapter C-2), kindergarten teachers and teachers (Chapter D) and police officers and IPS workers (Chapter E). The statute establishes different retirement arrangements for each of these groups of workers, and naturally, some of these give extra benefits to the relevant group and some provide lesser benefits. The purpose of the special arrangements for the Israel Police and the IPS is to conform the retirement arrangements to the special nature of the work performed by the IPS and by the Israel Police:

 ‘Their functions are complex, and they are often exceptional in nature and in the demands that they make of those serving in their ranks. They are likely to require greater physical fitness, maximum alertness, long and irregular work hours, and the ability to withstand pressure and tension. Moreover, many of those who serve in the Israel Prison Service and the Police — and this includes persons in administrative positions or jobs requiring a special professional expertise (such as doctors or engineers) — are sometimes required to exercise their enforcement powers or to provide reinforcement for operational forces’ (Rosenbaum, per President Barak, at para. 13).

5.    In other words, given the fact that any group arrangement can reflect only a weighting of the abilities of all of the organization’s workers, the legislature reasoned that the average set of demands that are placed on all the different types of IPS workers are greater than those placed on civil servants. Indeed, a group arrangement that takes into consideration the average worker will necessarily present advantages and disadvantages for the individual worker. Sometimes the “non-average” worker will benefit from advantages that were designed for the average worker and to which the particular non-average worker would not naturally be entitled, and that same worker will sometimes suffer from being denied a particular benefit to which he should have been entitled. This anomaly is a consequence of the legislature’s decision to establish rules that serve to encompass all IPS and Israel Police workers, without making any sub-distinctions among these workers. However, as it is the respondent’s judgment that is being examined here and not the Retirement Law, we must refer to the distinction between all IPS workers and all civil servants as a given.

6.    Moreover, not only is it inappropriate to compare IPS workers as a group with all civil servants as a group, it is also not essential that there be any overlap between the manner in which their superiors – the IPS Commissioner and the Civil Service Commissioner – exercise their judgment. The legislature granted the Civil Service Commissioner, the Police Commissioner and the IPS Commissioner the authority to render decisions about the forced retirement of those under their supervision. These three officials established internal guidelines that define the manner in which they intend to exercise their judgment, and there are differences between these sets of guidelines. The petitioner asks us to consider the rules established by the respondent as discriminatory in that the internal rules that he established create a disadvantage for those who do not wish to be forced to retire, as compared to the guidelines established by the Civil Service Commissioner. But the legislature did not determine any normative hierarchy between the Civil Service Commissioner’s guidelines and those relating to the respondent. Once the legislature granted the respondent the power to determine the retirement age for wardens, the respondent’s duty was to exercise his own independent judgment. There is no reason to assume that he should be obligated to establish arrangements that are similar in nature to those established by the Civil Service Commissioner in the Civil Service by-laws.

7.    I would note parenthetically that in the leading case on this issue –Rosenbaum – the respondent’s decisions were also invalidated on the ground that they did not comply with the reasonableness and proportionality rules. As may be recalled, in Rosenbaum, the Court discussed the decisions made by the respondent and the Police Commissioner to use their authority to force retirement at the earliest possible age, without exercising any judgment in specific cases. This arrangement, it was held in that case, was disproportionate and unreasonable since “[s]ufficient and convincing evidence was not presented to show why the Procrustean measure of a uniform retirement age, which is ten years lower than the customary age in the rest of the civil service, constitutes the least harmful measure to human rights when realizing the goals of the prison service and the police.” (Rosenbaum, at para. 19). The key flaw in the respondents’ policy in that case was the arbitrariness and the failure to exercise judgment inherent in the establishment of a uniform and sweeping rule. The rules established by the IPS and the Israel Police prior to the Rosenbaum decision deviated not only from the way in which the parallel administrative authority – the Civil Service Commission – had exercised its judgment, but also from the statutory determination regarding the maximum retirement age. In effect, these rules created an alternative maximum retirement age and presumed that any worker older than such age was not suitable for continued employment in the IPS or in the Israel Police. This was age-based discrimination – it was discrimination against older workers who were forced to retire, without any investigation of their fitness for the work, while younger workers were able to continue their work. Such discrimination is prohibited and it is improper. It is unnecessary, in order to reach this conclusion, to examine the parallel arrangements used in the civil service – the conclusion can be reached by viewing the differential treatment of younger and older workers within the IPS itself.

In this context, we need to look at the comparison the Court made in Rosenbaum – between police officers and IPS workers on the one hand and all civil servants on the other – with regard to the maximum retirement age, an age which is established in s. 4 of the Retirement Age Law, 5764-2004. I do not believe that we need to infer, from this comparison, that the different treatment of workers in different organizations, with respect to age, is an example of age-based discrimination. As stated, differential treatment to workers that are distinguished only by their belonging to different organizations, may give rise only to discrimination based on the identity of their employer organization– and not to any other type of discrimination.

Furthermore, I do not believe that the Extension of Service Order should be interpreted as imposing on the worker the burden to prove that there is good reason to extend his employment. The Order only imposes on the worker the obligation to ask for the extension of his employment, but does not impose any burden of proof whatsoever. The procedural directive, which requires that the worker must ask for an extension of his employment, should be distinguished from the considerations to be weighed in reaching the decision to extend that employment – considerations that are specified in s. 7 of that Order, and which are ostensibly examined without any bias in either direction. 

8.    As stated, the subject of our examination here is the manner in which the respondent has exercised his judgment. This exercise of judgment is required to be reasonable, proportionate and non-discriminatory – in accordance with the rules of administrative law. As I noted at the beginning of my opinion, in this case, such an examination must lead to revoking the respondent’s decision. It may be that because of the petitioner’s specific circumstances we can infer that the procedure established by the respondent for examining the continuation of employment is often an obstacle. The need for a renewed examination of the extension each year can create the impression that an extension for only half a year strikes an appropriate balance between the conflicting considerations. However, as noted above, the balancing carried out in the case of the petitioner’s application was in any event far from proportionate. I stress that this is the case with respect to the petitioner’s exceptional case, in which there was a substantial budgetary reason for requiring her early retirement. In the absence of an exceptionally strong reason like this, this kind of balancing is even more obviously improper. I believe that there is no need for this Court to intervene in the respondent’s authority to establish internal procedures, and it is sufficient for the Court to make certain that the respondent’s decisions comply with the rules of administrative law. Examining the Extension of Service Order from the perspective of the treatment of younger IPS workers versus older IPS workers (without making any reference to irrelevant comparisons to other civil servants) demonstrates that the policy is not discriminatory; in fact, the Order itself does not establish any substantive policy whatsoever. All that it determines is the procedural mechanism that assists the respondent in deciding when to exercise the power given to him in s. 81 of the Retirement Law. It is presumed that the respondent will internalize the provisions of this judgment and will determine – based on his experience and judgment – the best way to implement its conclusions, with regard to the future conduct of the Israel Prison Service.

I therefore join in the ultimate outcome of my colleagues’ decision – that the petition should be granted, that the order nisi that we have issued should be made absolute, and that the respondent’s decision to order the petitioner’s retirement should be reversed. In my view, there is no need for further relief in the context of this petition.

 

 

Justice N. Hendel

1.    I concur with the comprehensive and well-presented opinion of my colleague E. Hayut. I believe this case may be significant for future cases and I have therefore decided to emphasize certain aspects of it.

Leah Zozal was forced to retire at 57 years and two months, without any substantive justification considering the nature of her job. My colleague held that the retirement arrangement discriminated against Zozal on the basis of her age. Among the grounds for a discrimination claim that are listed in s. 2(a) of the Equal Employment Opportunities Law, 5748-1988 (see Recanat, per Justice Cheshin, at p. 308), age discrimination is apparently something of a step-child, in two respects. First, even though it is the “oldest” of the grounds – since in actuality the cases deal with discrimination against an older worker and not the other way around – the issue of age is also among the youngest, in the sense that as an issue it does not have much seniority within Israeli Law. (See s. 2(a) of the Equal Employment Opportunities Law (Amendment 3) 5755-1995). Second, the junction between the prohibition of discrimination on the basis of age on the spectrum of causes for discrimination, and the phenomenon of workplace layoffs on the spectrum of those subject to discrimination, reveals an inherent irony in Israeli Law. On the one hand, age-based discrimination with respect to dismissals is prohibited. At the same time, the law imposes mandatory retirement at a particular age.

2. Other legal systems have dealt with this ironic conflict in various ways. In the United States, for example, the law has come to eliminate mandatory retirement ages. (Congress has banished age-based mandatory retirement in 1986 through an amendment of the Age Discrimination in Employment Act of 1967, 29 U.S.C. 621-634, except in unusual cases that are defined in the statute, such as the retirement of airline pilots. See also: Kenneth R. Davis, Age Discrimination and Disparate Impact: A New Look at an Age-Old Problem, 70 Brook. L. Rev. 361 (2004-2005).

In England, the Employment Equality (Age) Regulations (2I 2006/1031) (2006) were enacted in 2006. According to Regulation 30, an employer had the freedom to establish a mandatory retirement age of 65. This provision was repealed in 2011 with the enactment of the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 (SI 2011/1069). In a judgment handed down in 2012, the Supreme Court held that an employer could create a mandatory retirement age but would have to prove that it had used “proportionate means to achieve a legitimate aim” (Seldon v. Clarkson Wright and Jakes (A Partnership) [2012] UKSC 16). The Supreme Court clarified that the aim of any differential treatment based on age must be to promote a social policy in which there is a public interest, and that in determining whether or not a public interest was involved, the Court should take note of the following considerations: promoting the access of young people to employment; efficient planning of the recruitment of workers which will insure the integration of various generations within the workforce, in order to encourage the transmission of experience and the exchange of new ideas; the softening of the blow to older workers when it is hard for them to find a new job if they are dismissed; compensation for experience; and helping older workers take part in the labor force. It should be noted that two of the key purposes are inter-generational justice and dignity.

Twenty years ago, a Canadian court examined the constitutionality of provincial laws that established a mandatory retirement age, in view of the Canadian limitations clause in s. 1 of the Canadian Bill of Rights and Liberties, and s. 15(1) of the Bill, which deals with age-based discrimination. However, in recent years, the trend in Canadian law – both provincial and federal – has been to eliminate the concept of mandatory retirement at a particular age, except in cases that are enshrined in specific pension agreements or in which retirement is necessary because of job requirements (see, Professor Ruth Ben-Israel, “Retirement Age and Equality: Biological or Functional Retirement?”, 43(3) Hapraklit 251 (5755-1995), at p. 285; New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc. [2008] 2 S.C.R. 604). In contrast, in France and in Japan, there is a mandatory retirement age; ten years ago, that age was 60, but it has been rising since then (Andrew Wood, Marisa Robertson & Dominika Wintersgill, “A Comparative Review of international Approaches to Mandatory Retirement”, 674 Department for Work and Pensions Research Report (2010)). We thus have several different legal systems with uneven regimes and developments.

It is interesting to look at an illuminating example from Jewish law, which is relevant to our case. The Torah states the following: “[b]ut at the age of fifty they shall retire from the work force and shall serve no more. They may assist their brother Levites at the Tent of Meeting” (Numbers, Chapter 8, 25-26). Is this an example of a mandatory retirement age? Does a Levite who has reached the age of 50 stop working, or does he continue to work with his fellow Levites in the Tabernacle? The Sifrei commentary takes careful note of the text and writes as follows: “‘But at the age of fifty they shall retire from the work force’; does this mean that he does not work at all? The explanation is: ‘and [they] shall serve no more. They may assist their brother Levites at the Tent of Meeting.’ This shows that he returns to the task of locking the doors and to the work performed by the sons of Gershom” (one of Levi’s sons). According to this approach, the Levite stops doing one particular kind of work at age 50, but is given another job which is also part of the work of the Levite tribes – for example, locking the doors. The Zohar explains that the job of the Levites is to sing, but at age fifty, a man’s voice “has weakened and is not as pleasant to hear as his friends’ voices are” (free translation [from the Aramaic]; Zohar Vol. 1 (Genesis, Parshat Vayechi). According to another Midrashic commentary, Sifrei Zuta (Chapter 8), the Levite’s work also included heavy lifting – which is inappropriate for a Levite over fifty, because of his age. We see that the approach here is that there is room to dismiss a worker due to his age because of a relevant change that relates to the nature of the job – voice or heavy lifting. In contrast, there is no justification for an age-based dismissal if the worker (the Levite) can continue his work, based on his skills and abilities – in the Tabernacle. As explained below, given the nature of the petitioner’s job – an attorney’s position – there is no justification for an age-based dismissal.

On a general level, it may be recalled that a finding of age-based discrimination, like any discrimination, rests on its own unique characteristics. For example, the issue of age, as opposed to other issues of discrimination, is a developmental matter, which may be relevant to each of us when the time comes, hopefully if not in practice. However, the establishment of an age at which a worker retires, after many years of investment in his labor, is designated to benefit the worker and give him social security, so that he is not forced to work for his entire life (see: Todd D. Nelson, Ageism: Stereotyping and Prejudice Against Older Persons, x, 174 (2004)).

3.    As to our approach here in Israel, the law recognizes the establishment of a mandatory retirement age for workers (Retirement Age Law, 5764-2004). The relevance of the characteristics of age as cause for discrimination noted above is expressed in the sensitivity required for examining an age-based discrimination claim. The statutes and the case law have referred to this issue in four ways, all of which become more significant in this case in light of the opinion of my colleague, Vice President (emeritus) E. Rivlin. First, even when a mandatory retirement age has been established, it must be ascertained that the determination does not discriminate against a particular worker compared to others, based on his age. The prohibition against age-based discrimination, in s. 2(a) of the Equal Employment Opportunities Law, is a normative provision which is aimed at directing behavior. The law does not prohibit any kind of differential treatment. Rather, it only prohibits differential treatment that is based on an identifying characteristic which the employer is barred from considering. The meaning of the concept of discrimination that is “based on” a particular issue was discussed in a recent decision by President (emeritus) D. Beinisch (HCJ 1758/11 Orit Green v. Home Center (2012) (unreported)). In that decision, President Beinisch held that even in the absence of an intention to discriminate against the worker, the employer will have engaged in age-based discrimination if one of the factors that the employer considered when making a decision is one of the prohibited factors listed in s. 2(a) (ibid., at para. 16). In this case, it is clear that the workers’ age was considered by the IPS Commissioner in establishing his mandatory retirement procedures. When it comes to age-based discrimination, we cannot include a condition that the discrimination must be in favor of a younger worker and against an older worker; it is sufficient that a worker, of any age, is discriminated against in relation to identical employees, because of his age (see also Recanat, per Justice Zamir, at p. 346).

Second, the presence or absence of discrimination, in the sense that it means different treatment for parties who are equals, requires an answer to the question: “different from whom?” The definition of the peer group – which is the basis for the comparison made by the worker who claims he has been the subject of a discriminatory measure – is an important stage in the analysis of whether or not discrimination has been practiced. According to my colleague Justice E. Rivlin, the relevant peer group consists of all IPS workers, and the different treatment given to older IPS workers as compared to younger IPS workers constitutes unlawful discrimination. This dispute already arose in Rosenbaum, and this Court decided there that the “the relevant equality group in our case is civil servants as a whole” (Rosenbaum, at p. 872). In this sense, that holding is correct with regard to the instant case as well. In establishing the prohibition against age-based discrimination, the legislature directed the employer and the courts – with respect to their exercise of judicial review –to examine the workers’ conditions based on the various causes for discrimination, such as age and gender. In other words, the employer does not satisfy its legal obligation merely by distinguishing between different groups of workers. In examining the peer group, the prohibition against discrimination established in the statute forces us to look beyond the prohibited types of discrimination. The examination is a legal-normative one, not just organizational. The relevant “groups” for comparison are defined according to the types of discrimination claims listed in the statute. This point is demonstrated in particular when the employer of the two employee groups discussed by my colleague – IPS workers and the civil servants – is, in fact, a single employer: the State of Israel. The relevant peer group is determined based on the nature of the work and not necessarily based on the workers’ institutional affiliation. My approach, as has already been well stated in the opinion of my colleague Justice E. Hayut, is that the petitioner in this case should be compared to other workers holding professional, administrative and staff positions in the civil service, rather than to the IPS wardens.

Third, we need to look at whether the differential treatment is indeed discriminatory or whether there is in fact a relevant and justified difference between the groups, as indicated in s. 2(c) of the Equal Employment Opportunities Law: “Differential treatment necessitated by the character or nature of the job or position shall not be regarded as discrimination.” At this stage, what is examined is the differences between the nature of the work of administrative employees in the IPS, on the one hand, and the nature of the work done by the same type of employee in the civil service, on the other. The question to be answered is whether those differences justify differential treatment with regard to the matter of forced retirement (and see the implementation of the section regarding the requirement made of El Al flight attendants for proper appearance in HCJFH 4191/97 Recanat II, at p. 354). Here, I did not find any relevant difference derived from the nature of the petitioner’s job which can remove the stain of discrimination.

Fourth, the standard for determining whether there has been discrimination is not just the age of retirement but also the “procedures” established for retirement. The mechanism used for reaching retirement decisions is material to the issue of discrimination. I therefore agree with the holding in the opinion of my colleague Justice E. Hayut – that there is an independent defect in the arrangement which is the subject of this deliberation. This defect is that the starting assumption for an IPS worker is mandatory retirement at the age of 57, regardless of the type of job held by the worker, unless he applies for an extension of his employment, which must be granted by the IPS Commissioner. Such an extension is also limited to a maximum period of three years. This is in contrast to the retirement arrangement for civil servants, for whom the starting assumption is that they will be employed until the general retirement age of 67, unless the Civil Service Commissioner orders that the worker retires upon reaching the age of 60 (s. 18 of the Retirement Law [Integrated Version] 5730-1970). That is, even in comparison to the group of IPS workers only – according to my colleague – I do not understand why workers who have reached the age of 57, specifically, must ask for an extension of their employment, when this arrangement is not necessitated by the nature of the job or position. The statute grants discretion for the IPS Commissioner to exercise, including by deciding not to extend an IPS worker’s employment. An additional distinction that has been noted is that an IPS worker’s employment can be extended only until he turns 60. This makes the petitioner’s situation different from that of a civil servant of the same age, who also holds an administrative position.

The different retirement arrangements reflect the difference between the opt-in approach and the opt-out approach, which are used in – inter alia – marketing, privacy matters, and class action lawsuits. The difference between the two methods centers on the question of whether an individual needs to act passively or actively in order to establish his belonging to the group or to preserve his rights. The IPS retirement arrangement places an unjustified burden on the worker, requiring him to proactively apply for employment extension each year from the time he turns 57, as opposed to civil servants whose employment is extended without any need for action on their part, unless it is the Civil Service Commissioner who takes action to initiate retirement proceedings. The arrangement tips the scales – excessively – against IPS workers as opposed to civil servants holding equivalent positions, even though the employer retains the right to decide to extend the worker’s employment for a limited period (compare Leiba v. Police Commissioner, at para. 8). The IPS retirement arrangement delivers a particular message and embodies a particular tone and significance. These point to its discriminatory nature – i.e., to the fact that it treats workers differently, without justification, on the basis of their age.

