Severance Pay to Heirs of Employees who Died During the Period of the Swords of Iron War

An important amendment to the Israeli Severance Pay Law was enacted recently to facilitate the process of redeeming the severance pay of employees who died during the period prescribed in the amendment.

Highlights of the amendment

Prior to the amendment, the law prescribed that, in the event of the death of an employee, the employer must pay the severance pay to the employee’s surviving relatives as if the employer had dismissed the employee. The definition of “surviving relatives” in the law includes the employee’s spouse at the time of his death, including the common-law spouse with whom he lived, and the employee’s dependent child.

The law also prescribed that, in the event that severance pay is payable to surviving relatives who are other than spouses or dependent children, the severance pay is to be deposited with the Regional Labor Court and shall be paid to those surviving relatives determined by the court and in accordance with the distribution upon which the court shall decide, while giving consideration to their financial situation and degree of dependence on the deceased employee.

In order to make it easier for surviving relatives and heirs to receive the deceased employee’s severance pay and to eliminate legal proceedings that might be necessary in order to clarify the entitlement of distant surviving relatives or because the deceased employee has no surviving relatives, the amendment prescribes an arrangement enabling severance pay to be paid to the deceased employee’s statutory heirs or to the heirs named in his will, without having to open legal proceedings or deposit the severance pay with the Regional Labor Court.

Applicability

The legislative amendment defines the determining period as commencing on October 7, 2023 and ending one year after the rescission of the declaration of the state of emergency in the home front. According to the new arrangement prescribed in the amendment, an employer must pay severance pay to the surviving relatives of an employee who died during this period, as if the employer had dismissed him.

If the deceased employee has no surviving relatives, the employer must pay the severance pay to his statutory heirs or heirs according to his will.

Deceased employees to whom the amendment does not apply

The legislative arrangement will not apply to a deceased employee in one of the following instances:

1. Severance pay was already paid due to the employee’s death before the amendment came into effect; i.e., before August 8, 2024;
2. The regional labor court has already issued a ruling in the deceased employee’s case;
3. A proceeding has begun in accordance with the additional arrangement in the law, unless all parties to the proceeding (other than the employer) have agreed to apply the arrangement prescribed in the amendment.

When will the amendment come into effect?

The amendment comes into effect on August 8, 2024.

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Barnea Jaffa Lande is at your service to advise you in this regard as well as in relation to any employment law issues.