Client Update | Year-End Update and Looking Ahead to the New Year

As we approach the beginning of a new year, we would like to present several recent court decisions that have implications for workplaces. In addition, we provide an update regarding the recuperation pay rate applicable to employees in the private sector and the Extension Order concerning payments to employees who were absent from work during the latest round of hostilities with Iran.

Background Checks on Job Candidates and the Right to be “Forgotten”

In proceedings before the Tel Aviv Regional Labour Court (Lab. Case (Tel Aviv Regional) Mizruach v. Bloomberg L.P., judgment dated June 16, 2026), issues concerning the legitimacy and reasonableness of conducting background checks on job candidates were examined.

The case concerned a candidate for a senior position as head of Bloomberg’s Israeli branch. The parties conducted negotiations, and the claimant was required to sign an employment agreement, which provided, among other things, that the commencement of his employment was subject to the completion of background checks.

As part of those checks, which were conducted for the employer by an external company, various posts made by the claimant on social media were identified, some dating back approximately a decade. Certain posts were of a nature that was interpreted as racist. The claimant agreed, while providing explanations regarding the context of the statements, to delete those posts. Nevertheless, the employer was not satisfied and informed him that, in light of the findings of the background check, the employment agreement would not enter into force.

The Regional Labour Court did not find it necessary to decide the principled question of what constitutes a reasonable background check, but concluded that the checks conducted under the circumstances were stringent. In this context, the Court noted that some of the claimant’s social media posts were approximately ten years old. According to the judgment, in a reality where online publications enjoy “eternal life,” the question arises as to an individual’s, including a job candidate’s, right to be “forgotten,” such that statements made or written years earlier should not be taken into account when evaluating a candidate for employment.

Under the circumstances, the Court held that the employer had failed to demonstrate any justification legitimizing a search for the claimant’s social media posts dating back a decade. Accordingly, the claimant was awarded monetary damages equivalent to six months’ loss of earnings, as well as compensation for non-monetary damage.

An appeal filed against the judgment may lead the National Labour Court to issue a broader and more principled ruling on this issue.

Please note:

1. If you are required to conduct background checks on job candidates, we invite you to obtain specific legal advice regarding the legitimacy and reasonable scope of such checks under the particular circumstances.
2. Although the judgment’s discussion of the right to be “forgotten” relates to a job candidate, it may also be relevant to employees during the course of their employment.

Further Expansion of Employer Obligations Under the Prevention of Sexual Harassment Law and Regulations

The National Labour Court recently issued a judgment (Labour Appeal (National) 55624-01-25 Anonymous v. Anonymous, published August 10, 2026) that expanded employers’ obligations under the Prevention of Sexual Harassment Law and its regulations, applying various duties even with respect to a person who was not an employee of the employer.

In that case, a municipality employee arranged for a woman with whom he maintained a sexual relationship to obtain employment with a corporation affiliated with the municipality. Sexual encounters between the two continued while the woman was employed by the corporation, where the municipal employee served as a director on behalf of the municipality.

According to the Court’s findings, the sexual relationship existed as consideration for the woman’s hiring by the municipal corporation and for the continuation of her employment there. Relations of authority existed between the parties, despite the absence of a formal organizational reporting relationship.

The Court examined the municipality’s liability in light of the fact that it was not the woman’s employer (she was employed by the municipal corporation). The National Labour Court held that, notwithstanding the fact that the corporation, rather than the municipality, was the woman’s employer, the municipality bore liability under the Prevention of Sexual Harassment Law and its regulations. Accordingly, in addition to ordering the employee to pay compensation of NIS 600,000 for sexual harassment, the municipality was ordered to pay compensation of NIS 50,000 for breaching its statutory obligations.

Please note:

1. This represents a further expansion of obligations under the Prevention of Sexual Harassment Law and its regulations. While approximately one year ago, in another National Labour Court judgment (Labour Appeal (National) 36223-03-24 Shoham Local Council v. Anonymous, June 8, 2025), employer obligations were expanded to circumstances where the harasser was not its employee, the present case expands those obligations to situations where the victim of harassment was not an employee of the employer entity. In addition, in a judgment rendered several months ago by the Tel Aviv Regional Labour Court (Lab. Case (Tel Aviv Regional) 69438-06-21 Anonymous v. Sheba Medical Center, published April 12, 2026), employer obligations were applied in relation to an employee harassed by a third party, namely a hospital patient.
2. The National Labour Court interpreted the phrase “within the scope of employment relations” in the Prevention of Sexual Harassment Law broadly, encompassing situations beyond those involving an employer’s own employees. This stems from the view that the law is intended to protect anyone who may be harassed or subjected to retaliation arising from sexual harassment in the workplace.
3. The Court reiterated a principle expressed in prior judgments, namely that in order for an employer to satisfy its obligations under the law and regulations, it must implement meaningful preventive measures tailored substantively and concretely to the specific nature of the workplace. Mere technical compliance, such as publishing a policy, appointing a responsible officer, or investigating complaints, is insufficient.