In this case, a comparison between the retirement arrangement in place for the petitioner and for other workers in the IPS, on the one hand, and the retirement arrangement for the relevant peer group among other civil servants, on the other, is sufficient to show that there has been discrimination against the petitioner. To this, we must add the retirement age established for the petitioner – 57 – as compared to the standard retirement age in the economy. The said age, given the nature of the petitioner’s job, appears to be arbitrary, or to have been chosen – together with the mechanism used for extending workers’ employment – only to satisfy the legal requirements outlined in Rosenbaum. This is not to presume that the IPS acted in bad faith in establishing its retirement arrangement. The presence or absence of discrimination is not measured by the subjective intention of the employer, but rather by the objective outcome for the worker (compare the Canadian court’s decision in New Brunswick, supra). A worker should not have to feel that he is being granted a favor, where the law is actually on his side.

 

Justice Y. Danziger

I agree with the judgment of my colleague Justice E. Hayut.

As my colleague noted in para. 20 of her opinion, the retirement arrangement under discussion here is substantially different from the arrangement that was struck down in Rosenbaum. Unlike the arrangement at issue in Rosenbaum, the arrangement invalidated in the present case includes practical standards and tests for an individual examination to be performed with respect to each warden when he or she reaches age 57. This is a significant step in the right direction. At the same time, I accept in full my colleague’s position that this is not enough, and that there is still a substantial and unreasonable disparity between the retirement arrangement for IPS personnel and the arrangement for all civil servants. There are three factors that have led me to this conclusion. First, I have considerable difficulty with the arrangement’s starting assumption – i.e., that a worker automatically falls within the “worker of a retirement age” category when he turns 57 (ten years earlier than the retirement age for the civil service), and that from that time onward the worker bears the burden of proving that he is qualified to continue working. This is in contrast to the arrangement that applies to other civil servants, where the starting assumption is the reverse. I do not believe that this is a symbolic or minimal difference. Second, the mechanism through which the employment is extended, as set out in the arrangement (and which allows for a limited extension for a period of only one year at a time, for a maximum period of three years, or until the worker reaches the age of 60) is unreasonable (see para. 21 of my colleague’s opinion, and paras. 37-38 of my colleague Justice S. Joubran’s opinion). Third, the arrangement does not distinguish between IPS workers who hold operational positions and those who hold professional-administrative positions. The strength of the respondent’s arguments – that IPS workers generally experience work-related burnout more quickly – is thus greatly weakened.

Consequently, I believe that the arrangement as a whole cannot remain in place and that it must be invalidated in its entirety.

My colleague Justice S. Joubran provided an in-depth analysis of the various mechanisms and tests included in the arrangement, and concluded that it should not be completely invalidated; that instead, only a few provisions need to be struck down – provisions which he believes are insufficiently proportionate (see paras. 29-39 of his opinion). My colleague also believes that the arrangement’s starting assumption (that the worker automatically becomes “a worker of retirement age” at the age of 57) is symbolic and of minimal importance.

I reviewed my colleague’s opinion carefully, but at the end of the day, I remain of the opinion that it would not be right to merely “correct” the arrangement, and that it is impossible to distinguish between its provisions so as to invalidate only some of them.

As stated, I believe that an examination of the arrangement in its entirety leads to the conclusion that it is unreasonable and cannot be divided into its various parts, as my colleague Justice E. Hayut has shown.

 

 

Decided as per the opinion of Justice E. Hayut.

 

Given this day, 9 Elul 5772 (27 August, 2012).

Association of Engineers and Architects in Israel v. Minister of Labor

Case/docket number: 
HCJ 265/68
Date Decided: 
Thursday, January 30, 1969
Decision Type: 
Original
Abstract: 

The Engineers and Architects Law, 1958, established a procedure for the registration of engineers and architects. It also provided that the Minister of Labour may frame regulations, after consulting with the Council of Engineering and Architecture, reserving certain activities to registered engineers and architects, which would have the effect of forbidding others with less training and experience from engaging in such activities. The Minister published such regulations, after due consultation, but postponed the date of their implementation several times. The Petitioners complain that such delay of the implementation of the regulations is unlawful.

               

The court issued an order nisi, directing the Minister to show cause why the court should not order him to confer upon each of the individual Petitioners the licenses respectively requested by them to practice as a registered engineer or architect, and further to show cause why it should not declare that the regulations took effect on a certain date, or in the alternative, why it should not order the Minister to annul the amendment to the regulations promulgated by him by which the effective date of the regulations was postponed, or in the alternative, why it should not order the Minister to implement the regulations immediately. The Minister appeared in opposition to the order nisi. .

               

The court ordered that the rule nisi be made absolute, holding:

               

1.            The word "may" when used by the legislature, prima facie vests a power or discretion, yet sometimes, coupled with the power, there is a duty to act in accordance with the power.

 

2.            Registration under this Law is merely preliminary to the receipt of a license to practice engineering or architecture, and the legislature has directed that a license not be issued on the basis of registration alone but also of practical experience. The licensing of engineers and architects makes no sense unless accompanied by regulations that specify the professional work which may be done only by those so licensed. The Minister is obliged to complete the work of the primary legislation by framing regulations which reserve certain operations to engineers and architects.

 

3.            Pursuant to section 12 of the Law, the making of regulations for reserving operations is conditioned upon prior consultation by the Minister with the Council of Engineering and Architecture. Subordinate legislation promulgated without such consultation, when required by law, is void. Section 16 of the Interpretation Ordinance provides that a power granted by law may be exercised repeatedly, upon the same conditions. In this case, the last of the series of amendments to the regulations issued by the Minister, postponing their date of implementation, was promulgated without consultation with the Council. This amendment, which purports to postpone the effective date of their regulations, is therefore void, and the regulations took effect.

 

4.            When delay in the coming into force of an arrangement prescribed by the legislature becomes an instrument for preventing that arrangement from being implemented, the Minister is bound to act pursuant to the Law and to take the necessary steps to effect its implementation.

Voting Justices: 
Primary Author
majority opinion
majority opinion
majority opinion
Full text of the opinion: 

            HCJ 265/68

 

ASSOCIATION OF ENGINEERS AND ARCHITECTS IN ISRAEL

 AND EIGHT OTHERS

v.

MINISTER OF LABOUR

 

 

The Supreme Court sitting as the High Court of Justice

 

Before Sussman J., Manny J. and Kister J.

 

 

Editor's synopsis -

                The Engineers and Architects Law, 1958, established a procedure for the registration of engineers and architects. It also provided that the Minister of Labour may frame regulations, after consulting with the Council of Engineering and Architecture, reserving certain activities to registered engineers and architects, which would have the effect of forbidding others with less training and experience from engaging in such activities. The Minister published such regulations, after due consultation, but postponed the date of their implementation several times. The Petitioners complain that such delay of the implementation of the regulations is unlawful.

           

                The court issued an order nisi, directing the Minister to show cause why the court should not order him to confer upon each of the individual Petitioners the licenses respectively requested by them to practice as a registered engineer or architect, and further to show cause why it should not declare that the regulations took effect on a certain date, or in the alternative, why it should not order the Minister to annul the amendment to the regulations promulgated by him by which the effective date of the regulations was postponed, or in the alternative, why it should not order the Minister to implement the regulations immediately. The Minister appeared in opposition to the order nisi. .

               

                The court ordered that the rule nisi be made absolute, holding:

           

1.      The word "may" when used by the legislature, prima facie vests a power or discretion, yet sometimes, coupled with the power, there is a duty to act in accordance with the power.

 

2.      Registration under this Law is merely preliminary to the receipt of a license to practice engineering or architecture, and the legislature has directed that a license not be issued on the basis of registration alone but also of practical experience. The licensing of engineers and architects makes no sense unless accompanied by regulations that specify the professional work which may be done only by those so licensed. The Minister is obliged to complete the work of the primary legislation by framing regulations which reserve certain operations to engineers and architects.

 

3.      Pursuant to section 12 of the Law, the making of regulations for reserving operations is conditioned upon prior consultation by the Minister with the Council of Engineering and Architecture. Subordinate legislation promulgated without such consultation, when required by law, is void. Section 16 of the Interpretation Ordinance provides that a power granted by law may be exercised repeatedly, upon the same conditions. In this case, the last of the series of amendments to the regulations issued by the Minister, postponing their date of implementation, was promulgated without consultation with the Council. This amendment, which purports to postpone the effective date of their regulations, is therefore void, and the regulations took effect.

 

4.      When delay in the coming into force of an arrangement prescribed by the legislature becomes an instrument for preventing that arrangement from being implemented, the Minister is bound to act pursuant to the Law and to take the necessary steps to effect its implementation.

 

Israel cases referred to:

[1]     H.C. 384/66, Josef Fuchsman v. Supervisor of Transportation (1967) 21 P.D.(2)221.

           

English cases referred to:

[2]     Julius v. Lord Bishop of Oxford (1980) A. C. 214; 42 L. T. 546; 49 L.J. Q.B. 577 (H.L.).

[3]     Rollo and Another v. Minister of Town and Country Planning (1948), 1 All E.R.13; 64 T.L.R. 25; (1948) L.J.R. 817.

           

A. Ben-Porat for the Petitioners.

Y. Barsela, Deputy State Attorney, for Respondent.

 

 

JUDGMENT

 

            SUSSMAN J.: In 1958 the Engineers and Architects Law, 1958, was enacted. Section 2 of the Law provides that no person shall bear the title "Registered Engineer" or "Registered Architect" unless he is registered in the Register of Engineers and Architects pursuant to section 8 of the Law. The qualifications to be complied with for registration are fixed in section 9 of the Law. The duty to register prevents a person who is not registered from carrying the title of Registered Engineer or Architect; section 2 does not prevent a person who is not registered from doing engineering or architectural work. This Law does not provide (as the Chamber of Advocates Law, 1961, section 20, provides in relation to Advocates), that engineering or architectural operations shall only be carried out by persons entered in the Register. Nevertheless we do find in the above Law, additional provisions outlining the method for designating the operations of architects and engineers. By virtue of section 3 of that Law, the Council of Engineering and Architecture, consisting of 27 members, was established. The chairman of the Council is that Minister on whom the Government has conferred authority to implement the Law, i.e., the Minister of Labour, the present Respondent. The other members of the Council are:

           

 a.        four representatives of the Technion;

b.       thirteen representatives of the Government, appointed by the Government, among them engineers and architects;

c.       nine representatives of the Association of Engineers and Architects, appointed by the Minister upon the recommendation of the Association.

           

            Section 12 of the Law provides as follows:

           

The Minister may, by regulations, after consultation with the Council, reserve the right to carry out specified operations to licensed engineers and architects; where the right to carry out any operation has been so reserved, no person shall carry out such operation unless he is the holder of a license under section 11.

 

            The license under section 11 referred to in section 12, is issued, pursuant to the provisions of section 11, to any person whose name is entered in the Register and who has worked in the branch of his profession for a specified period which shall be not less than one year and shall not exceed three years. The holder of the license, and he alone, is entitled, pursuant to section 11(c) of the Law, to bear the title, "Licensed Engineer" or "Licensed Architect". When a registered engineer (or architect) attains the standing of a licensed engineer (or architect), and the Minister, after consultation with the Council, has reserved the right to carry out specified operations, such licensed engineer or architect is given the exclusive right to carry out the operations reserved for the member of his profession. Performance by another person of a reserved operation constitutes an offence punishable as set forth in section 14(a) of the Law.

           

            2. The Council specified in section 3 of the Law was established, and at its meeting of December 22, 1966, the Respondent brought before it a draft set of regulations for reserving of operations, prepared by the Ministry of Labour. A representative of the Respondent explained to the meeting that

           

the time had come to implement the second stage (of the Law), namely, the reserving of operations, and licensing.

 

            A discussion followed concerning methods of reserving operations, and a committee was appointed to complete the task. The Council resolved

           

to publish the regulations in another two months, even if, during that time, the committee does not complete its work.

 

            The aforementioned regulations were drawn up by the Respondent and entitled the Engineers and Architects (Licensing and Reserving of Operations) Regulations 1967. They were published in K.H. No. 2042, on May 19, 1967. In regulation 3 we find the reservation of the right to carry out operations, and the date of the coming into force of the regulations, August 1, 1967, was prescribed in regulation 5. In the introduction to the regulations the Respondent declared that he had fulfilled the duty of consultation with the Council. However, despite regulation 5, these regulations have not been implemented to this day. The reason is that on no less than five occasions the Respondent saw fit to delay implementing them by substituting another regulation for regulation 5 and each time he fixed another date. It would serve no purpose to cite all the substituted regulations; they were published in K.H. Nos. 2081, 2126, 2162, 2249 and 2270.

 

            3. Petitioners are the Association of Engineers and Architects in Israel (Petitioner No. 1) whose representatives serve as members of the Council, pursuant to section 3(4) of the Law, and eight other engineers and architects. They complain that Petitioners Nos. 2-9 have not been granted a license in accordance with section 11, and they claim that the commencement of the aforementioned regulations was delayed contrary to law.

           

            Once operations are reserved for a licensed engineer or architect, the legislature has directed, under section 12 of the Law, that a person who is not so licensed shall not carry out any of those operations. From the circular letter distributed by the Respondent to members of the Council in June 1968 (Exhibit B/2), we learn that the introduction of licensing regulations

           

            aroused a sharp reaction from the Federation of Technicians and Works Engineers which claimed that the regulations would seriously prejudice the livelihood of a large group of technicians and engineers.

           

            Indeed, the interest of the technicians in the matter of reserving engineering operations was first aroused even before the regulations were drafted. When he brought the bill before the Knesset for its second and third readings, on March 24, 1958, the Chairman of the Labour Committee said (D.H. vol. 24, p. 1509) that the Committee had opened

           

            (the) doors wide ... before scientific and public bodies ... saying, all who so wish may come and voice their objections.

           

            The Chairman mentioned the Federation of Technicians among those whose views were heard. It follows that there is no basis for the inference that the interest of the technicians in the designation of operations reserved for engineers had escaped the notice of those who initiated the Law. Rather, it may be assumed that as progress was made with the implementation of the Law, so the pressure applied by the technicians upon the Respondent increased: Exhibit B/2 testifies to their "sharp" reaction.

           

            4. Whatever be the case, the Respondent, faced with the technicians' stand, decided to delay implementing the regulations until July 1, 1968. That was the third postponement. In the meantime the Ministry of Labour appointed a Commission to examine

           

whether, and to what extent there is room for amending the regulations in order to prevent possible injury to professional persons at the technical level.

 

            That Commission held fourteen sessions and heard, among others, representatives of the Federation of Technicians and Works Engineers. In a Report submitted on June 14, 1969 (Exhibit B/3), the Commission approved of "the existence of regulations for the reserving of operations," saying that undoubtedly, without such regulations, "the Law would be emptied of content". The Commission was also aware of the fact that

           

during the period of transition, the implementing of the regulation concerning the reservation of operations was likely to result in injury to a limited number of technicians at the works engineers level, but the committee is of the opinion that the publication of the regulations should not be linked to the question of injury or non-injury to any sector of the working community.

 

            On the other hand, the Commission recommended certain changes in the regulations and the speedy enactment of the Works Engineers and Technicians Law.

           

            On June 24, 1968, the report of that Commission, called after its Chairman, the Dror Commission, was brought by the Respondent before the Council. At the same session the Respondent said that "at the time he felt that the subject of the technicians had not received appropriate consideration" and he added that the Technicians Bill was before the Government. In the same vein the Director-General of the Ministry of Labour followed with a review of the Report of the Dror Commission, saying that the Commission had been established

           

not for the purpose of examining the question of the reserving of operations, which is within the exclusive jurisdiction of this Council, but rather principally to examine the question to what extent those regulations were likely to injure the technicians.

 

            He suggested advising the Respondent to postpone bringing the regulations into force "for another few months". Mr. Dror also spoke at the session of the Council and explained, inter alia, that the reserving of operations pursuant to the regulations

           

neither deprives works engineers or technicians of a living nor does it prejudice their source of livelihood...The reserving of operations can prevent technicians and works engineers from taking responsibility upon themselves, but it cannot prevent them from working in their profession. The regulations may indeed prejudice the status of works engineers and technicians, but there is no question here of depriving them of the means of a livelihood.

 

            After the session of the Council the Respondent met a representative of the first Petitioner and a representative of the Federation of Works Engineers and reached the decision which he made known to the Petitioner in his letter of July 2, 1968, and to the works engineers the following day. His decision was to postpone implementing the regulations until August 15, 1968, in order to examine the objections of the works engineers to the Dror Commission Report. Yet the Respondent was persuaded - so he says - that the dates for implementing the reserving of operations for engineers and architects should not be bound up with the completion of preparations for the reserving of operations for technicians and works engineers. "Therefore I have decided not to link the two dates together."

           

            5. Regulation 5 was changed in order to postpone the commencement of the regulations until August 15, 1968, but they did not come into force even on that day. Instead, the Respondent brought the matter before the Government, and on August 13, 1968, the Director-General of the Ministry of Labour gave Petitioner No. 1 the following twofold notice:

           

At the meeting of the Government on August 11, 1968, the following resolution was adopted:

(a) to postpone the commencement of the regulations ... until March 31, 1969;

(b) to authorize the Minister of Labour to appoint a Commission, headed by a judge, among whose functions will be to examine the regulations and advise upon changes, if and to the extent it sees fit, with respect to operations which should be reserved solely for engineers and architects.

 

            The first Petitioner regarded that resolution as a circumvention of the Law and informed the Respondent that it would not send representatives to the Commission. The Respondent replied on September 2, 1968, saying:

           

I will have no choice but to transfer the question of the Engineers and Architects (Licensing and the Reserving of Operations) regulations to the Knesset for its decision.

 

          Faced with the Petitioner's refusal, the Commission was not constituted. Nor did the Respondent transfer the matter to the Knesset for its decision. All that was done was to postpone the commencement of the regulations until April 1,1969.

         

          Clearly, had the Respondent thought it necessary to amend the Law as originally enacted, he should have brought a bill before the Knesset. Otherwise, it is difficult to understand how the Knesset could have been of any assistance to him in performing the function imposed upon him by section 12 of the Law. Indeed, in paragraph 7(b) of the replying affidavit, the Respondent explains that his intention was not that the Knesset should amend the Law but rather that the subject should be clarified by the Knesset Labour Committee. But even that was not done. When we asked the Deputy State Attorney who, to the best of his ability, defended before us a position which was indefensible, what had happened to the Respondent's appeal to the Labour Committee, he directed us to the Committee's letter of August 8, 1969. That letter, however, does not contain any evidence of an appeal by the Respondent to the Labour Committee, but rather of an appeal by the Federation of Technicians and Works Engineers, and it ends with a recommendation to postpone implementation of the regulations

         

          for an appropriate period to afford an opportunity to examine the matter further.

