Labor courts refrain from approving class action lawsuits by employees against employers, on the grounds that these are complex issues that cannot be dismissed and applied to all employees.
One of the prominent rulings in this context is called the "Castro Rule", but a few days ago the High Court interfered with the ruling of the National Labor Court, and canceled the Castro Rule.
The High Court ordered to discuss this procedure while commenting that the reasoning of the High Court of Labor is not relevant, because the institution of the class action is intended for both simple and complex claims.
This is a ruling with fateful consequences for thousands of employers, which will create a distortion in the labor market.
Indeed, the law allows a class action to be filed in the Labor Court, but over the years the strict approach taken by the Regional Labor Courts has led to a significant reduction of class actions related to labor law, and the High Court has rarely intervened, due to the specific expertise that exists and is relevant to the field of labor law.
The High Court's decision now opens a window for class action lawsuits, and may collapse small employers, which will cause the employees to submit debt claims to the National Insurance after the employer will not be able to meet the payments and will be forced to close the business. In contrast to consumer lawsuits, in which the claimed differences can be from tens to hundreds of shekels , the differences claimed in a labor dispute between an employer and one employee are tens of thousands of shekels. Take, for example, an employee in a company who was not paid holiday pay at the full rate. While his claim can amount to a few thousand shekels, the acceptance of such a claim as a class action can reach hundreds of thousands of shekels, thus collapsing the employer.
Allowing the possibility to file a class action may lead to claims of hundreds of millions of shekels, which will make even the largest companies consider their steps.
It is true that most of the violations are committed against disadvantaged workers in circumstances where there is no workers' organization, or the organization does not fulfill its mission and it is important for the employer to charge these payments.
At the same time, the High Court's determination that the class action should apply in the world of labor law, could lead to the opposite result, despite the desire to protect the workers in Israel.
The justice that the High Court declared in the Castro rule is disconnected from the grace that currently exists in the labor courts. Unlike the consumer sector, the labor sector in Israel is regulated and saturated with regulation. Apart from the legislation, and the many regulations in the field of workers' rights, employers are subject to constant supervision and face criminal and administrative sanctions imposed on them in the event of Violation of rights, along with the lawyers who can file financial claims against them.
It is appropriate that the High Court of Justice re-discuss this issue within the framework of a wider composition. Alternatively, the next government has the responsibility to regulate access in an orderly manner, which will prevent the emptying of the content of the Labor Court and its transformation into a scene of wrangling between lawyers with claims of millions while repressing the workers and the employers to the end, and the loss of the uniqueness of the labor courts.
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