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