         

          Given the fact that the subject had already been examined by the Dror Commission and that it had also become clear to the Respondent that the date for the reserving of operations should not be tied to a similar arrangement in relation to the technicians, what would be the appropriate period required for further investigation? From the replies of the Deputy State Attorney, it appears that not only is the period until March 31, 1969, insufficient, but that the Respondent is unwilling to specify any date whatsoever on which the arrangement will come into force, whether in its present form or in any other form as might be prescribed in other regulations. It should be remembered, that if the regulations are not satisfactory and require amendment, as the Dror Commission also pointed out, nothing prevents the Respondent, after consultation with the Council, from framing other regulations, by virtue of section 12 of the Law. The Report of the Dror Commission prima facie supports the Petitioners' argument that, from a technical and professional point of view, it would not be difficult to reserve the operations in the appropriate manner and to designate which operations require the knowledge and expertise of an engineer. If, in spite of Mr. Dror's finding that the present regulations do not deprive technicians of their livelihood, the Respondent does not specify a definite date when this replacement of regulation 5 will come to an end, it is no wonder that the Petitioners claim that the Respondent has decided not to decide anything. In other words, the object of the Law - the reserving of operations for a licensed engineer and a licensed architect - will not be achieved.

 

            6. The Deputy State Attorney argues that the power given to the Respondent under section 12 of the Law, is a power which is not coupled with a duty. At his will the Respondent may exercise the power and at his will, he may refrain from doing so. We are not inclined to accept this argument. True, when the word "may" appears in legislation, its simple meaning is that prima facie it vests a power or discretion, yet it also empowers the person holding the authority to do something and sometimes, coupled with the power is the duty to act in accordance with its terms: see Julius v. Lord Bishop of Oxford (1880) [2]. The Deputy State Attorney emphasizes that the subject of the registration of engineers was dealt with in the Law itself, in section 9, and that is the principal concern. He points out that whereas in other Laws, such as the Chamber of Advocates Law, the Knesset itself specified the reserved operations of the profession, the reservation in the present case it left to the Minister. Yet that fact does not prove that the designation of those operations which require the expertise of an engineer is on a lower level or a matter of minor importance. The opposite would appear to be true. The matter acquires greater importance because the Respondent must supplement the Law with what it lacks before it can be implemented.

           

            When on May 21, 1956, the Minister of Labour introduced the bill for its first reading at the 129th session of the Knesset (D.H. Vol. XI, at p. 1790) she emphasized that the work of architects and engineers lacks governmental supervision, remarking as follows:

           

            Not once only have our eyes seen the results of this situation, and more than once have we paid the price for the absence of regulation in these areas, in human casualties and in the loss of property.

           

            Registration under section 9 of the Law is merely preliminary to the receipt of a license, and the legislature has directed that a license shall not be issued solely on the basis of registration but depend also on the practical experience of the person registered, as provided in section 11 of the Law. In her above mentioned opening remarks, the Minister of Labour also hinted at this. Licensing makes no sense without the designation of those operations that a person not so licensed is not entitled to do. Section 11 and section 12 of the Law are interrelated one with the other, and should not be separated. By leaving to the Minister the task of the reserving of operations, the Knesset sought to achieve two objectives:

              

1.    to make the reserving of operations conditional upon previous consultation with the Council, a process difficult for the members of the Knesset to undertake;

 

2.     reservation of operations by way of subordinate legislation makes it easier to introduce changes when necessary and relieve the Government of the need to turn to the Knesset every time it has to change the designated operations.

 

            But the legislative purpose of which the Minister of Labour spoke cannot be achieved by registration alone. Reasons dictates, therefore, that what the Knesset has left to the subordinate legislator must, of necessity, be done by that body so as not to leave a lacuna in the Law and in order to complete the work of primary legislation.

           

            7. However in point of fact, we are relieved of the need to decide whether the power given to the Respondent by section 12 requires him to exercise it. The Respondent framed the regulations, reserved certain operations and later even made a declaration on the necessity of so doing, as has already been explained. Thus he revealed his own view that it was fitting for him to exercise his power of delegated legislation and the question whether he was bound to do so or not, is not before us. Should the Respondent change his mind and no longer wish to designate which operations should be reserved, nothing prevents him from annulling the regulations after holding further consultation with the Council, as specified in section 12. So far he has not done so.

           

            The question remains whether it was lawful to amend regulation 5 of the original regulations from time to time. Under section 16(1) of the Interpretation Ordinance, where a law confers on an authority power to make regulations

           

            (1) a regulation may at any time be amended, varied, suspended or revoked by the same authority and in the same manner by and in which it was made.

           

            Under section 12 of the Law, the making of regulations for the purpose of reserving operations is conditional on prior consultation with the Council, and under section 16 of the Interpretation Ordinance, so is their revocation and amendment. Where a Law authorizes an authority to enact legislation after prior consultation with a given person and that authority does not fulfill the duty of consultation, the delegated legislation is void: H.C. 384/66[1]. The duty of consultation is a restraint upon the legislative power of the subordinate legislator and a person who legislates without consultation exceeds his authority.

           

            8. The Respondent consulted with the Council before making the original regulations and again, before postponing until August 15, 1968 - for the fourth time - their coming into force. He did not, however, consult with the Council before the fifth postponement, made for the purpose of framing The Engineers and Architects (Licensing and Reserving of Operations) (Amendment No. 4) Regulations, 1968. In those amending regulations the implementation of the principal regulations was postponed until April 1, 1969. But since they were amended without consultation the amendment is void in law. It follows that regulation 5 remains in the form prescribed in K.H. No. 2249, and the reservation of operations came into effect on August 15, 1968.

           

            Counsel for the Respondent submitted before us two arguments in support of his claim that the Respondent was exempt from consulting with the Council before instituting the aforementioned amending regulations. He contended first, that the Respondent was not obliged to consult with the Council upon postponing the coming into force of the regulations but only upon the modes of reserving operations. We do not agree with this argument. From the minutes of the two sessions of the Council that we have mentioned, it is clear that the Council was requested to advise the Minister not only upon the methods of reserving to the profession the appropriate operations, but also to express its opinion about the date until which the regulations - and therefore in fact, the implementation of the Law - could be postponed. At the session of the Council held on December 22, 1966, Mr. Bassin, the Engineers Registrar, said:

           

Only the setting in motion of the licensing system as soon as possible can bring real order into the engineering and architectural professions in Israel.

 

            And at the second session held on June 24, 1968 (which preceded the postponement of the regulations from July 1, 1968 until August 15, 1968), the Director-General of the Ministry of Labour who was in the chair, expressed the opinion that "the matter should be delayed for another few months" in order to examine the recommendations of the Dror Commission and the objections of the technicians. Were this a question of merely a short delay it is possible that we would not regard so strictly fulfillment of the duty of consultation. But since the commencement of the regulations has already been postponed no fewer than five times, and counsel for the Respondent informs us that when the next appointed date is reached there will be another postponement - and so it will go on, since he is unable to specify a final date - the technique of postponement has, in effect, become an instrument for preventing the designation of operations. Originally, the Respondent resolved to designate which operations would require the employment of a licensed professional. When he continues to postpone the arrangement from one date to another - in fact, indefinitely - it is as if he has withdrawn from such designation and now permits anyone who so desires, to work in the profession. To do that he must proceed in accordance with section 16 of the Interpretation Ordinance.

 

            The second argument of Respondent's counsel was that the consultation held by the Respondent with the Council at its session on June 24, 1968 "covers", as it were, any additional postponement and not only that which followed this consultation. This argument, too, cannot be supported. We have seen that the said consultation induced the Respondent to delay implementing the regulations only until August 15, 1968, and he expressed his opinion that after that date they should be implemented "without delay". That consultation covered nothing more. If, after that date, other material came before the Respondent, or if he saw the facts which had already been considered in another light, he should have brought his thoughts before the Council and heard its advice. The decision is his, yet, as Lord Greene said in Rollo v. Minister of Town Planning ([3] at p. 16), he is not entitled to say: "I will not listen to any proposal that you might make!".

           

            In that case, the Minister was obliged to consult with the local authority and in that context Bucknill J. clarified (at p. 17, ibid. ) the meaning of consultation. The relevant passage is cited by Halevi J., in H.C.384/66[1]:

           

            ... on the one side, the Minister must supply sufficient information to the local authority to enable them to tender advice, and, on the other hand, a sufficient opportunity must be given to the authority to tender that advice.

 

            Needless to say, even if the Minister is not obliged to accept such advice he must listen to it "with a receptive mind". If no consultation is held the Council does not know what caused the change in the Respondent's attitude after the session of June 24, 1968, and he, the Respondent, does not know how they regard those considerations which guided him.

           

            9. In the present case, in view of the eminent status of the Council the duty of consultation takes on additional importance. The Government has a clear majority on the Council; out of twenty-seven members, fourteen are representatives of the Government. This was intentional and the Chairman of the Labour Committee explained that intention in the following words (D.H. vol. XXIV, at p. 1510).

           

In order to impose upon the Government - and that was our principal object - the responsibility for implementing the Law, a parliamentary responsibility, and in order to enable us to hold it to its responsibility for upholding the Law, we safeguarded, in the bill which we are bringing before you, a majority to the Government representatives.

 

            The importance of the views of such a body set up for this purpose cannot be underestimated.

           

            Accordingly, we make absolute the order nisi and declare that the Engineers and Architects (Licensing and Reserving of Operations) (Amendment No. 4) Regulations, 1968, are invalid. The Respondent shall examine the requests of Petitioners Numbers 2-9 and shall issue each of them a license, after it is proved that they have fulfilled the conditions prescribed in the Law.

           

            The Respondent shall pay the Petitioners' costs which shall include counsel's fees in the sum of IL.500.

           

            Order nisi made absolute.

           

            Judgment given on January 30, 1969.

Sheleg Lavan v. Ashkelon Municipality

Case/docket number: 
AAA 9241/09
Date Decided: 
Thursday, July 8, 2010
Decision Type: 
Appellate
Abstract: 

Facts: The respondent, the Ashkelon municipal government, issued a tender for the provision of cleaning services. The tender documents set a minimum bid price in accordance with the exact amount of the wages for cleaning workers as determined in a government circular establishing a national standard for such wages. Respondent 2 submitted the lowest and ultimately winning bid. As part of the tender process, respondent 2 explained its ability to pay the minimum wage while also covering expenses and earning a profit by noting its expectations that a percentage of its workers at any given time would not have acquired enough seniority to entitle them to pension and other benefits; thus, savings with respect to the compensation of its workers would allow the respondent to cover its expenses and earn a minimal profit. The lower court upheld the award of the tender to the respondent, noting that the tender itself had included no requirement regarding the seniority of workers and that the bid was therefore entirely acceptable. The appellant, which had tendered unsuccessfully on the basis of a higher salary cost, appealed.

 

Held: The appeal against the lower court’s decision was allowed in full. There is no ground for distinguishing between the rules governing this matter in a national government context and the rules that apply to local government; recently enacted regulations and government directives make clear that the upholding of workers’ rights is of paramount importance and will be a relevant consideration in government tender decisions, because of the administrative authorities’ obligations vis-à-vis the public. Although it is impossible to predict or to prevent every possible violation of workers’ rights through the tender process, a government authority issuing a tender to contract for services with an external party must nevertheless provide as much forward-looking protection for the contractors’ workers as is possible. Thus, when a bidder has expressly stated a plan to dismiss workers after particularly short periods of time in order to minimize the burden of social benefit payments, the bid cannot be accepted.

 

Appeal allowed.

Voting Justices: 
Primary Author
majority opinion
majority opinion
Author
concurrence
Full text of the opinion: 

AAA 9241/09

 

Sheleg Lavan (White Snow) 1986 Ltd

v.

  1. Ashkelon Municipality
  2. Ram K.R.M. Ltd
  3. Tnufa Personnel Services Ltd
  4. J.J.A. Maintenance and Services Ltd.

 

The Supreme Court

Sitting as a Court of Appeals for Administrative Affairs

[8 July 2010]

 

Before Justices E.E. Levy, E. Arbel and N. Hendel

 

Appeal of an Administrative Affairs decision of the Beersheba District Court dated 8 November 2009 in AA 357/09, issued by the Honorable President J. Elon.

 

Facts: The respondent, the Ashkelon municipal government, issued a tender for the provision of cleaning services. The tender documents set a minimum bid price in accordance with the exact amount of the wages for cleaning workers as determined in a government circular establishing a national standard for such wages. Respondent 2 submitted the lowest and ultimately winning bid. As part of the tender process, respondent 2 explained its ability to pay the minimum wage while also covering expenses and earning a profit by noting its expectations that a percentage of its workers at any given time would not have acquired enough seniority to entitle them to pension and other benefits; thus, savings with respect to the compensation of its workers would allow the respondent to cover its expenses and earn a minimal profit. The lower court upheld the award of the tender to the respondent, noting that the tender itself had included no requirement regarding the seniority of workers and that the bid was therefore entirely acceptable. The appellant, which had tendered unsuccessfully on the basis of a higher salary cost, appealed.

 

Held: The appeal against the lower court’s decision was allowed in full. There is no ground for distinguishing between the rules governing this matter in a national government context and the rules that apply to local government; recently enacted regulations and government directives make clear that the upholding of workers’ rights is of paramount importance and will be a relevant consideration in government tender decisions, because of the administrative authorities’ obligations vis-à-vis the public. Although it is impossible to predict or to prevent every possible violation of workers’ rights through the tender process, a government authority issuing a tender to contract for services with an external party must nevertheless provide as much forward-looking protection for the contractors’ workers as is possible. Thus, when a bidder has expressly stated a plan to dismiss workers after particularly short periods of time in order to minimize the burden of social benefit payments, the bid cannot be accepted.

 

Appeal allowed.

 

     Legislation cited:

Severance Pay Law, s. 3.

Local Councils Order (a), 5711-1951, s. 192.

Local Councils Order (Regional Councils), 5718-1958, s. 89.

Mandatory Tenders Law, 5752-1992.

Municipalities Ordinance [New Version], 5724-1964, s. 197.

Municipalities Regulations (Tenders), 5748-1987, reg. 11.

 

Supreme Court Case Cited

[1]...... HCJ 10245/07 Israel National Organization of Guarding and Security Companies v. Minister of Justice (2007) (unreported).

 

District Court Cases Cited

[2]       AP (TA) Modi’in Ezrachi Ltd v. Association of Dan Region Municipalities (2008).

[3]       AP (Jerusalem) 1077/06 Koach Otzma Ltd. v. Jewish National Fund/Keren Kayemeth Le’Israel (2007).

[4]       AP (Nazareth) 117/08 Reshef Security [1993] Ltd v. Afula Municipality (2008).

 

Labor Court Cases Cited

[5]       NLC 45/44-3 Kara v. Ofir (1995) (unreported).

[6]       LabA 122/03 Waxman v. ITC 24 Around the Clock (2007) (not yet reported).

[7]       LabA 420/06 Kogen v. Kfir Electronic Security and Protection Ltd (2007) (not yet reported).

 

For the appellant — R. Barak; R. Garber.

For respondent 1 — Y. Avishur.

For respondent 2 — G. Tavur.

For respondent 3 — A. Shur; A. Lazar.

For respondent 4 — A. Kaminetzky.

 

JUDGMENT

 

Justice E.E. Levy

Factual background

1.    In May 2009, respondent 1, the Ashkelon municipality, published a tender for the provision of cleaning services in its offices and in the city’s educational institutions. The tender covered a period of two years with the possibility of an extension for an additional period. The appellant and the respondents were among those that submitted bids for the tender, and respondent 2, Ram K.R.M. Ltd, was awarded the contract.

Section 2 (b)(3) of the tender conditions provided as follows:

Bids will be based on the tender documents [including] the “Tender Participant’s Proposal” form which includes the costing of wages for the employer (Appendix A to the Proposal Form).’

Appendix A, which is the Tender Participant’s Proposal form, adds the following:

The amount per work-hour [proposed by the participant] will not be less than the minimum amount of NIS 28.64.

Section 4 of the tender conditions provides that a bid specifying an amount lower than the minimum amount will be disqualified.

The minimum amount is based on a single variable: the cost of the lawful employment of a cleaning worker. The calculation made by the municipality relies on Directive No. 2007-2-41, published by the Ministry of Finance Accountant-General and dated 10 Av 5767 (24 July 2007), entitled “Protection of Rights of Workers Employed by Service Contractors.” The Directive was made binding on the local authorities in Circular No. 460 (December 2007) of the Director-General of the Center for Local Government, as ordered by the Director-General of the Ministry of the Interior.

The appellant proposed to provide the service for NIS 29.34 per work-hour. The party that was awarded the contract, Ram K.R.M., submitted a lower bid, in which it offered the prescribed minimum price. However, since it is presumed that a bid submitted in a tender reflects not only the costs of the wages to be paid to the bidder’s workers, but also additional expenses (here — materials, equipment and supervision costs), as well as a profit, the winning party was asked to explain to the tenders committee how the terms of its bid would allow it to comply with the tender conditions. After a discussion that I see no need to describe at length, the winning party submitted a calculation which indicated that it would be able to comply with the tender conditions, and even to earn a profit – even if it was charging the municipality only the minimum price. The calculation was simple: while the wage components as laid out on the basis of the Accountant-General’s specification related to workers with more than one year of seniority, the winning bidder presumed that a certain percentage of the workers that it would employ would have less seniority than that, and the cost of their employment would therefore be lower. In calculating the costs of the allocations for pensions, which the employer is required to set aside only after six months of employment, the winning party calculated that “20% of the workers are expected not to work for more than half a year” (Pricing Letter dated 16 July 2009, Exhibit G of the appellant’s exhibits). Regarding the cost of severance pay and of seniority-based salary increments, to which a worker with one year or more of seniority is entitled, “the consideration was of [only] 60% of the employees[,] who are expacted to work for more than one year” (ibid.). The National Insurance payments component was also set at a lower rate than that established in the Accountant-General’s directives, based on an assumption that the savings in the above-mentioned salary components would generate savings in relation to the obligatory National Insurance payments related to such components. Based on these calculations, the party that was awarded the tender argued that it could pay the workers their legally mandated wages, and at the same time pay all the expenses involved in the provision of the service and also generate an (admittedly low) profit from the contract with the municipality — a profit of two percent of the value of the transaction.

