Update on Service Users’ Obligation to Hold Hearings for Service Providers’ Employees
Last July, the National Labor Court issued an important ruling on a service user’s obligation to take part in the termination and hearing process for contract workers employed on site.
According to that ruling, the extent of the service user’s participation in the hearing depends on the circumstances. Accordingly, in our previous update, we tried to predict the criteria that would be taken into account, in order to analyze how the National Labor Court’s ruling should be applied in various scenarios.
In early December 2020, the National Labor Court addressed this issue once again in another case and issued several guidelines regarding the extent of the obligation. These guidelines echo our advice.
The National Labor Court’s latest ruling reviewed a tripartite employment model, comprised of the service user, the manpower contractor, and the contract worker. In this case, a manpower contractor employed a contract worker for about a year, placing her part-time with a service user for only about four months. After this period, the service user decided it no longer needed the worker’s services and sought to terminate her placement.
After determining the worker’s placement with the service user through the manpower company did not give rise to employment relations between the service user and the worker, the court examined the service user’s obligation to conduct a hearing for the worker since it was its decision to terminate her placement.
According to the ruling, in this case, the service user was not under any obligation to conduct a hearing for the contract worker.
The National Labor Court reviewed the circumstances under which a service user is not required to conduct a hearing for a contract worker.
1) Period of placement at the service user – In this case, the contract worker worked for the service user for a very brief period, only about four months.
2) Placement scope – The contract worker was placed with the service user in a part-time position and was concurrently placed with other service users.
3) Reason for placement’s termination – In this case, the reason for termination was that the client no longer needed the service. There were no grave allegations against the contract worker personally.
4) Outcome – The contract worker was not dismissed from the manpower company because of the termination of her placement with the service user.
Conversely, these guidelines provide an indication of the circumstances under which a service user would be required to take part in a termination and hearing process for a contract worker. Take, for example, a contract worker who worked at a particular service user for a considerable period and a significant number of hours per day. If this placement were terminated for serious cause and the outcome of the termination was the employee’s dismissal from the manpower company, then the service user would be obligated to be involved in the contract worker’s hearing process.
We note the court ruling added a comment that the contract worker was entitled to receive an explanation for the service user’s decision to terminate her placement and to respond to her. The court found it would have been “proper” to provide her such an explanation. Nevertheless, the court ruled that the mere fact the service user provided no explanation does not entitle the contract worker to compensation.
We believe this ruling will similarly apply to employees of service contractors (in the cleaning, security guard, and catering sectors) placed at companies to provide these services.
Accordingly, and considering the circumstances of each unique case are examined on their merits, we again advise all of our clients that engage with manpower or service contractors to analyze the guidelines provided in this ruling and to make sure their format of engagement with these contractors does not create unnecessary exposure.
Our Employment Department is at your service if you seek any additional advice at any time.