Tel Aviv Court Orders 500,000 NIS Payout to Fired Sales Agent Over Unpaid Overtime
The Tel Aviv Regional Labor Court ordered a company to pay 500,000 NIS to a dismissed sales agent, ruling that unpaid overtime and omitted commissions violated labor laws.
The Tel Aviv Regional Labor Court has ordered a hydraulic crane import and marketing company to pay roughly 500,000 NIS in compensation to a former sales representative who was dismissed after approximately three years of employment. The court ruled that the employer failed to fulfill its legal obligations, primarily by withholding overtime pay and omitting sales commissions from wage calculations. An additional 40,000 NIS in legal fees, alongside statutory interest and indexation, were added to the total.
The claimant, Avraham Rahmani, worked as a field sales agent for Kuli K.A. Cranes Ltd. Following his termination, he filed a lawsuit seeking 876,000 NIS for unpaid compensation. When he started, his base salary was 14,000 NIS gross per month plus sales commissions, with a guaranteed minimum total of 22,000 NIS gross for the first few months. Later, the company restructured his compensation, dropping his base salary to 7,000 NIS while adjusting commission rates to 1% on sales up to 1.7 million NIS.
Overtime and Commission Disputes
One of the central debates in the case revolved around overtime compensation. The company argued that due to Rahmani's role as a field agent, his hours could not be monitored and he was therefore exempt from overtime rules. The court rejected this argument, emphasizing that modern technological and managerial tools make supervision feasible, particularly since much of his schedule was pre-planned. Consequently, the court awarded over 300,000 NIS specifically for unpaid overtime.
The court also examined whether sales commissions must be included when calculating base entitlements. It ruled that Rahmani's commissions were an inseparable part of his regular salary and must factor into overtime calculations.
"The commissions were paid to the plaintiff from the very first shekel, with no condition other than performing sales work, which was the plaintiff's routine duty, and the commission rates significantly exceeded the basic salary paid to the plaintiff," the court ruling stated.
Dismissal Context and Legal Significance
Rahmani was eventually called to a disciplinary hearing and fired after discussing payment terms with a client and raising the possibility that the client might take legal action against the company (a lawsuit that the client subsequently won).
Attorney Avi Mor Yosef, who represented Rahmani, noted: "The labor court's ruling is another important milestone in correcting a long-standing injustice where many employers use commission structures to attempt to evade full social rights payments to their employees."