2.    The Beersheba District Court dismissed the appellant’s argument that the tender should be cancelled in the absence of any legally acceptable estimate and that in any event the winning bid should be disqualified, on the grounds that it reflects either an underpayment of the amounts to be paid to the workers, meaning a violation of their rights; or, alternatively, a financial loss to the party submitting the bid, meaning a deficit bid which it could not fulfill. The District Court held that the “calculation made by the Ram Company regarding the mix of seniorities for the workers that it would employ to carry out the work, as reducing the marginal costs proposed in the context of the pricing, is acceptable, and it is not unrealistic” (third paragraph of the decision). “There is no doubt,” the President wrote, “that it would be preferable for the workers that their employment be long-term. However, this item is not a material condition of the tender — either express or implicit — and the tender’s retroactive expansion so as to include the item as a threshold condition is a contravention of the principles of the law of tenders” (ibid., at para. 5). “The bid price,” the lower court added in its holding, “thus ensures the payments to the employees” (ibid., at para. 4). Regarding the tender itself, the court held that “the appendices establishing the minimum price bid for the cost of average work-hours comply with the required criteria, in light of the nature of the tender — in which the pricing and the costs are comprised, almost exclusively, of the costs of an average work-hour” (ibid., at para. 7).

This is the main issue in the appeal before us, and it appears to me to be obvious that the appeal must be allowed.

The normative framework

3.    Section 197 of the Municipalities Ordinance [New Version], 5724–1964 (like its parallel provisions, s. 192 of the Local Councils Order (a), 5711–1951 and s. 89 of the Local Councils Order (Regional Councils), 5718–1958), establishes that municipalities are required to contract for the execution of work through the issuance of a public tender. The Ordinance, like the Municipal Regulations (Tenders), 5748–1987 — which were enacted pursuant to the Ordinance — does not refer to any obligation to be especially meticulous regarding the rights of the employees of the contractor with whom the municipality enters into a contract. The Mandatory Tenders Law, 5752–1992, which establishes the duty of government ministries and of other public entities to contract through public tenders, also did not include — until recently — any provision in this spirit.

However, the regime that protects the rights of the employees of bidders at public tenders is an integral part of the law of tenders — in theory, and since recently, recently in practice as well. This regime is derived, first and foremost, from the fiduciary duty that the administrative authorities owe to the public (D. Barak-Erez, Administrative Law (2010), at p. 631); from the fact that the objectives in pursuit of which the authorities act are not purely economic (O. Dekel, The Tenders Requirement for Administrative Entities (2001), 49, at p. 293); and from the fact that the activity of these authorities is subject to all aspects of public policy — i.e., that they are subject to all the “basic principles of the legal system” (S. Gavish, Issues in the Law of Public Tenders (1997), at p. 24). It is undisputed that the protective labor laws constitute an essential part of these principles. Thus, the case law also reflects the concept that “when the state contracts with external parties, it is entitled, and even obligated, to do what it can in order to ensure that the protective laws are upheld and that the scope of the violation of the rights of the workers is minimized” (HCJ 10245/07 Israel National Organization of Guarding and Security Companies v. Minister of Justice [1]). And in this respect, the rule applicable to the state is also applicable to the local authorities, whose activities are subject to the same principles of public law.

Alongside this obligation in principle, a number of concrete steps have been taken in recent years to intensify the protection of the rights of the workers of parties bidding in a public tender. In February 2007, the Government adopted Resolution no. 1134, which directs the Ministry of Finance’s Accountant-General to extend the applicability of the labor laws to cover parties providing services to the government in labor-intensive fields, and to establish directives that protect the rights of their workers. At the same time, the Director-General of the Ministry of the Interior and the Director of the Government Companies Authority were ordered to implement these rules within the local authorities and the government companies. Consequently, the Funds and Economy By-laws ([known by their Hebrew acronym as] the Takam), issued by the Accountant-General, which include rules protecting workers’ rights, came to be binding on most public authorities (see also G. Shalev, “Public Tenders After the Mandatory Tenders Law, 5742-1992” 2 Mishpat U’Mimshal (Law and Government) 455 (1995), at p. 457; S. Herzig, Law of Tenders (vol. 2, 2002), at p. 72).

In February 2009, the Mandatory Tenders Regulations, 5753-1993, KT 6750, were amended; the main part of the amendment entered into effect in June 2009. The duty to be meticulous regarding workers’ rights runs through the Regulations like a crimson thread. Thus, for example, a tenders committee is authorized to invalidate bids the acceptance of which would involve a violation of workers’ rights (Regulation 20(d)); a bid submitted by a party that was convicted of a violation of labor laws during the years preceding the tender must be rejected (Regulation 6a(a)); and the matter of diligence regarding workers’ rights is established as one of the criteria to be used in weighing the qualified bids that have been submitted (Regulation 22(a)(6)). The literal language of these Regulations does not bind local authorities, as they cover only those entities that are subject to the Mandatory Tenders Law; however, in the absence of any substantive basis for distinguishing in this matter between government ministries and the local authority, it is only natural that those matters that have not yet been regulated in express language by the legislator will be supplemented by the case law, taking a coherent view of the principles of the public tender.

The fundamental principle –– i.e., that as part of the requirement within the law of tenders that a bid must be examined on the basis of its benefit for the public and its fair and reasonable price, it is also necessary to examine the treatment, within the framework of the bid, of the rights of the workers who will be employed thereby –– has already found expression in the rulings of the administrative tribunals of the lower courts. In a recent case, Judge M. Rubinstein of the Tel Aviv-Jaffa District Court aptly described the matter as follows:

‘A reasonable decision by a tenders committee can lead to the selection of a bid which is not the cheapest, but which considers additional matters beyond the price criterion. The bidder’s ability to ensure the rights of its workers in the framework of the project which is the subject of the tender could be [one such] additional consideration. This consideration is different from considerations such as the bidder’s experience, training, reliability, etc., since it does not relate to the customer’s ability to provide the services that are being requested through the tender, and instead refers to the interest of a third party — the bidder’s workers — who are not technically a part of the contractual relationship between the parties. Although this consideration does not pertain, on its face, to the relationship between the customer and the bidder, there has been a clear tendency in recent years, both on the part of government entities and on the part of the courts, to insist that tenders for the provision of services to public entities also ensure the rights of the workers of the providers of those services’ (AP (TA) 1705/07 Modi’in Ezrachi Ltd v. Association of Dan Region Municipalities [2], at para. 12).

Public tenders as a platform for the violation of workers’ rights

4.    The juridical approach described here developed against a background in which violations are committed — a reality that unfortunately has been the norm for many years in service industries such as security and cleaning, and which has penetrated to the heart of public service as the number of contracts with external contractors has increased. A major characteristic of contracts of this type is the buffer zone that they create between the direct employer and the worker, which reduces the “visibility” of the latter as well as his negotiating power and the knowledge that is made available to him, and which opens a very wide door to a diminution of the worker’s rights. “The hiring of manpower services”, writes Dr. Omer Dekel, “has long since become an easy way to bypass the statutory constraints regarding minimum wages, the requirement to provide social conditions to workers, etc.” (Dekel, The Tenders Requirement for Administrative Entities, supra, at p. 371, n. 42). A clinical study conducted several years ago at the Hebrew University of Jerusalem observed this phenomenon at close range:

‘Service contractors work for profit, and it cannot be presumed that they are willing to finance the gap between the cost of providing the service and the price they ask for their services . . . The workers, who are the weakest link in the chain, are the ones who generally pay the price for the low bid [in the tender]. In a field project that documented the employment terms of forty-six contract workers at government ministries (especially cleaning workers), there were very high rates of violations of protective rights with respect to almost all the issues about which the workers were questioned. Most of the workers (almost forty workers out of forty-six) reported that they do not receive the pension payments to which they are entitled pursuant to the Expansion Orders relating to the cleaning industry. A similar number of workers reported that they do not receive payment for holidays, and the same was true regarding payment for overtime and for sick days. Twenty-eight workers (out of thirty-six who answered the question) reported that they do not receive an annual vacation; thirty-one workers (out of forty-three) reported that they are not paid convalescence payments. Most of the workers reported a high number of violations that are committed concurrently. Similar findings were reached through field checks regarding the violation of the rights of security workers employed through contractors . . . The deficit tender method has become an “incubator” for violative employment’ (A. Benish and R.Tsarfatie, “When Labor Becomes a Commodity Again: A Critical Examination of Abnormally Low Bids in the Procurement of Employment Services”, 1 Maa’sei Mishpat 93 (2008), at p. 98 (emphases added)).   

A glimpse into the manner in which these phenomena occur in practice was provided at a meeting of the Knesset’s Labor, Welfare and Health Committee on 22 May 2005. The subject of the meeting was the situation of workers in labor-intensive services, and one service contractor testified about a practice which is common among many employers:

‘I can tell you that because of the current state of the market, I automatically do not pay for workers’ social benefits, [and I do this] in order to survive. [Only] if a worker asks for such, I will not refuse, and this is the highest level of fairness being practiced in my market . . . I must pay the minimum wage plus National Insurance and vacation pay, then I fire [the worker] after seven or eight months, and I am not required to pay towards a pension, convalescence or severance pay for him,. . .’

The Law of Tenders as a Preventative Measure

5.    Various mechanisms, from several areas of law, come to mind — mechanisms which can reduce these violations of the labor laws. Some of them are invoked after the violation has occurred, and are based on ex post considerations. These include, inter alia, various supervisory measures that the issuer of the tender can implement vis-à-vis the party that is awarded the contract. They also include the labor laws that are available to a worker who wishes to defend his rights, and the principles of administrative law, pursuant to which complaints may be submitted to a government authority that is not fulfilling its public obligations. By their nature, these ex post measures are more precise in their treatment of a violation that has already taken place, as they can take into consideration, inter alia, the nature of the violation, its circumstances and its intensity. However, their power as a preventative measure, the main point of which is to deter the violator, is limited. To the extent that the matter depends on a party issuing the tender, it is doubtful that such a party would be motivated to reopen a contract that it has already found to be preferable in terms of its price, and the replacement of which, or the enforcement of its specific terms, entails a complicated and expensive process. Regarding a worker whose interests have been violated, reality demonstrates that his access to information regarding his rights will be limited, and his willingness to pursue those rights of which he is aware will be even less.

6.    Nevertheless, the law of tenders seeks to examine a possible violation of workers’ rights from a forward-looking perspective (ex ante) and to prevent the violation before it takes place. Naturally, the manner in which the law is applied is derived from the fact that at the preliminary stage, the details of a particular violation which has not yet occurred cannot be known — and all that can be done is to prescribe a general framework that will reduce the chances of its occurrence. Such a framework, included as an integral part of the tender conditions with which all bidders must comply, is certainly not an exact one. For example, a tender issuer who wishes to reduce the risk of a violation of the rights of female employees, and to ensure that bidders will comply with their obligations under the laws that protect women at work, can choose to require that bidders demonstrate that they are capable of honoring, meticulously, the special rights granted to working women. This is an option even when it is not known whether any women will actually be employed in the work under tender, or what percentage of all the workers may in fact be women. Obviously, the estimation component of every such measure detracts from that measure’s ability to totally prevent all future violations. But a prospective view makes a unique contribution to the combined effort to reduce the risk of a violation of the workers’ rights. It thus appears that the prevention of a violation at an early stage is more efficient, not only in terms of the principles of labor law, but also with regard to the additional objectives of the tender process. I strongly support the statement that “the state, in the role of customer, is the most effective means of preventing this phenomenon [of the diminution of workers’ rights] (Benish & Tsarfatie, “When Labor Becomes a Commodity Again”, supra, at p. 104).

The unique aspect of public tender law is that it stands at a legal junction, at which basic elements of various legal fields meet. Administrative and economic efficiency, morality, public ethics, the observance of freedom of contract in its broader sense, diligent observance of the principle of equality — including equality of opportunity — are some of the principles that meet within the law of tenders (O. Dekel, Tenders (vol. A, 2004), at p. 92; O. Dekel, “The Purposes of the Tender: Equality is not the Main Point,” in Y. Dotan, A. Bendor, eds., Y. Zamir Volume on Law, Government and Society (2005), 441, at p. 474). In my view, the realization of protective labor law is one of the goals of the law of tenders, alongside the other objectives of this particular field of law.

The basic principles of labor law — a degree of social security for the worker

7.    The protective labor laws also have several objectives. One of them is to ensure a certain degree of social security for the worker is one of them. The essence of this objective is to establish that when a worker is unable to work, he will be able, for a certain period of time, to continue to support himself. A worker who becomes ill is entitled to sick pay. A female worker who has given birth is entitled to maternity leave. A worker who has been dismissed is entitled to severance pay, and the purpose of such pay is to provide a means of support for the worker while he looks for alternative work. A worker who is either on convalescence leave or in a period of convalescence will continue to receive a salary even without actually being at his place of employment. Some of these social rights result from the connection between the employee and his place of work. A dedicated worker, who is sufficiently connected to the workplace to allow the employer to feel secure with respect to his ability to keep the business going, is entitled to the same level of security with respect to his own ability to earn a living. One indication of the existence of an established employment relationship is the seniority accumulated by a worker at the place of work. The labor laws therefore establish that a worker whose connection to the employer is severed after a few months will be treated differently from one who has worked at a single place of employment for a period of a year or more.

However, this concept, together with its accompanying logic, might do more harm than good. An employer, who benefits from the worker’s labor, is nevertheless liable to terminate the employment relationship if, according to the employer’s calculation, the financial profit that he derives from the worker is less than the cost of the social payments that he will be required to make for the worker over time. This situation is not generally the lot of well-placed workers who carry substantial market power. But it is very common in relation to workers whose position is weak, and whose professional skills can be provided by replacement workers with less seniority andwho have not yet accumulated any rights. Workers in the labor-intensive service industries, such as the cleaning industry, are workers of this type. It is therefore not surprising that some employers of cleaning workers habitually terminate the employment relationship with their workers before the first year of employment has ended, in order to increase the financial profit that they can produce. In relation to the submission of bids for a public tender for cleaning services, in which the profit margins are in any event very low, the concern that such a process will be followed increases drastically.

8.    Market forces cannot provide a response to this issue. Regulatory action is required. A number of tools have been developed within the field of labor law to deal with such situations. Thus, the law does not recognize the legitimacy of a termination of an employment relationship when there is a basis for concluding that the reason for the termination was avoidance of an obligation to pay for social benefits. Section 3 of the Severance Pay Law, 5723-1953 establishes a presumption according to which “a dismissal shortly before the end of the first year of employment will be considered — unless proven otherwise — as resulting from the intention to avoid the obligation to pay severance pay, and such a dismissal will not adversely affect the right to severance pay.” The case law has added that this provision is to be implemented on a substantive level, meaning that even if a worker’s dismissal did not occur close to the end of the first year, but did take place against a background indicating an intention to avoid payment of social benefits, the employer will not be exempt from liability for the said payment (NLC 45/44-3 Kara v. Ofir [5], at para. 11; LabA 122/03 Waxman v. ITC 24 Around the Clock [6]; Y. Luvotsky, Concluding Employment Relationships (2004), at pp. 3-9). Similarly, it has been held the employment of a worker for a period which is limited, not because of the needs of the actual job, but because of an intention to prevent the worker from accumulating seniority, cannot serve to deny the worker his entitlement (LabA 420/06 Kogen v. Kfir Electronic Security and Protection Ltd [7], at para. 12(b)).

9. These are, as stated, ex post measures, designed to deal with the deliberate evasion of obligations to workers, after the employers have already made attempts to engage in such evasion. But they suggest a general principle of law — that the employer’s termination of an employment relationship, when the reason for such is the avoidance of the realization of the employee’s rights, will not be recognized. An implication of this rule, when it is viewed from the perspective of the law of tenders, is that a bidder may not, in attempting to make his bid the preferable one, rely on the dismissal of a worker or on any other limitation of a worker’s rights.

A tender issuer who wishes to safeguard the rights of the workers of the winning bidder can use a variety of measures (see, for example, Dekel, Tenders (vol. A), supra, at p. 414). One of these is the measure used in the present case, which is the establishment of a minimum price that reflects the proper cost of the employment of workers, as a part of the tender conditions themselves. This measure, being a preventative measure which is adopted in advance, cannot be absolutely precise and cannot respond, from the outset, to every possible violation. By its nature, it will focus on the establishment of threshold requirements that are designed to deal with the source of wrongful conduct on the part of employers. Because a key aspect of the harm that is done to the workers is the phenomenon of dismissal before the end of a year of employment, there is good reason to calculate the cost of the employment of workers on the basis of the wage components of workers who have been employed for over a year. Of course, this measure cannot ensure that no violation will occur. Nevertheless, it can reflect the position of the public authority issuing the tender that it will not accept a diminishment of the workers’ rights; furthermore, it may be assumed that a bidder who has made a commitment from the outset to a price that properly reflects the transaction will be able, in the end, to comply with the tender conditions, and that such a bidder’s incentives to violate his workers’ rights in order to win the tender and to execute it will be reduced. This is similar to the rationale underlying the invalidation of a deficit bid, regarding which there is a concern that ultimately the winner will encounter difficulty in complying with the tender conditions (S. Herzig, Law of Tenders (vol. 1, 2001) at p. 217; O. Dekel, Tenders (vol. B, 2006), at p. 123). Nevertheless, I would strongly emphasize that the approach whereby workers’ rights should be protected through the tender itself does not draw its main strength from the benefit derived from ensuring the tender’s implementation according to the terms included in the winning bid. Instead, it stands independently, as one of a number of objectives that the law of tenders seeks to realize.

The tender conditions and the preparation of an estimate

10.  The above discussion clearly indicates that the establishment of a minimum price, based only on the cost of the employment and ignoring the cost of other components of the tender such as other expenses and profit, will not achieve the above-mentioned objective. It, too, generates the concern that if a bid indicating the threshold price is not a deficit bid, it will necessarily involve a violation of the workers’ rights. A tender with conditions such as these essentially calls for a violation of basic elements of labor law, or alternatively, of the principle of efficiency. It is therefore impossible to allow it to stand. A minimum price mechanism is not, as I have already noted, the only tool, or a necessary tool, for protecting the workers’ rights, but if the authority has chosen to use it, it must make certain that the mechanism provides true protection, and it must certainly ensure that the minimum price mechanism itself is not the cause of the future violation that the authority seeks to prevent.

11. The natural place for the above-mentioned cost elements is in the estimate that the local authority issuing the tender is required by law to formulate, in compliance with its obligation pursuant to Regulation 11 of the Municipalities Regulations (Tenders). This regulation requires that the authority deposit in the tender box, in advance, a “detailed estimate of expenses or income involved in the proposed contract”. According to its purpose, the estimate serves as a measurement for objective assessment, against which all the qualified bids that have been submitted are measured (Dekel, Tenders (vol. A), supra, at p. 385). It must include a specification of all the expected cost elements, against which the tenders committee will measure the cost elements in the bids. It is presumed that the estimate expresses the proper value of the contractual relationship, but this presumption can be refuted when it is proved that the amount in the estimate is unreasonable (ibid.). The result of an unreasonable estimate will vary depending on the circumstances (Herzig, Law of Tenders, supra, at p. 220). However, I see no need to discuss the matter at length, since I believe that it is a basic principle that the estimate does not replace the substantive conditions of the tender. It is nothing more than a helpful tool to be used by the tender issuer in formulating the conditions and in examining the bids. But it is therefore clear that even a reasonable estimate, which has been properly prepared, cannot compensate for a defect in the tender conditions.

