Seventy-six Palestinian residents of Gaza fired from their jobs at an Israeli company operating in the region in 2004 are entitled to severance pay, the National Labor Court ruled on Thursday. However, the court also ruled that the amount of severance pay will be determined according to Egyptian rather than Israeli labor law, since that applied to businesses operating in Gaza.

The panel of three judges – National Labor Court President Nili Arad, Judge Ronit Rosenfeld and Judge Sigal Davidow Motola – partially accepted an appeal by Israeli company Az- Rom Metalworks Ltd against an earlier ruling by the Beersheba District Labor Court. The lower court had ruled the Palestinians were entitled to severance pay from the company, but according to Israeli labor law. The court noted that Egyptian labor law sets a lower rate of severance pay than does Israeli law.

All of the 76 Palestinian workers had been employed by Az-Rom, which manufactured greenhouses in the Erez Industrial Park on the northern edge of Gaza. However, in the first half of 2004 the security situation in the region deteriorated as Palestinian terrorists perpetrated several attacks at the entrance to the industrial park and in the park itself.

As a result, the park suffered a series of closures, and when it reopened in June 2004, the quota of Palestinians granted entry permits was drastically reduced. Az-Rom was forced to downsize its Palestinian workforce from 142 to 20 workers and hire Israeli workers instead.

Constructed on state (non-private) land in the 1970s, the Erez Industrial Park was designed to provide employment for both Palestinian and Israeli workers.

In accordance with the 1995 Interim Agreement on the West Bank and Gaza Strip signed by Israel and the Palestinian Authority, the industrial park was under full Israeli control, and Palestinian workers required permits to enter.

However, the park’s location meant that Gaza residents working there did not have to cross the border into Israel, so their employment was not hindered by any security issues that might affect the border crossing.

By 2004, immediately prior to the terror attacks that led to the park’s temporary closures and the workers’ firings, over 4,000 Palestinians residents of Gaza worked in Erez’s 210 businesses.

Of those businesses, 117 were Israeli-owned, 91 were Palestinian-owned and two were joint ventures.

In 2006, Az-Rom’s former Palestinian workers successfully sued it for severance pay in the Beersheba District Labor Court, but the company appealed the ruling in the National Labor Court.

In that appeal hearing in the National Labor Court, Az-Rom said that the company had not actually fired the workers, but that their employment had been terminated for security reasons. Therefore, the company’s lawyers argued, Az-Rom should not have to compensate them.

In parallel, both Az-Rom and the state disagreed with the lower court’s ruling that the company was bound by Israeli labor law with respect to its operations in the Erez Industrial Park, arguing that Egyptian labor law applied in Gaza.

Egyptian law, they claimed, been in force prior to the IDF’s annexation of the Gaza Strip during the Six Day War in 1967 and continued to apply afterwards according to the law of military occupation.

Attorneys Gideon Holin and Jacob Danai for Az-Rom said that the Erez Industrial Park was “not an Israeli settlement” but “an industrial complex used by Israel and Palestinian factories and plants in equal number.”

Nonprofit groups the Resettlement Association in Nitzanim and the Agricultural Committee of Gush Katif, which added themselves as amicus curiae on the side of Az-Rom, argued that the 76 Palestinians were not entitled to severance pay, since Az-Rom did not fire them but was forced to terminate their employment because of Israel’s disengagement from Gaza.

However, lawyers for the Palestinian workers argued that the 76 Gazans were entitled to severance pay according to Israeli law, since they were employed by an Israeli employer in an industrial zone controlled by Israel.

The Palestinian workers required Israeli permits to enter the park, which was a sort of “Israeli enclave,” attorneys Nabil Atamna and Riyad Mustafa Hleihel said.

Attorney Riyad Mustafa Hleihel, representing the Palestinian workers, told The Jerusalem Post on Sunday evening that he and his colleagues planned to study the ruling in detail before deciding whether to appeal to the Supreme Court against the court’s decision that Egyptian labor law applied in the Erez Industrial Park.

“That would be the only avenue left open to us,” Hleihel said.

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