Documents Generated During an Investigation of Workplace Bullying Complaints: Are They Privileged and Confidential?

The National Labour Court has previously recognized a (limited) privilege with respect to documents generated during investigations of sexual harassment complaints (Leave to Appeal (National) 20470-12-20 Sela v. Anonymous, December 5, 2021). Does this privilege also apply to documents generated during an investigation of workplace bullying complaints?

In a recent decision (Leave to Appeal (National) 83786-02-26 Anonymous Ltd. v. Anonymous, published July 22, 2026), the National Labour Court considered an application for leave to appeal a document disclosure ruling issued by a Regional Labour Court.

In that case, an employee was dismissed following allegations of workplace bullying. The Regional Labour Court considered the dismissed employee’s motion for document disclosure, relying on the principles established in the Sela case, regarding investigations of sexual harassment complaints. The Regional Labour Court ruled, inter alia, that the employer was required to disclose all complaints submitted against the dismissed employee; all evidence collected during the internal investigation; the identities of the complainants and the first initials of employees who testified during the investigation; transcripts of witness testimony; and the complete concluding investigation report.

The National Labour Court dismissed the employer’s application for leave to appeal, which related solely to its obligation to provide the claimant with the identities of the complainants and the first initials of the witnesses. According to the National Labour Court, the practical effect of that ruling under the circumstances was effectively full disclosure of the identities of all employees who testified during the investigation.

Please note:

1. Although the National Labour Court did not directly decide whether the Sela doctrine regarding privilege over documents generated during investigations of sexual harassment complaints also applies to investigations of workplace bullying complaints, the outcome indicates that one cannot assume that the same limited privilege applicable to sexual harassment investigations will necessarily apply to documents generated during workplace bullying investigations.
2. This outcome requires caution and diligence when conducting investigations concerning allegations of workplace bullying. In particular, complainants and witnesses cannot be assured in advance that statements made during the investigation, or even the fact that they submitted a complaint or testimony, will remain confidential.

Update of the Recuperation Pay Rate for the Private Sector for 2026

Further to a collective bargaining agreement signed on this matter, an Extension Order was issued on August 18, 2026, extending the agreement’s applicability to employers in the private sector.

Pursuant to the Extension Order, the employer’s participation in an employee’s recuperation expenses in the private sector for the year 2026 shall amount to NIS 451.50 per recuperation day.

Please note:

1. In 2023, the Chief Labour Relations Commissioner at the Ministry of Labour issued a legal opinion stating that “the 2023 recuperation year” under the then-applicable Extension Order ran from July 1, 2022 through June 30, 2023. Applying that legal opinion as written to the “2026 recuperation year” leads to the conclusion that the updated recuperation-pay rate applies from July 1, 2025 onward.
2. Employers seeking advice regarding the scope of any obligation to pay adjustments arising from the revised recuperation-day rate are welcome to seek specific legal guidance.

Extension Order: Payments to Employees Absent From Work During the Most Recent Round of Hostilities With Iran

Following the execution of a collective bargaining agreement on this matter, an Extension Order was published on August 30, 2026, addressing salary payments to employees who were absent from work during the most recent round of hostilities with Iran (Operation “Lion’s Roar”).

Please note:

1. The Extension Order applies to employers in the private sector. For most public-sector employers, the provisions of a collective agreement signed between the State and the Histadrut are expected to apply, with public-sector employers having had the option of joining that agreement.
2. The Extension Order regulates payments for the period from March 1, 2026 through June 30, 2026.
3. Eligibility for payment applies primarily to parents who were absent from work due to the closure of educational institutions attended by their children, subject to the conditions set forth in the Extension Order, and to employees with disabilities.
4. As a general rule, where an employer deducted vacation days from an employee who is entitled to salary payments under the Extension Order while continuing to pay salary, the vacation pay paid should be regarded as salary for these purposes, and the employee should be re-credited with the vacation days deducted.
5. The payment date for eligible employees is the salary payment date for September 2026.

Employers requiring information regarding eligibility conditions and the applicability of the Extension Order to specific employees are invited to seek individual legal advice.

We wish you and your families a good and peaceful year, a year of both productive work and well-deserved rest.

Labour Law Department

Herzog Fox & Neeman