The tender in this case

12.  In my view, this case involves a bid that was submitted on a deficit basis or that violates the workers’ rights. Such a bid should not have been accorded preference, because the bidder, by virtue of the price tendered, indicates that it will encounter difficulty in fulfilling the tender conditions and in realizing its objectives. According to the bid that was tendered, the profit for the party winning the tender was dependent on the realization of several assumptions regarding the composition of the future work force that the contractor would employ. Respondent 2 was unable to explain — either to the tenders committee in the context of a clarification that it conducted, or in its response to this appeal — the basis for the belief that these assumptions would be realized. The matter works against them in two ways: either these were theoretical assumptions that cannot serve as a basis for winning the tender — regarding which it has been said that “in such cases, it is not sufficient to rely on estimations and unfounded assumptions made by the companies submitting bids in the tender, assumptions regarding the future that are difficult to check, to monitor and to ascertain that they have indeed come to fruition” (AP (Jerusalem) 1077/06 Koach Otzma Ltd. v. Jewish National Fund/Keren Kayemeth Le’Israel [3], per Judge Y. Tzur, at para. 22); or respondent 2’s estimation is based on a future intention regarding the employment of its workers which is inconsistent with the principles of labor law. Regarding such intentions, it has been written that “the tenders committee ought not to confirm [a bid] which is neither ethical nor worthy, in that the [bidder’s] intention to violate the conditions of its workers’ employment is made evident in advance (AP (Nazareth) 117/08 Reshef Security [1993] Ltd v. Afula Municipality [4], per Justice B. Arbel at para. 55). Either way, this bid cannot be deemed legitimate, and in any event it should not have been preferred over the bids tendered by other bidders.

13.  However, it was not only the winning bid that was seriously defective, but also the tender itself. The minimum price set did not take into consideration the additional cost elements and the profit, and in this way, respondent 1 essentially invited the bidders to submit unacceptable bids. Presumably, if the municipality had included, as required, an estimate based on all the cost components of the tender, the tenders committee would have easily noted the defect. This did not happen, and in any event the defect cannot be corrected, even if a different bid had been chosen instead of the winning bid.

In light of this, I suggest that we allow the appeal, and declare the tender to be void, and in any event disqualify the winning bid. I further suggest that we order each of respondents 1 and 2 to pay the appellant’s attorneys’ fees in the amount of NIS 20,000 and to pay to respondents 3 and 4 the amount of NIS 10,000.

 

Justice E. Arbel

I agree.

 

Justice N. Hendel

1.    I agree with the conclusion that my colleague Justice E. Levy has reached, although on a narrower basis.

The phenomenon noted by my colleague Justice E. Levy — a violation of the workers’ rights by the contracting companies, by way of a tender conducted by a public authority — is indeed harsh, and requires correction. The routine dismissal of workers after a short period of time, with the objective of withholding various benefits from such workers, is inconsistent with the function of a public authority. The latter must serve as an example and honor the rights of its workers in practice. The situation must be changed. The issue of which body is responsible for effecting this change — or more precisely, how the task should be divided between the judicial authority and the legislative authority — is a separate question.

The difficulty involved in accepting this appellant's argument is the following: the calculation of the payment for a work-hour used by respondent 2, who won the tender, is based on the assumption that 40% of all workers to be employed in executing the tender project will work for less than one year. This data is found in the pricing sheet of respondent 2’s bid (see page 2 of the corrected calculation). As the material indicates, the one year seniority period has clear financial consequences. Nevertheless, the payment offered by respondent 2 for one work-hour meets the minimum threshold of the tender. Employing workers for more than one year is not a condition of the tender, nor is it a statutory requirement. The question thus arises as to whether accepting the appellant's argument would be an expression of the ideal law, as opposed to the existing law. In other words, do the facts of this case and its circumstances allow for the court to intervene in the tender proceedings? The answer to these questions must be determined according to the reasonableness of the manner in which the authority — respondent 1, the Ashkelon municipality (hereinafter: “the municipality”) — conducted the tender.

2.    In its briefs and in its pleadings, the municipality stresses that the “calculation of the cost of wages to the employer for a work-hour, attached to the bidder’s form as Appendix A . . . has been prepared in accordance with Circular No. 460 (December 2007) of the Director-General of the Center for Local Government, entitled ‘Protection of the Rights of Workers Employed Through Service Contractors’, which provides that the local authorities must implement the Accountant-General’s guidelines when it enters into contractual relationships with service contractors. Attached to the Director-General’s circular is the Accountant-General’s guideline, including the ‘Price Schedule Reflecting the Employer’s Cost per Work-hour with Respect to Cleaning Workers’”. Thus, in establishing a wage per work-hour of NIS 28.64, the municipality acted on the basis of the provisions of the Director-General’s circular. This was the basis for the calculation. However, this amount did not include various additions that the bidder should have taken into consideration, such as: equipment, materials, various expenses, and of course profit.

Despite the above, or more accurately, because of the above, once respondent 2 had tendered a bid that included a work-hour wage of NIS 28.64 — the tender’s minimum requirement — the municipality acted reasonably in its decision to demand that respondent 2 clarify that part of the calculation. This was also necessary in order to ascertain that the bid was not a deficit bid. Respondent 2 and an additional bidder were invited to appear before the tenders committee. This clarification process was not formal of course, but was instead directed at checking the matter in a substantive manner. The municipality acted in a similar fashion in deciding not to accept the first calculation presented by respondent 2. Under the circumstances of the case, the municipality acted correctly when it allowed respondent 2 to present an additional calculation. However, this calculation made clear that respondent 2 had assumed that 40% of the workers would not be employed for more than one year.

3.    Given the municipality’s public function, the explanation provided should have set off a warning bell. A public authority is not subject to the same rule as a private business. The authority is bound by public norms; it is a normative body. Profit is of less importance vis-à-vis the objectives and trends that it must adopt and promote. When the data were presented, it became clear that respondent 2 intended to limit the seniority of the workers who would be hired, such that some of them would work for less than one year and some (20%) would work for even less than half a year (a period which also has a certain significance). This result is incompatible with the public authority’s duty to the public. It is not even consistent with the Director-General’s circular. It is a calculation which can adversely affect almost one half of the potential workers. In light of this, it should be noted that the contract period, according to the tender, is two years, with an option to continue for an additional two years.

This point became clear through a discussion of the matter before the tenders committee. I do not wish to establish a general duty or quasi-duty regarding the employment of workers for a particular period of time. In the context of this case, it is sufficient to point to the original sin of this particular tender process. It is true that the municipality established a work-hour wage based on the provisions of the Director-General’s circular, which also referred to an increased wage based on seniority. However, it adopted the wage as it was presented in that circular, without taking into consideration the fact that the winner of this tender would be required to make additional payments for various expenses. Thus, a situation developed in which the municipality made it possible, through the tender, for bidders to bid unrealistic offers that could only be realized through a contraction of the workers’ conditions. This result, on its face, is unreasonable and contravenes the mandate given to the public authority to conduct its affairs. The obvious conclusion is therefore that the tender must be nullified.

4. In summation, I concur, as stated, in the result reached by my colleague, Justice E.E. Levy.

 

Decided as per Justice E.E. Levy.

 

26 Tammuz 5770

8 July 2010

 

Bar-Ilan University v. National Labor Court

Case/docket number: 
HCJ 1181/03
Date Decided: 
Thursday, April 28, 2011
Decision Type: 
Original
Voting Justices: 
Primary Author
majority opinion
majority opinion
Author
concurrence
Author
concurrence
majority opinion
majority opinion
majority opinion
Introduction to the full text: 

The questions that arise for deliberation in this Petition are: Is a workers’ organization, some of whose members are pensioners of the workplace, entitled to declare a strike against the employer on the issue of the pensioners’ rights, although an employer-employee relationship no longer exists between the employer and the pensioners? Should such a strike be recognized as one that is protected by the labor laws?

What remains of a concrete labor dispute, which was resolved during the deliberations before the National Labor Court, are these conceptual-fundamental questions, which, in light of their importance, have constituted a subject of rulings by the various instances of the Labor Courts and also the subject of a petition before this Court?

Full text of the opinion: 

The Supreme Court sitting as the High Court of Justice

 

 

HCJ 1181/03

 

Before: The Honorable President D. Beinisch

                The Honorable Vice-President E. Rivlin

                The Honorable Justice Emeritus A. Procaccia

                The Honorable Justice E.E. Levy

                The Honorable Justice A. Grunis

                The Honorable Justice M. Naor

                The Honorable Justice E. Arbel

 

Petitioner:          Bar Ilan University

 

 

                v.

 

Respondents:    1. National Labor Court

2. Organization of Senior Academic Faculty Members of Bar Ilan University

3. New General Federation of Labor [Histadrut]

4. Organization of Senior Academic Faculty Members of the Hebrew University of Jerusalem

5. Organization of Senior Academic Faculty Members of the Technion – Israel Institute of Technology

6. Organization of Senior Academic Faculty Members of Tel Aviv University

7. Organization of Senior Academic Faculty Members of Haifa University

8. Organization of Senior Academic Faculty Members of Ben Gurion University of the Negev

9. Organization of Senior Academic Faculty Members of the Weizmann Institute of Science

10. Manufacturers Association of Israel

11. The Attorney General

               

                Petition to grant an order nisi

 

Date of hearing:                              

On behalf of the petitioner:        Haim Berenson, attorney at law; Assaf Berenson, attorney at law

On behalf of Respondent 2 and Respondents 4-9:            Orna Lin, attorney at law; Orit Zilony, attorney at law; Sharon Lulachi, attorney at law

On behalf of Respondent 3:        Dorit Tenne Perchik, attorney at law

On behalf of Respondent 10:      Ofer Yohananoff, attorney at law

On behalf of Respondent 11:      Nurit Elshtein, attorney at law

 

 

Judgment

 

 

Justice Emeritus A. Procaccia:

 

 

                The questions that arise for deliberation in this Petition are: Is a workers’ organization, some of whose members are pensioners of the workplace, entitled to declare a strike against the employer on the issue of the pensioners’ rights, although an employer-employee relationship no longer exists between the employer and the pensioners? Should such a strike be recognized as one that is protected by the labor laws?

 

                What remains of a concrete labor dispute, which was resolved during the deliberations before the National Labor Court, are these conceptual-fundamental questions, which, in light of their importance, have constituted a subject of rulings by the various instances of the Labor Courts and also the subject of a petition before this Court?

 

The background

 

1.            The Organization of Senior Academic Faculty Members of Bar Ilan University (hereinafter: the University) is a representative organization of workers, whose members are the senior academic faculty members of the University and also pensioners of the senior academic faculty (hereinafter: the Workers’ Organization or the Organization). During the period relevant to the dispute, the employer-employee relationship between the University and the Workers’ Organization was governed by a special collective agreement dated December 6, 1998, which remained in effect until September 30, 1999. The agreement continued to apply even after that date, by virtue of Section 13 of the Collective Agreements Law, 5717-1957 (hereinafter: the Collective Agreements Law).

 

2.            The pensioners of the University have been insured since 1959 by the Gilad Comprehensive Pension Fund, which is an external contributory pension fund. An agreement that was signed in 1988 between the University and the Workers’ Organization stated that the pension should be linked to the Consumer Price Index, although, during the period that preceded the agreement, the pension had been linked to the salaries of the active faculty members. In the salary agreements for the years 1993-1996, the active faculty members received significant salary increments, at the rate of 14%. The senior faculty pensioners did not receive the said salary increments, because their pensions were linked to the Consumer Price Index, as stated above. On that basis, the Workers’ Organization demanded that the University grant a pension increment of 14% to the academic faculty pensioners as well.

 

3.            On October 7, 1999, the Workers’ Organization gave the University notice of a labor dispute and a strike, pursuant to Sections 5 and 5A of the Settlement of Labor Disputes Law, 5717-1957 (hereinafter: the Settlement of Labor Disputes Law). The main issue of the dispute was the Organization’s demand for the payment of a 14% increment to the pensions of the pensioners. The University was also required to improve the pensioners’ rights to the Pensioners’ Research Fund.

 

4.            Pursuant to the notice by the Organization, the University petitioned the Regional Labor Court of Tel Aviv-Jaffa with a petition by a party to the proceeding to hear a collective dispute and with a motion for temporary remedies in order to prevent the strike. The University claimed that the Workers’ Organization could not declare a labor dispute and a strike, based on a cause pertaining to the improvement of the pensioners’ retirement conditions. On November 7, 1999, the parties filed a joint motion to terminate the proceedings in the collective dispute, and the Organization announced the cancellation of the notices that it had given with respect to the labor dispute and the strike. This joint notice was given the validity of a court judgment.

 

5.            On February 17, 2000, the Organization gave the University a second notice of a labor dispute and a strike, under the Settlement of Labor Disputes Law.  The notice, stated that the subject of the dispute was “Terms of payment of the compensation for the academic grants increment to pensioners of the Faculty Organization.” On the same day, a general meeting of the Workers’ Organization was held, during which it was decided, inter alia, as follows:

 

1. The meeting of the senior academic faculty resolves to insist upon a claim for the immediate and unconditional payment of the 14% increment to the pensioners.

...

3. The meeting charges the Workers’ Organization Committee with bringing before the next meeting, which will be convened as soon as possible, a draft resolution on implementing organizational measures, including a lockout, if the increment is not paid to the pensioners immediately and unconditionally....

 

Approximately two weeks later, on March 1, 2000, an additional general meeting of the Organization was held, during which it was decided that:

 

In the absence of the 14% payment to the pensioners, the general meeting empowers the Committee to immediately adopt the required measures, sanctions and strike, pursuant to the resolutions by the Committee, until the aforementioned payment is made.

 

6.            Following that resolution, on March 6, 2000, the Organization gave a third notice of a labor dispute and a strike. The matters in dispute were defined as follows:

 

In the matter of determining rights that arise from an employer-employee relationship, in providing payment for academic grants to members of the faculty who have retired and will retire in the future, and stipulating  conditions for making payment in an unreasonable and discriminatory manner.

 

7.            Negotiations that were conducted by the parties on the subject of the dispute succeeded and, ultimately, the strike was averted. On April 9, 2000, an agreement was signed by the parties and was submitted for registration as a collective agreement. In this manner, the dispute was resolved.

 

The proceeding before the Regional Labor Court

 

8.            Following the last notice given by the Organization regarding the labor dispute, and before the collective agreement governing the dispute was signed, on March 12, 2000 the University petitioned the Regional Labor Court for declaratory relief that would state that the Workers’ Organization was not entitled to declare a labor dispute based on a cause pertaining to improving the retirement conditions of the university’s pensioners and, in particular,  was not entitled to declare a strike in that context. The signing of the collective agreement, which brought the dispute to an end, did not lead to the cancellation of the proceeding before the Labor Court, and the University sought to continue it, to allow for fundamental decisions on the questions that had arisen regarding the right of a workers’ organization to declare a labor dispute and a strike based on matters related to pensioners of the workplace. The Workers’ Organization, for its part, claimed that the question that had been raised for deliberation was theoretical, since an agreement had been reached and, therefore there is no need for the Court to deliberate the question. The Court rejected the argument made by the Organization and decided to hear the University’s petition on the merits, in light of the fundamental nature of the issue, and due to the fact that the issue is one that arises frequently and therefore  justifies the issuance of a leading decision for the various systems.

 

9.            The judgment of the Regional Labor Court focused on the legal question of whether a workers’ organization is entitled to declare a strike on the issue of pensioners’ rights. The Court (Judge Wirth-Livne and representatives of the public, Messrs. Dorscht and Mutai) responded in the negative and ruled that a workers’ organization is not entitled to declare a strike that focuses on the subject of determining the rights of pensioners who had retired from the workplace.

 

10.          In its ruling, the Regional Court  did not deny the power of the organization to represent pensioners, as part of the freedom of association granted to them, or recognition of the organization‘s status as representing their affairs as well. Yet, according to the Court, the question is what is the meaning of the organization’s representation of pensioners’ affairs, and does this representation also extend to the right to declare a strike for the purpose of promoting their affairs?. According to the Court, as a general rule, a workers’ organization is entitled, within the limits of the law, to declare a strike to achieve objectives in the realm of labor relations and in the realm of the working conditions of the active workers who are members of the organization. The same does not apply to pensioners. Upon their retirement from the workplace, the employer-employee relationship between the employer and the retirees is severed and the retirees’ rights are determined by the articles of association of the pension fund of which they are members, or by another legal arrangement that applies to them. Even if a collective agreement is signed with regard to the pensioners, it will not constitute a “collective agreement,” as this term is used in legislation, because it does not deal with “working conditions” or a “labor relationship,” as these terms are defined in Section 1 of the Collective Agreements Law. A collective agreement is intended to serve as a substitute for an individual employment contract that governs a “labor relationship,” while a contractual relationship between parties with no employer-employee relationship is not considered a “labor relationship” in the generally accepted legal sense. Pensioners are also not “workers” and, accordingly, the improvement of their retirement conditions is not a matter encompassed by the terms “working conditions” or  “labor relationship.” Even if a collective agreement may apply to workers at the time of their retirement, it cannot determine rights and duties for workers who retired before the agreement went into effect. Therefore, the issue of pensioners’ rights does not constitute a legitimate cause for a strike recognized under labor law, which aims to achieve objectives in the realm of labor relations and the working conditions of the active workers. The Court further held that the argument that a strike on behalf of pensioners’ affairs can be considered a “sympathy strike,” must be rejected. A sympathy strike is recognized by law, insofar as it constitutes a strike by workers to support the professional struggle of other workers, and provided that it takes place in support of a primary strike, which is recognized as a protected strike. A sympathy strike also requires the element of a professional struggle of “workers,” and that element does not exist in the case at hand; Moreover, no “primary strike” exists in this case. In addition, from the standpoint of proper policy, the Court ruled that it was not appropriate to recognize the power of an organization to strike on matters pertaining to pensioners. Granting such power may not only improve the pensioners’ status, but also work to their disadvantage in certain situations, thus detracting from their rights. In light of all the above, the Regional Court ruled that the Organization was not entitled to declare a strike that focused on determining the rights of the University’s pensioners.

 

                The Organization appealed that ruling to the National Labor Court.

 

The judgment of the National Labor Court

 

11.          The National Labor Court, in a judgment written by President Adler, with which Vice-President Barak, Judge Arad, the employees’ representative Mr. Harpaz, and the employers’ representative Mr. Liav all concurred, allowed the appeal and ruled that a workers’ organization, whose members include pensioners of the workplace, is entitled to declare a labor dispute and a strike, as part of its efforts to improve the pensioners’ retirement conditions .

 

12.          In its opening remarks, the Court noted that, as a general rule, a theoretical petition that does not require a decision for the purpose of resolving a pending concrete dispute should not be adjudicated. Yet, given that the ruling of the Regional Labor Court had been handed down and that it expressed a position on a fundamental matter that had not been previously adjudicated by the Courts, it is fitting and proper to adjudicate the matter and to establish case law with regard to the issue, especially as it concerns a substantive question related to an important right – the right to strike.

 

13.          In considering the case on the merits, the National Labor Court classified the question in dispute regarding the scope of the pensioners’ representation by the workers’ organization. It ruled that, in light of case law and in view of the labor relations currently prevailing in Israel’s economy, a workers’ organization is entitled to include pensioners among its members and to represent them; such an organization is entitled to conduct negotiations to promote the rights of the pensioners of the relevant institution; and a collective agreement can grant rights to pensioners. The question, according to the Court, was whether a workers’ organization has the right to declare a strike as part of negotiations to promote the pensioners’ issues. According to the Court, because pensioners may be included among the members of a workers’ organization and the organization is entitled to represent them, the organization, in any case, has the power to conduct negotiations to improve their conditions, as they belong to it. The question is whether a strike that is declared by the organization, within the framework of a labor dispute, which concerns only the pensioners’ rights, is likely to be considered a protected strike that benefits from special protections under the law.

 

14.          In the opinion of the Court, although the provisions of the Collective Agreements Law and the Settlement of Labor Disputes Law refer to “workers,” “working conditions” and “labor relations,” and contain no direct and explicit reference to pensioners, the purpose of these laws, when interpreted in the circumstances of the current reality, indicates that a workers’ organization is entitled to strike for the sake of its pensioners, and that such a strike is protected under law. The Labor Court pointed out the close relationship between the pensioners and the workplace in the organized sector. It noted that, with regard to the representation of workers and pensioners, there is a pertinent continuity between the period of the workers’ employment in the workplace and the period of their retirement; this is especially true of a university, since pensioners continue to lecture, to perform research, and to publish articles and studies in the areas of the university, in which they acknowledge their relationship with the academic institution. Furthermore, there are pensioners who use the continuing education fund of the university’s faculty members. The Court further ruled that, although the principal role of a workers’ organization is to represent the active workers and to take measures for the improvement of their working conditions, this role also includes concern for the workers’ retirement conditions and concern for the workers after they retire.

 

15.          The National Labor Court examined the legislation relevant to the matter and reached the conclusion that it does negate the position that a workers’ organization can declare a strike with regard to the rights of the pensioners who are among its members. As for the Collective Agreements Law, the Court referred to the definitions that appear in Sections 1, 15 and 19 of the Law, which include terms such as “worker” and “working conditions” in the context of the collective agreement and which imply, prima facie, that such an agreement applies to anyone who maintains an employer-employee relationship with his employer, and does not apply to anyone for whom the labor relations with his employer have ended. Nonetheless, the Court ruled that this Law should be interpreted according to its purpose, and according to the reality of life prevailing at present. Thus, it should be determined that the concept of “working conditions,” which appears in the definition of a collective agreement in Section 1 of the Law, is broad in scope and also includes retirement rights and pension terms of the workers in the workplace; the term “labor relations” in the same provision also includes the affairs of workers who have retired, while the subject of pensioners’ rights in the pension fund is considered part of the labor relations, and the Court has the jurisdiction to adjudicate it. The phrase “all the workers of the types included in the agreement,” in the definition of the scope of the special collective agreement in Section 15 of the Law, also includes pensioners. It was ruled that, in general, the definition of the subjects that can be governed by a collective agreement extends, in the pertinent sense, to the affairs of pensioners as well, and case law has already established that a condition in a collective agreement that grants rights to pensioners is valid. In light of the above, the Court concluded that, within the definition of the collective agreement, the Collective Agreements Law also includes, inter alia, an agreement that specifies the retirement conditions for the workers, and that the workers’ organizations continue to represent the workers even after they have retired. Indeed, the Court emphasized that this does not transform a pensioner into someone who holds the same status as a worker for all intents and purposes, but he should be deemed as such for the purposes of his representation by the organization in matters resulting from his having been a worker in the past, and especially for the purposes of his representation with respect to the terms of his retirement.

 

                The Court ruled that Section 2 of the Settlement of Labor Disputes Law should be considered in the same spirit. Since pensioners’ rights may constitute the subject of a collective agreement under this provision of the Law, they may also constitute the subject of a labor dispute in any case. While the dispute itself is between the employer and its workers, who are represented by the organization, the subject of the dispute may, nonetheless, focus on the retirement conditions of the pensioners. The Court clarified that its fundamental ruling refers to a situation in which the workers’ organization represents pensioners who are among its members, along with its members who are active workers, and does not refer to a situation in which a separate and independent pensioners’ organization wishes to negotiate with the employer with respect to the pensioners’ retirement conditions.

 

16.          As for the concrete matter of the relations between the University and the Workers’ Organization, it was ruled that the pensioners of the institution continued to be members of the organization in practice, and that a close relationship between them and the University was maintained; the articles of association of the Organization enable the inclusion of pensioners among its members. Among the purposes of the Organization is representing pensioners, including in matters relating to pensions and continuing education funds. In practical terms, the Organization conducts negotiations and signs collective agreements on matters pertaining to the pensioners. Accordingly, the Organization was entitled to declare a strike for the benefit of the pensioners among its members. The Court further emphasized that the proper policy is to extend broad protection over citizen-pensioners, and to enable the workers’ organization, where it exists and acts, to represent pensioners and, in so doing, to declare a strike for the purpose of promoting their rights. Insofar as a workers’ organization can represent pensioners, conduct collective negotiations on their behalf and sign collective agreements that include provisions relevant to pensioners, its right to declare a workers’ strike on subjects pertinent to pensioners may be assumed, since, after all, striking is an integral part of the collective negotiation process, and without the power to strike as a means of conducting negotiations, the organization’s power and status would be considerably weakened. Furthermore, the right to strike is anchored in the constitutional right to freedom of association, and the negation of that right is tantamount to a prohibited limitation of the freedom of association. The right to strike, which exists within the framework of collective negotiations, expresses the right of groups to promote their interests, as part of the processes of social change that take place in the state. Denying the right to strike is also liable to violate the human right to live with dignity, since “a pensioner’s constitutional right to human dignity is meaningless if he has no way to protect his income” (paragraph 26 of the ruling). These were the reasons underlying the position of the National Labor Court with regard to the power of a workers’ organization to declare a strike for the purpose of promoting the affairs of the pensioners among its members.

 

17.          Against the background of the aforementioned rulings, the National Labor Court allowed the appeal and ruled that, under the circumstances of this case, the Workers’ Organization was entitled to declare a labor dispute with the University as well as  a strike, as part of its efforts to obtain better retirement conditions for the pensioners of the academic faculty.

 

The proceeding before the High Court of Justice

 

18.          The University filed a petition with this Court, sitting as the High Court of Justice. After a first hearing of the petition before a panel of three, an order nisi was issued and organizations of senior academic faculty members of additional institutions of higher education in Israel – the Hebrew University of Jerusalem, the Technion – Israel Institute of Technology, Tel Aviv University, Haifa University, Ben Gurion University of the Negev and the Weizmann Institute of Science (hereinafter jointly, together with the Organization: the Academic Faculty Organizations) – were joinder to the proceeding. Also added to the proceeding were the New General Federation of Labor [the Histadrut] – as the largest representative workers’ organization in the state (hereinafter: the Histadrut), and the Manufacturers’ Association of Israel – as the largest employers’ organization in the state in the business sector (hereinafter: the Manufacturers’ Association). The attorney general also announced that he would participate in the hearing of the proceeding. At a later stage, it was decided to expand the bench.

 

The arguments in the petition

 

The arguments of the Petitioner

 

19.          According to the Petitioner, it is not appropriate to recognize the power of workers’ organizations to exert economic pressure on an employer to accede to economic demands for improving pensioners’ rights. This is primarily because the labor relations between the pensioners and their employers were severed, and the pensioners’ retirement rights were established prior to the date of their retirement.

                According to the Petitioner, the Court deviated from the generally accepted rules of interpretation of the relevant pieces of legislation in order to achieve a social purpose, and it did so in an improper way, which was not the way that was paved for this purpose – the way of legislation. It argued that there is a need to return to the proper boundaries of the recognized strike, which is intended for a legitimate labor dispute and not for a pension dispute; there is a need to refrain from expanding the pensioners’ right of representation by the Workers’ Organization, and from recognizing the authority of the Workers’ Organization to conduct negotiations, to sign a collective agreement and to declare a labor dispute that changes the vested rights of the pensioners, for better or for worse. The Petitioner’s position is that the judgment by the National Labor Court changed the existing balances with respect to the  protected freedom of strike, thereby causing great harm to the University, the students, and perhaps even to the pensioners themselves. Recognition of the pensioners’ right of representation by the Organization also amounts to the preferential treatment of pensioners, relative to other groups in society that do not have the privilege of being similarly represented.

 

20.          It was further argued that the Court did not examine the factual foundation pertinent to the matter that was brought before it, and made unsubstantiated factual assumptions. It created a legal, economic, social and political revolution, which increases the damage done by strikes, which do harm to Israeli society. The Petitioner went on to argue that a difficulty had arisen in applying the “principle of representation”: it is not clear how to determine the question of which pensioners would be entitled to be included in the represented group, how the collective agreement would be applied to pensioners, how the expansion orders would be applied to pensioners, and what would be determined regarding the deduction of pensioners membership fees and handling fees that are paid to a representative workers’ organization, when the Wage Protection Law, 5718-1958, allows such deductions only from workers and only from wages. Instead of permitting a solidarity strike by active workers for the benefit of pensioners, which renders the strikers immune to liability for the damages that will be sustained by the strike victims, it would have been proper to examine alternative ways of achieving the desired goals, such as exercising the active workers’ legitimate right to strike for the gradual improvement of their own retirement conditions when they become pensioners; utilization of workers’ and citizens’ rights of freedom of expression and freedom of civil protest on behalf of pensioners, but without using the right to strike; and promotion of social legislation in the Knesset. The Petitioner argued that the Court erred in interpreting collective agreements as applying to pensioners, notwithstanding the severing of the labor relations between them and the employer. According to the Petitioner, while a collective agreement can refer to the future pension rights of active workers, it cannot create new economic rights for pensioners after they cease to be workers. The expressions “labor relations” and “working conditions” in Section 1 of the Collective Agreements Law also refer to collective labor relations, and to the working conditions of workers, which, by their very nature, cannot apply to the conditions of pensioners after their retirement. No indirect approval should be given for a “sympathy strike,” which is recognized under Israeli law as a mere exception and is limited to a strike by workers as a sign of their identification with other workers who are embroiled in a labor dispute with an employer. It was claimed that the Court also erred in applying the Settlement of Labor Disputes Law to this matter.

 

                The Petitioner further argued that the improvement or reduction of the existing legal rights of pensioners and senior citizens is a matter for the legislator and is not part of labor law, and, in any event, the judiciary branch must exercise restraint when intervening in a matter of this type. The Petitioner further noted that, when an arrangement for the involvement of a representative organization in the rights of civil service pensioners was required, a special legislative arrangement was established for that purpose in the Civil Service Law (Pensions) [Combined Version], 5730-1970 (Sections 1 and 103-104); in addition, the bill, Basic Law: Social Rights, which defined the right to strike as a constitutional right, also limited that right to active workers, in contrast to pensioners.

 

21.          The Petitioner emphasized that the interpretation that was given to the right to strike in matters pertaining to pensioners detracts from the balance required for delimiting the right to strike as a relative basic right. Granting protection to strikers against contractual or tortious claims requires restraint and strict interpretation  of the applicability of the right to strike, which is protected under labor law for active workers only, within the framework of a labor dispute in which they are involved. The expansive interpretation of the right to strike is liable to open the way for encompassing other weak groups within society, which are not composed of “workers,” within the circle for which a protected sympathy strike could be conducted through a workers’ organization. This is not the proper way to improve the status of various groups that do not hold the status of “workers,” and permitting this, in practical terms, is equivalent to recognizing a prohibited sociopolitical strike, which is likely to cause irreparable damage. It was further argued that the risk that the Workers’ Organization, in representing the pensioners, would not act only for their benefit, but also to their detriment, has not been taken into account. It was finally argued that, in the case before us, the classification of the Organization as a representative workers’ organization is doubtful, because the membership of faculty members in the Organization is automatic and even depends on the employer and, as such, it does not comply with the conditions required for voluntary membership in a workers’ organization. The pensioners’ membership in the Organization is a “disabled” membership, since, pursuant to the articles of association, they cannot exert a real influence on the Organization’s decisions.

 

22.          In summary, it was argued that the requirements of justice, from both the general and the individual standpoint, require judiciary intervention in the ruling handed down by the National Labor Court. The ruling violates the property rights of employers and the legitimate interest of their expectations; it involves severe harm to the entire Israeli public, and especially to the university.

 

The arguments of the Academic Faculty Organizations

 

23.          The Academic Faculty Organizations argued that the determinations made in the National Labor Court judgment should be adopted, as they are compatible with the existing legal framework, and the developments that have taken place in Israel’s labor economy over the years. The Workers’ Organization of the University represents mainly active workers, but its members also include pensioners, who are former workers of the University. Over a period of many years, the Organization has handled the affairs of the pensioners, who have maintained constant contact and a close affinity with their employer even after their retirement. It has acted simultaneously to promote  the rights of active workers who had not yet become pensioners and to promote the retirement and pension terms of those who had formerly been active workers. According to their argument, there was nothing new in the judgment’s ruling that pensioners are entitled to organize within the framework of an existing representative workers’ organization, and that a collective agreement may include provisions related to the retirement and pension terms of pensioners. The right to organize includes the right to conduct collective negotiations and the power to take various organizational measures, including the measure of striking, in order to promote the objectives that the organization wishes to achieve. The definition of the term “strike” is dynamic. No binding definition has been attached to it under the law, and its content may change according to the state of Israel’s  economy and society. The various concepts in the relevant items of labor legislation – “worker,” “working conditions” and “labor relations” – should also be dynamically interpreted in accordance with the purposes of the legislation. Therefore, it is reasonable and correct to interpret them as governing the retirement conditions as well, so that a pensioner may be considered a “worker” for the purposes of the conditions required for a collective agreement, and for the purposes of the ancillary matters governed by the Collective Agreement Law. The definition of a “labor dispute” in Section 2 of the Settlement of Labor Disputes Law may also include matters that are related to the retirement conditions  of pensioners, whose affairs are represented by the workers’ organization vis-à-vis the employer.

 

24.          The Academic Faculty Organizations added that this case involves a classic economic strike and not a sympathy strike, but that, insofar as sympathy strikes are recognized in Israel, it is a fortiori necessary to recognize a strike by workers, who will become pensioners when the time comes, based on the cause of harm to people who were formerly workers of the same institution and who, after retiring, remained members of the Workers’ Organization. They claimed that the Petitioner’s argument about the risk of the Organization violating the pensioners’ rights was also not appropriate. It has already been established that the abrogation of pensioners’ rights by virtue of a subsequent collective agreement would only be valid with regard to pensioners who retired from their work after, and not before, the date on which the agreement took effect. Furthermore, the Organization has a duty of proper representation vis-à-vis its members, including the pensioners among them. The fact that the Organization does not have the power to violate the pensioners’ rights cannot lead to the conclusion that it has no power to act in their favor through the use of its organizational strength. The reality of the labor market and the developments that have taken place in the field of labor relations in the last decades emphasize the potential risk of violating pensioners’ rights and the need to represent their affairs vis-à-vis the employer even after their retirement. Corroboration for this recognition can be found in the close partnership that exists between the Workers’ Organization and the pensioners and their rights. Finally, it was claimed that the Petitioner’s argument about the doubt as to the representative nature of the Organization in the matter before us is not appropriate, in light of the factual and legal infrastructure that was established, and the dozens of collective agreements that were signed between the Parties, all of which are inconsistent with this argument.

 

The arguments of the Histadrut

 

25.          The Histadrut concurred with the position of the Organization. According to the Histadrut, it would have been appropriate, a priori, to deny the petition before this Court as being theoretical in nature. In any event, the judgment that is the subject of the petition does not have the important lateral implications that people are attempting to attribute to it: the rights in question are not those of “senior citizens” as a whole, but rather, of the pensioners of the Workers’ Organization alone. The judgment contains no general assertions with regard to senior citizens and other population groups within society. The pensioners who are members of the Organization have a special affinity to the Organization, and this is the source of their uniqueness; this applies a fortiori in the matter before us, because, unlike senior citizens and other population groups, which are entitled to certain rights by virtue of general constitutional principles, the pensioners’ rights result from a prior contractual relationship between them and the employer. The ruling by the Court in this case has an especially narrow field of application, also because parts of it rely on the special facts of the case and, inter alia, on the fact that the employer in this case, as a matter of fact, customarily negotiated with the Workers’ Organization with regard to pensioners. At the legal level as well, this is not a legal precedent, because the right to strike in favor of pensioners derives from the right to associate, and this right is well anchored in law and case law. There is no practical meaning to the right to associate without the possibility of exercising that right, inter alia, by striking. Support for the position adopted by the National Labor Court can also be found in international law. Thus, for example, the International Labor Organization Convention (No. 87) on Freedom of Association and Protection of the Right to Organize (hereinafter: the Convention on Freedom of Association and Protection of the Right to Organize) establishes that a workers’ organization is entitled to determine the content of its articles of association without governmental intervention. On this basis, the Histadrut concluded that a workers’ organization may also determine that it will take measures to represent the pensioners’ affairs. According to the Histadrut, the position of Israeli law is consistent with the position of international law, which, in the opinion of the Histadrut, tends to expand the objectives of the workers’ organization and the right to strike. It was further argued that the right to strike should not be limited to the definition of “labor relations” in to the Collective Agreements Law or the Settlement of Labor Disputes Law. There is no inevitable connection between the ability to sign a collective agreement and the right to strike. The right to strike is a basic right that should not be limited unnecessarily, and the legislation with regard to collective agreements and the resolution of labor disputes should not be interpreted in a manner that will restrict its scope. A purposive interpretation of the term “employee” in labor legislation may justify an expansive interpretation, which includes a pensioner, inter alia, for the purpose of exercising the right to strike. Finally, it was argued that the position of the National Labor Court is in line with the current reality. In contrast to the state’s argument that it is not possible to establish conditions in a collective agreement with regard to people who had already retired from their work prior to its formulation, the state, in actual fact, signs collective agreements that govern the affairs of pensioners after their retirement – and examples of these agreements were cited. The Histadrut ended its arguments by stating that, in its capacity as a workers’ organization, it encompasses both active workers and those who have retired from work but continue to be included among its members. The Organization looks after the entire professional life of the workers, both during their active work and thereafter, and all of the workers’ rights, including pension rights, are determined with a direct connection to the period of their work.

 

The arguments of the Manufacturers’ Association

 

26.          The Manufacturers’ Association concurred with most of the Petitioner’s arguments. It argued that the right to strike was expanded in the judgment, which is the subject of the petition, beyond its proper dimensions with regard to pensioners who have retired and no longer have the status of workers. No proper balance was made between the employers’ proprietary right, which is protected in the Basic Laws, and the workers’ right to strike. This expansive approach is likely to encourage strikes that cause great damage to employers and the society as a whole. In addition, a workers’ organization that generally represents the active workers is liable to become embroiled in a conflict of interest if the causes for striking are expanded to include causes that concern pensioners’ rights. It was further argued that recognizing the Organization’s power to change pensioners’ rights after they have retired is also liable to harm the pensioners and cause them damage in the future. Accordingly, the position adopted by the Manufacturers’ Association is that the judgment that is the subject of the petition should be overturned.

 

The position of the attorney general

 

27.          The attorney general, who appeared before the Court, claims that it was not appropriate to adopt the National Labor Court ruling, whereby a workers’ organization is entitled to declare a protected strike for the purpose of promoting the affairs of the pensioners among its members.

 

                According to him, the position adopted by the Labor Court expands the status of pensioners to that of “quasi-workers” and such a position finds no support in law or in the basic principles of the system, both of which see fit to distinguish between a person who is a worker and one who is not. According to the judgment that is the subject of the petition, the status of “quasi-employee” is a significant one, because, by virtue of that status, it is possible, inter alia, to declare a strike. However, the scope, the essence, and primarily the boundaries of this status are not defined in the judgment. Workers need the power to strike to adapt the employment contract to the changing circumstances of life. Pensioners, on the other hand, have rights that are vested in them. There is no need to adapt those rights to the changing reality and  the force of those rights results from their fixed, vested nature.

 

28.          According to the position adopted by the attorney general, a workers’ organization cannot properly represent the affairs of pensioners. First, from a conceptual standpoint, a workers’ organization, as defined in HCJ 7029/95, New General Federation of Labor v. National Labor Court, IsrSC 51 (2) 63 (1997) (hereinafter: the Amit Case), is an organization in which the members are workers whose membership is voluntary, for the purpose of promoting their employment conditions within the framework of a collective agreement. These characteristics do not exist with regard to pensioners. Hence, for the purpose of recognizing a workers’ organization as an entity capable of promoting pensioners’ affairs, a legislative amendment of the labor laws is required. As long as no such amendment has been made, the Organization’s activities to improve the pensioners’ conditions constitute social welfare activities, which are external to labor law. Therefore, from the conceptual standpoint, it is not appropriate to speak of a workers’ organization that acts for the benefit of pensioners. Second, membership in a workers’ organization and competence to enter into collective agreements both mean that the workers’ organization could also detract from pensioners’ rights, and not only benefit them. This is liable to give rise to an inherent conflict of interest in the operation of the workers’ organization, between the rights of active workers and those of pensioners. Third, “employment conditions” in a collective agreement may, indeed, include retirement conditions, but only insofar as those terms concern workers who have not yet retired, in contrast to those who retired previously. In the absence of working relations between the employer and the pensioner, and in the absence of an employment contract between them, no provisions of a collective agreement, which confer “individual” normative validity with regard to pensioners, can exist. Fourth, the legitimacy of the strike is contingent upon its purpose being the improvement of workers’ conditions, in contrast to promoting the interests of other groups, the nature of which the Labor Court did not clarify. In failing to do so, the Labor Court created too wide an opening, and the outcome of its action cannot be predicted. The  ruling by the Labor Court approaches, in essence, a complete recognition of the right to hold a sympathy strike, which, to date, has been recognized under Israeli law only in an extremely limited way. According to the existing legal situation, the strike by the Organization cannot be considered a “sympathy strike,” because the latter is limited to a sympathy strike by “workers” with regard to other “workers” who are embroiled in a labor dispute. It was further argued that the Labor Court did not properly distinguish between a budgetary pension and a contributory pension. In this case, which involves contributory pension insurance, the pensioners’ adversary is not the University but, rather, the pension fund alone. In the attorney general’s opinion, solutions for the aforementioned difficulties faced by the pensioners must be found in other ways, such as the establishment of an independent pensioners’ organization or holding protest rallies or consumer strikes. Expanding the applicability of the concepts of “strike,” “worker,” “collective agreement” and “collective dispute” to pensioners, as done by the Labor Court, deviates from the purpose of the legislation and from the foundations of the legal system. It cannot be accomplished without the intervention of the legislators; it endangers the existing protection of the basic concepts and basic interests of labor law. In light of all of the above, it was argued that the obvious legal error in the National Labor Court ruling justifies the intervention of this Court in order to change it.

 

Decision

 

29.          The petition confronts this Court with the question of whether a workers’ organization has the power to declare a strike that will be protected under law, in a matter intended to promote the rights of the pensioners among its members. The answer to this question involves the examination of various issues that pertain to the status of pensioners relative to the workplace from which they retired: their status relative to the workers’ organization that represents the active workers in the workplace; the extent of the pensioners’ ability to belong to that organization; the scope of the organization’s power to represent the pensioners among its members, to take action to improve their social benefits, and to engage in a collective agreement for that purpose; and finally, the question of whether, within the framework of collective negotiations, a workers’ organization is entitled to declare a strike that is intended to promote the rights of the pensioners among its members, which will be protected under law. Against the background of the emerging issue and its various complexities, we will first address the argument that was raised, according to which the proceeding does not justify decision on the merits, because the case is of a purely theoretical-academic nature.

 

A theoretical petition

 

30.          A rule that has been adopted by this Court is that it does not customarily address itself to petitions of a theoretical nature (HCJ 5095/07, Israel Law Center v. MK Peres (unpublished, June 12, 2007); HCJ 967/07, A. v. National Insurance Institute (unpublished, April 29, 2007); HCJ 3206/06, Typhoon Contractors Ltd. v. Minister of Construction and Housing (unpublished, October 23, 2006); HCJ 1853/02, Nawi v. Minister of Energy and National Infrastructures (unpublished, October 8, 2003); HCJ 10026/04, Poalim IBI Underwriting and Issues Ltd. v. Antitrust Commissioner (unpublished, February 6, 2005); and in civil matters, see e.g.: CA 7175/98, National Insurance Institute v. Bar Maimon Ltd. (in liquidation) (unpublished, December 17, 2001)). A theoretical petition is defined as a petition that is not required for the resolution of a sustainable dispute at the time it is heard. It is not based on a specific set of facts and does not involve a petition for a concrete remedy; rather, it raises a legal question of a general nature, with no close relationship to the circumstances of a specific case (HCJ 6055/95, Tzemach v. Minister of Defense, IsrSC 53 (5) 241, 249 (1999) (hereinafter: the Tzemach Case)). As a general rule, a decision on a theoretical petition is not consistent with the definitive judiciary role, which is intended to decide in real disputes and to find a solution for them; it is thus liable to trespass into the domain of other branches of government; it is devoid of any concrete delineation of the matter  requiring decision; and there is  concern, which is inherent in the adversarial system, that a theoretical argument will not cover all the strata of the matter; this is accompanied by the concern of placing an improper burden on the Court in matters that do not require a decision, in view of the heavy burden resting on its shoulders, which requires it to rule in matters of real significance.

 

31.          Notwithstanding the aforementioned reasons, special considerations may justify this Court’s dealing with an issue, although a decision is not required for the purposes of a concrete matter. The exceptions to the rule, which reject the notion of hearing a theoretical petition, are narrowly interpreted, and the mere fact that an important legal issue is involved is not sufficient reason for hearing a theoretical petition (HCJ 2406/05, Beersheba Municipality v. National Labor Court (unpublished, July 27, 2005); Eliad Shraga and Roi Shahar, Administrative Law: Threshold Causes [Hebrew], 241 (Volume II, 2008)). One of the exceptions to the rule is a situation in which an important question arises and it cannot be adjudicated unless it is presented as a general question, without connection to any specific case (Tzemach Case, at 250; HCJ 73/85, Kach Faction v. Speaker of the Knesset, IsrSC 39 (3) 141, 146 (1985)). When the nature of the matter is such that, in general and for reasons of time it is not possible to render a decision before the matter becomes theoretical, the Court will tend to address the matter even though it is not connected to any concrete dispute that calls for a decision. Another exception concerns a situation in which the parties have already invested considerable input in a legal proceeding that began with a concrete dispute, but a new development in the circumstances, shortly before the ruling was rendered, obviates the need for a decision. In such a case, the Court has discretion as to whether to decide in the matter, notwithstanding the fact that the dispute has already been resolved. This exception will be exercised when the decision is of special fundamental importance, and when considerable input has been invested in the judiciary proceeding that preceded the decision. The Court is given broad discretion in hearing threshold arguments with regard to a theoretical petition, and its role is to strike a balance between the opposing values involved in the matter in question.

 

32.          The matter before us is not a typical case of a theoretical petition that deserves to be denied in limine. First, the proceeding began with a specific, real dispute between the Workers’ Organization and the University. which was resolved prior to the National Labor Court decision, yet the details of this dispute are what dictated the framework of the judiciary decision, which was delineated within a defined topical domain. Second, and more important, this is an issue that has both broad fundamental significance, in the legal and social context, and great immediate practical value. The question of whether a workers’ organization can represent pensioners who are among its members, can declare a labor dispute, and can launch a strike based on a cause that concerns the pensioners’ affairs, has practical and direct consequences for the systems of labor and society. It is not restricted to a legal-conceptual question which is disconnected from day-to-day reality. A decision on this question will have an extensive impact on the relationships between pensioners as a group and workers’ organizations within the circle of labor relations in the state, even if it is not necessarily related to the existence of a specific labor dispute in any particular organization. Such a decision can affect and shape patterns of behavior and activity in the labor economy and in the field of social security, which have a comprehensive, direct and immediate impact. Third, refraining from rendering a decision on the merits of the fundamental question that arises in the petition will mean allowing an important fundamental ruling, which was made by the National Labor Court, to stand with no judicial review, notwithstanding the broader impact of that ruling on nationwide social systems. And fourth, considerable resources have been invested, by all the entities involved in the proceeding, in the judicial handling of this issue.

 

                The cumulative weight of these factors justifies hearing the petition on the merits, notwithstanding the fact that a decision is not required for the resolution of a concrete dispute. Under the circumstances of this case, the examination of the Labor Court’s judgment by this Court, according to the generally accepted tests of judicial review, is meaningful and has important concrete consequences for the establishment of standards of behavior with respect to the extent to which any workers’ organization has the power to represent the affairs of the pensioners among its members. This matter is of importance for Israeli society as a whole and, accordingly, it is fitting and proper to decide it. This was the opinion of the first panel that heard this petition and decided to issue an order nisi in the matter, and this was the opinion of the second panel that heard the petition and determined, at a later stage, that it was necessary to expand the panel to which it was assigned.

 

                Under these circumstances, it is therefore fitting and proper to address the petition on the merits and render a decision.

 

The outline of the decision

 

33.          The question for decision is whether a workers’ organization has the right to declare a protected strike with the aim of promoting the social rights of the pensioners among the members of the organization.

 

                It is important, even at this stage, to emphasize that the Labor Court limited its rulings to a state of affairs in which the workers’ organization is the entity that seeks to declare a strike, when the labor dispute within which the strike is declared concerns the affairs of pensioners who are members of the organization, which are discussed in collective negotiations related to a collective agreement. The Court’s rulings do not extend to the affairs of pensioners who are not organized within the workers’ organization, and the general aspects of the question of their right to organize and to take measures to promote their rights are not included in the Court’s rulings. The deliberation and decision in the petition will, therefore, focus on the issue of the decision that is subject to judicial review.

 

34.          In the outline of the decision, we will examine the following questions, insofar as they are required for judicial review: what has the situation of Israel’s aging population been in the last decades, and, as a result, what is the status of pensioners in society, and does the law provide them with proper protection of their status and rights; what is the status of the workers’ organization within the framework of labor relations, and is it entitled to accept pensioners who have retired from their work as members, to represent them in negotiations with the employer for the purpose of protecting their rights, and to engage in a collective agreement on their behalf; what are the advantages and disadvantages, the “opportunities and risks,” in the organization representing the pensioners’ affairs in collective negotiations; does the organization’s ability to represent the pensioners also mean the right to declare a strike on their behalf; and is the wording and the purpose of the relevant labor laws – the Collective Agreements Law and the Settlement of Labor Disputes Law – compatible with the recognition of the power of a workers’ organization to declare a strike for the purpose of promoting pensioners’ affairs?

 

                This is the course that we will pursue: as a background for this matter, we will begin by considering the social and legal status of the population group of pensioners in Israel; we will continue with a description of existing case law with regard to the representation of pensioners in workers’ organizations from the standpoint of the freedom to organize, and afterwards with defining the status of the right to strike under our legal system. Against the background of these basic principles, we will address the interpretation of the relevant legislation, for the purpose of providing an answer to the question of whether said legislation enables recognition of the right and power of a Workers’ Organization to declare a workers’ strike for the purpose of promoting the rights of the pensioners among its members.

 

The social and legal status of pensioners

 

35.          The status of the elderly in Western society has undergone far-reaching changes and upheavals in the last decades. “At the dawn of the 21st century, we are facing a changing demographic reality; human aging characterizes this development” (Ruth Ben-Israel and Gideon Ben-Israel, “Senior Citizens: Social Dignity, Status and Representative Organization” [Hebrew], Avoda, Chevra ve-Mishpat IX 229 (2002) (hereinafter: Ben-Israel, Senior Citizens). Indeed, similar to processes that are taking place throughout the world, a clear process of aging is affecting Israeli society as well. This process is expressed, inter alia, in a decline in the birth rate, a significant increase in life expectancy, and a constant and considerable increase in the proportion of the elderly population in society (Israel Doron and Ido Gal, “Prevention and Legal Planning in Old Age” [Hebrew], Hamishpat IX 427, 428 (2004)). The degree to which the world’s population is aging is extremely impressive: if, during the 1950s, only 8.1% of the population was over 60 years old, in 2050, 100 years later, some 30% of the world’s population is expected to be above that age (Tal Golan and Israel Doron, Aging, Globalization, and the Legal Construction of “Residence”: The Case of Old Age Pensions in Israel, 15 ELDER L.J. 5 (2007). The situation in Israel is similar: although Israel’s population is considered relatively young compared with the populations of Western countries, the proportion of people aged 75 and up among Israel’s population has increased moderately over the years. Thus, for example, it was 4.7% in 2009, in contrast to 3.85% in the early 1990s. People aged 65 and up represent approximately 10% of Israel’s population, whereas, at the establishment of the State [in 1948], they constituted only 4% of the entire population of the state. Nearly half the people aged 65 and up (some 47%) are over 75. The trend of aging among the population is continuing, and life expectancy in Israel is also continuing to rise, compared with earlier periods. In 2009, Israel’s life expectancy was 79.7 years for men and 83.5 years for women; this reflected, relative to 2008, an increase of 0.7 years among men and 0.5 years among women. In the last two decades, the life expectancy of both men and women has increased by nearly 4 years. Looking to the future, the trend of aging is expected to continue among Israel’s population. Although the percentage of 65-year-olds in Israel’s population has been stable since 1995, forecasts show that, by 2030, they will account for some 14% of the population, and the population group consisting of people aged 65 and up will double, totaling 1.367 million people. In comparison to the international level, the proportion of people aged 65 and up in Israel is higher than their proportion throughout the world and in Asia, Africa and Latin America – areas in which the birth rate is now, or was, in the recent past, relatively high; on the other hand, in comparison to Europe and North America – areas in which the birth rate is lower than in Israel – the percentage of the elderly in Israel is lower. Finally, it should be noted that approximately 20% of people registered in the Departments of Social Services of Israel’s Ministry of Social Affairs are elderly people over age 65; this is twice the percentage of their proportion in the general population (9.8%). As of 2008, 34% of all people aged 65 and up were registered in those departments (Israel Central Bureau of Statistics, Press Release: Data in Honor of International Elderly Day [Hebrew] (2009), http://www.cbs.gov.il/www/hodaot2009n/11_09_220b.doc; Israel Central Bureau of Statistics, Press Release: Selected Data from Israel’s Statistical Yearbook No. 61 [Hebrew], 2010, http://www.cbs.gov.il/www/hodaot2010n/11_10_207b.doc; Israel Central Bureau of Statistics, Israel’s Population, 1990-2009 – Demographic Characteristics [Hebrew] (2010), http://www.cbs.gov.il/www/statistical/isr_pop_heb.pdf).Israel is therefore undergoing a revolution with regard to the scope of its elderly population, and these changes have a profound impact on both social and legal aspects of life (Israel Doron, “Old Age and Economic and Social Rights: the Reciprocal Relationship between the Aging of Israeli Society and the Status of Economic and Social Rights in Israeli Law” [Hebrew], Economic, Social and Cultural Rights in Israel, 893, 896 (Y. Rabin, V. Shani, eds., 2004) (hereinafter: Doron)). The marked change in the scope of the elderly population gives rise to changing social needs that did not exist in the past. The expansion of the population group of senior citizens and the considerable increase in life expectancy emphasize, more than in the past, the need to protect the rights of elderly people to a dignified existence, standard of living and lifestyle, and recognition of their social status and their ability to contribute to society as long as the state of their health allows. A broad social stratum is arising, which was not recognized in the past, whose needs in various areas of life must be addressed by society. It is also necessary to adapt the resources and tools available to the Court to ensure proper protection for the elderly (for a description of the demographic revolution that is taking place and its dramatic effect on the nature of labor relations, see: Tal Golan and Israel Doron, “The Rise and Fall of the Halamish Case: ‘Residence’ and the Right to Old-Age Pensions in the Era of Globalization and Aging” [Hebrew], Mishpat u-Mimshal X (2) 637, 641 (2005)).

 

36.          As part of the social development in question, a broad social concept is in the process of formulation. This concept aims to ensure solidarity and mutual support among the various age groups in society, based on recognition of the need to maintain reciprocal responsibility between intergenerational groups, on the assumption that the members of each age-based stratum in society can be expected to move up the scale as the years go by, and eventually to reach their declining years. Arising in this changing reality is an extensive population stratum with special needs, which requires the formulation of a social and legal infrastructure to meet those needs. The aging of the population and the significant increase in life expectancy poses new challenges for society and the law. Principles of intergenerational reciprocal responsibility, founded on respect for senior citizens and concern for their needs, require the adjustment of social and legal patterns to the dynamic, changing reality.

 

37.          The needs of the elderly are reflected in various areas of life, but the most basic need concerns the means of subsistence that are left to them, which are intended to ensure that they live through old age with dignity. The right to human existence with dignity is linked to and interwoven with the right to economic subsistence with dignity. If a person’s basic right to economic subsistence is violated in his old age, his constitutional right to human dignity is also liable to be violated (HCJ 5578/02, Manor v. Minister of Finance, IsrSC 59 (1) 729, 736 (2004); LCA 4905/98, Gamzo v. Yishayahu, IsrSC 55 (3) 360, 375-376 (2001); HCJ 161/94, Atari v. State of Israel (unpublished, March 1, 1994)). The existence of a multi-age society, which is continuing to develop as a result of the demographic changes taking place, calls for the existence of inter-age solidarity as an essential element in securing social dignity for the various age groups in society (Ben-Israel, Senior Citizens, at 230-231). Indeed, “a society that includes senior citizens who do not have sufficient means of subsistence, or whose means of subsistence are uncertain or irregular – such a society is devoid of human dignity, because it deprives individuals of the possibility of being active partners in the social and economic life of the society in which they live” (Ruth Ben-Israel and Gideon Ben-Israel, Who’s Afraid of the Third Age [Hebrew] 113 (2004) (hereinafter: Who’s Afraid of the Third Age)). Ensuring reciprocal responsibility and brotherhood in society therefore necessitates giving senior citizens, like any other individual in society, means of subsistence that will ensure their right to human and economic dignity.

 

38.          One of the pivotal strata in the economic and social system – a stratum intended to provide social security to Israel’s aging population – is that of the occupational pension, which is designed to prevent a steep decline in the standard of living of people once they reach old age, by maintaining a reasonable ratio between their income before and after reaching old age. From a conceptual standpoint, occupational pensions confer eligibility for a secure pension allowance upon people after they retire from work and for the rest of their lives. However, not only do some of Israel’s elderly not benefit from pension insurance (thus, for example, it has been estimated that, as at 2000, approximately one-half of Israel’s civilian labor force did not have such insurance); the pension insurance itself suffers from a number of basic problems and does not always guarantee economic security for the elderly or protect their right to existence with dignity (Doron, at 903-905; for a description of various basic problems in the field of pension insurance, see id., at 905-910). Furthermore, the pension insurance that is given to workers cannot fulfill its purpose over time if it is not formulated to adapt itself to life’s changing circumstances: “In order to ensure that the pension will be able to fulfill its purpose and provide senior citizens with an alternative to the loss of their possibility to earn from work, it is necessary to ensure that it does not become eroded. ... Pension erosion is liable to push senior citizens below the poverty line, even though, throughout their active lives, they worked and did everything that was necessary to ensure their social security after retirement ... As long as fixed, normative, appropriate mechanisms are not established to keep pensions and old-age allowances from eroding, the social dignity of senior citizens will not be secured” (Who’s Afraid of the Third Age, at 105). In this reality, it is essential to give pensioners effective power to secure their economic and social status to make use of recognized legal means, including negotiations with the employer or the pension fund in order to adapt the pensions to the changing conditions of life, especially insofar as pensions are classified as a long-term contract that requires periodic adjustments, based on the wishes of the parties (cf. Gideon Hollin, “Adjusting Employment Contracts and Collective Agreements to Changing Situations” [Hebrew], Menahem Goldberg Commemorative Volume [Hebrew] 288 (2001); David (Freddie) Ronen, Adapting Contracts to Changing Circumstances [Hebrew], 103-109 (2001)).

 

The representation of pensioners by a workers’ organization – the aspect of freedom of association and organization

 

39.          One of the definitive expressions of the integration of pensioners as a group into the protected social system is reflected in the existing recognition of the power of workers’ organizations to represent pensioners who have retired from the workplace. This representation is recognized in labor law worldwide and in Israel. It basically stems from the principle of freedom of association and organization, which was recognized as early as 1948, within the framework of the Convention Concerning the Freedom of Association and Protection of the Right to Organize. The provisions of Section 3 of the Convention give employees and employers complete freedom to organize in order to promote their rights, and forbid the authorities from imposing limitations upon that right. The freedom of association and the freedom of organization have also been recognized as basic rights in Israeli case law:

 

The right to associate is ‘one of the human freedoms’... It is deeply anchored and well protected in case law ... both generally and with regard to the right to associate in a workers’ organization... The right to associate in a workers’ organization has been recognized in international conventions... Indeed, in Israel as well, workers, whoever they are, are entitled to establish an organization according to their choice and with no need for previous authorization (Amit Case, at 94-95 (Justice Zamir)).

 

40.          Besides being an independent basic right, the right to freedom of organization within the framework of a workers’ organization fulfills the human right to dignity: “Workers’ organizations play an essential role in regulating labor relations and promoting workers’ rights. Through them, a balance is achieved between the worker’s individual weakness and the employer’s economic strength, thus preventing the exploitation of weakened workers to the point of violating their dignity” (Hani Ofek-Gendler, “Organization for Soldiers – Has the Time for Change Come in Israel?” [Hebrew], Mishpat ve-Tzava XIX 117 (2007)). At the international level, the right to organize is perceived as a framework right, which is composed of three complementary rights: the right to organize; the right to conduct collective negotiations; and the right to strike (Ruth Ben-Israel, “Strikes as Reflected in Public Law: Strikes, Political Strikes and Human Rights” [Hebrew], Berenson Commemorative Volume [Hebrew] 111, 112 (Volume III, 2007) (hereinafter: Ben-Israel, Strikes as Reflected in Public Law)). However, the question of whether a workers’ organization will be recognized as such for the purpose of a certain law is a separate question, which depends on the purpose that the law in question was meant to achieve.

 

41.          For many years, workers’ organizations in Israel have included pensioners from the workplaces within their ranks, as reflected in the articles of association of various workers’ organizations. This appears in the articles of association of the University, in the matter before us, and in the articles of association of the Histadrut as well. For quite some time, the case law of the National Labor Court has recognized pensioners’ membership in workers’ organizations and the role of the organization in protecting the pensioners’ rights. Thus, for example, the National Labor Court noted, as early as 1975:

 

We have not heard of anyone who, when he stopped working and became a pensioner, stopped being a member of the workers’ organization to which he had belonged before he retired from the workplace – in contrast to membership in a trade union; and it is reasonable to assume that the workers’ organization in question – in this case, the General Federation of Labor – was capable, through its appropriate agencies, of looking after the affairs of members who had stopped working and had become pensioners. Obviously, what is meant here is representation within the framework of negotiations for determining rights. But if what is meant is securing rights and imposing obligations in a collective arrangement with legal validity, there is no other solution than by way of legislation... (National Labor Court File 3-18/35, Israel Electric Corporation Ltd. – Pravosky, IsrNLC VI 253, 269 (1975) (hereinafter: the Israel Electric Corporation Case)).

 

                In (National) Labor Court Appeal 300040/98, Shekem Pensioners’ Organization – Shekem Ltd., IsrNLC XXXVII 289 (2002) (hereinafter: the Shekem Pensioners’ Organization Case), the National Labor Court also addressed the question of the power of a workers’ organization to represent pensioners, in these words:

 

The Israeli model of a workers’ organization is broad in scope and includes activity on behalf of the pensioners... It has already been ruled that handling the determination of pension terms falls within the realm of the legitimate activity of a workers’ organization. Chapter XI of the Constitution of the General Federation of Labor empowers the Pensioners’ Federation to take measures for the sake of pensioners’ rights in the realm of pensions. A pensioner can be a member of a workers’ organization, and a workers’ organization can include a section or an extension that handles the affairs of the veteran pensioners... Accordingly, in addition to representing workers, which is the main function of the workers’ organization, the workers’ organization is also authorized to represent the pensioners, under certain circumstances and within certain limits (id., at 301-302).

 

42.          The question of extending membership in a workers’ organization beyond the active workers who are its members was addressed by this Court in the Amit Case. According to that judgment, the ability of a workers’ organization to represent the pensioners among its members should be recognized. However,  for a workers’ organization to be recognized as having the status required for the Collective Agreements Law and the Settlement of Labor Disputes Law, membership in the organization must be voluntary and reflect the member’s right to join and to withdraw from the organization. Furthermore, the majority of the organization’s members must be active workers in the employer’s service, because the organization’s principal role is to represent the workers’ affairs vis-à-vis the employer and to promote and improve their working conditions by way of collective negotiations. This means that a workers’ organization that is recognized for the purpose of the labor laws in the field of collective agreements and resolution of labor disputes is an organization whose major function is to represent active workers and to take measures to promote their working conditions, whereas representation of pensioners and their affairs, although it is recognized, is not essential. Indeed:

 

A workers’ organization in which a large part of the members are not wage-earning workers, is a contradiction in terms, and not only from the linguistic standpoint, but from the substantive standpoint as well. This is because, as stated, a workers’ organization, as this term is used in labor laws and according to the purpose of these laws, is an organization whose principal function is to represent the workers vis-à-vis their employer – and the workers, of course, are wage-earners (id., at 108).

 

                The difficulty in recognizing an organization with many members who are not active workers lies in the concern that it is liable to split its loyalties between its activity at the collective level and other activities, and this is not proper conduct, in the opinion of the Court in the Amit Case. However, the judgment in the Amit Case did not negate the status of a workers’ organization for the purpose of the relevant labor laws, when it has a minority of members who are not active workers, and especially when this minority is composed of the pensioners of the workplace, who were active workers and members of the organization before they retired from work.

 

43.          The representation of the pensioners’ interests by the workers’ organization has two aspects: one, at the stage when the worker is still active in his workplace and wishes to ensure a proper standard of retirement conditions before he leaves his work; and the other, after the worker retires, when he has to ensure that the standard of his retirement conditions will be preserved and will not be eroded and, if necessary, will be adapted to the changing conditions of Israel’s economic, social and financial situation.

 

                The representation of the pensioners’ interests by the workers’ organization, including both of these aspects, is closely linked to workers’ rights – both before and after they retire from work. The shaping and formulation of workers’ retirement rights are inextricably tied to the workplace and the period of the work, and are primarily governed within the active years of work. Even after retirement, in most cases, pensioners maintain an ongoing relationship with the workplace, not only in the intergenerational joint activities for the institution’s employees, but also in the context of the continuous and constant concern that the employer is required to exercise in preserving the pensioners’ rights and status. It is only natural for the workers’ organization that represented the workers during their working years, and took care, inter alia, to formulate the retirement conditions to which they could look forward, to extend its protection to them after their retirement as well and to be in charge of exercising their rights and preserving their status after they leave the workplace. In this way, the workers’ organization constitutes the natural link between active workers and workers who have retired, and the continuity of protection that it gives its members in the intergenerational transition from one stage to the next in the workers’ lives is an obvious and natural part of the concept of the workers’ right to organize for the purpose of protecting their rights.

 

44.          The National Labor Court judgment discloses data – which cannot be disputed – showing that the prevailing reality, from the standpoint of customs that are generally accepted and recognized in society, is that, in many workers’ organizations, pensioners are among the organization’s members even after they retire; the close cooperation between the actual workers and the pensioners of the workplace is an existing fact; in many workplaces, the continuous ties between the employer and the pensioners are preserved by means of a collective agreement, a personal contract or internal regulations, which express these ties; in many cases, a collective agreement includes conditions that refer to pensioners, and in the prevailing reality, workers’ organizations that include pensioners actually conduct negotiations on the pensioners’ rights within the framework of collective agreements; frequently, pensioners even continue in vocational activity in their former workplaces, and the institutions of higher education are a typical example of this.

 

45.          The expansion of the elderly stratum of the population, the need to protect the rights of those belonging to this social stratum, the close ties between pensioners and their former workplace, and the close affinity between active workers and pensioners from the standpoint of the interest in protecting retirement rights, confer upon both the pensioners and the workers’ organization an explicit interest in having the organization represent the affairs of the pensioners among its members. This phenomenon is well known in society and under law, in Israel and worldwide. The phenomenon of intra-organizational frameworks that handle pensioners within the workers’ organization is also known in Italy, and finds support in the mechanisms of the European Union as well (Ben-Israel, Senior Citizens, at 246; on the important contribution made by workers’ organizations in securing pensioners’ substantive rights, see: id., at 247).

 

The means available to the workers’ organization for the purpose of representing its members’ affairs

 

46.          The workers’ organization is basically intended to give workers the power to enable them to deal collectively with the employer’s power. Recognizing the organization’s status as the representative of the group of pensioners among its members, in order to protect their rights, in any event means recognizing the organization’s power to conduct negotiations with the employer in the context of retirement rights, not only with regard to active workers who have not yet retired, but also with regard to workers who have already retired, as long as they remain members of the organization. Recognizing the existence of this power also means recognizing the organization’s power to use the means made available to it by the law for the purpose of conducting collective negotiations and obtaining a collective agreement. If this power of the organization is not recognized, the pensioners’ affairs remain with no real protection. The collective agreement is what makes the protection of the pensioners’ rights real, and the means available to the workers’ organization for achieving the collective agreement and safeguarding its arrangements are the true expression of the existence of solidarity regarding the protection of pensioners as a group.

 

47.          The principal means available to the workers’ organization in its struggle to promote the workers’ interests is collective activity. In the Amit Case, the Court defined the principal means available to the workers’ organization for the purpose of collective activity, as follows:

 

The organization conducts collective negotiations with the employer, or with an employers’ organization, with a view to signing a collective agreement that will determine the working conditions of the organization’s members, or of all of the employees in the workplace or the industrial sector. In the event of a dispute between the workers and the employer, the workers’ organization can exercise its collective power through sanctions against the employer,  primarily by means of a strike (id., at 91).

 

                Without the power to conduct collective negotiations with a view to signing a collective agreement and, in the case of a dispute, to exercise the collective power through the means available to the organization, including a strike, the organization would be deprived of the effective power to fight for the achievement of its objectives and to achieve results in its fight.

 

48.          Recognizing the organization’s power to represent the affairs of the pensioners among its members assumes, prima facie,  that the organization has the power to “exercise its collective power through sanctions against the employer, primarily by means of a strike,” (Amit Case, id.) inter alia, in order to promote the affairs of the pensioners represented by it. This assumption is reinforced by the status of the right to strike as a right with a supreme normative status, which also impacts the nature of the means available to the organization in its struggle on behalf of the pensioners’ affairs.

 

The right to strike

 

49.          As in many other countries across the globe, the rights of strike and lockout in Israel are not explicitly specified by law, nor does legislation provide an explicit definition of the term “strike” (Menahem Goldberg and Nahum Feinberg, Labor Law [Hebrew], Volume III, Chapter 5, at 3-4 (50th edition, 2010) (hereinafter: Goldberg and Feinberg)). In case law, “strike” has been defined as “a coordinated act of pressure, conducted by a group of workers within the framework of the workers’ professional struggle with an employer for the purpose of achieving demands related to the terms of their employment or related to the demands of other workers that were presented to their employer” (HCJ 525/84, Hatib v. National Labor Court, Jerusalem, IsrSC 40 (1) 673, 701 (1986) (hereinafter: the Hatib Case)). A strike is held to be “a coordinated collective refusal to perform work in an attempt to influence the employer with regard to labor relations or working conditions” (Guy Mondalek, “Quasi-Political Strike, Quasi-Political Teaching: Thoughts on Legal Distinctions and Their Teachings” [Hebrew], Iyyune Mishpat Hebrew] XXV (2) 343, 346 (2001) (hereinafter: Mondalek)); a striker is a person who, “without breaking his work connection with his employer, stops working, together with other workers, in order to achieve his demands from his employer or in order to help other workers achieve their demands from their employer” (CA 573/68, Shavit v. Hanan, IsrSC 23 (1) 516, 520 (1969) (hereinafter: the Shavit Case)). A strike does not sever the labor relations; rather, it is part of the worker’s professional struggle (Hatib Case, id.). The starting point is that workers are given freedom to strike, but in order for said freedom to be recognized, without the workers being exposed to the risk of actions for damages caused by the strike, certain conditions must be fulfilled so that the strike will be considered to be protected (Mondalek, id.; for another definition of “strike,” see also: Ben-Israel, Strikes as Reflected in Public Law, at 112-113); for the meaning of an unprotected strike and its consequences, see, inter alia: Goldberg and Feinberg, at 16-17; Sections 37a-c of the Settlement of Labor Disputes Law).

 

50.          The right to strike is basically a social right, which is held to be of special normative value (Ruth Ben-Israel, Strikes and Lockouts as Reflected in Democracy [Hebrew] 77 (2003) (hereinafter: Ben-Israel, Strikes and Lockouts)). In order to anchor the right to strike in a direct constitutional provision, it would have been necessary to promote the legislation of Basic Laws concerning social rights – a course of action that has not yet borne fruit in Israel, notwithstanding repeated attempts. Nonetheless, despite the fact that the right to strike has not yet been expressly anchored in a Basic Law, it is considered to be a basic right that is not anchored in  the statute book (HCJ 1074/93, Attorney General v. National Labor Court, Jerusalem, IsrSC 49 (2) 485, 496-497, 507 (1995) (hereinafter: the Bezeq Case); (National) Collective Dispute Appeal 25/07, Israel Electric Corporation Ltd. – New General Federation of Labor in Israel, paragraph 18 (unpublished, January 27, 2008); Goldberg and Feinberg, at 3; cf.: CA 593/81, Ashdod Vehicle Enterprises Ltd. v. the late Tzizik, IsrSC 41 (3) 169, 190-192 (1987); CA 25/71, Feinstein v. Secondary School Teachers’ Organization, IsrSC 25 (1) 129, 131 (1971)).

 

                The right to strike has been recognized at the international level as a universal human right (Section 8 of the International Covenant on Economic, Social and Cultural Rights, 1966; Ben-Israel, Strikes as Reflected in Public Law, at 112)). This is a right of a constitutional nature, which reflects social values of supreme importance. From the beginning, the right to strike has been perceived as a right derived from the very essence of collective labor relations and the recognition of the freedom to organize, which is recognized in our legal system as a basic right that  is fundamentally linked to the value of human dignity (Goldberg and Feinberg, id.). A question has arisen as to whether it is possible to include the right to strike among the basic rights anchored in the Basic Laws, as “framework rights,” such as the human right to dignity (Ben-Israel, Strikes as Reflected in Public Law, at 130). There is an approach that holds that the human right to dignity pursuant to Section 2 of Basic Law: Human Dignity and Liberty also extends, inter alia, to the workers’ right to a dignified existence, from which the right to strike – which is an essential means of ensuring the exercise of the right to a dignified  existence– is derived. On the relationship between the right to strike and human dignity, Prof. Barak commented in the past:

 

“Human dignity” must be shaped as a basic constitutional value that has an independent existence of its own. It must not be restricted... It must not be expanded... What we have before us, then, is a rather broad ‘living