"There is no avoiding the conclusion that Migdal and Eliahu are continuing to grossly violate and show contempt for the explicit court order banning them from approaching employees over unionization. Therefore, I believe that there is no choice but to issue orders against them pursuant to the Contempt of Court Ordinance." Thus Tel Aviv Labor Court Judge Dori Spivak ruled on Monday evening against Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and its chairman and controlling shareholder, Shlomo Eliahu. This is apparently the first time in the history of Israel's labor courts that a Contempt of Court Ordinance has been ordered against an employer.
In the ruling, Judge Spivak accepted the Histadrut's (General Federation of Labor in Israel) claim that Eliahu was in contempt of the labor court orders banning him from approaching employees, directly or indirectly, over their unionization. Eliahu sent a letter to Migdal's employees, in which he "advised" them to hold elections on the question if they wished to unionize, even though half of the employees (more than the proportion required by law) have already joined the Histadrut, which for its part, announced that it was the representative union at the company.
Judge Spivak rejected the Histadrut's motion to fine Eliahu NIS 200,000 per day retroactively for the violation from the date of the last letter to the employees (January 9, 2014), but he levied "a prospective fine" for each violation against the Contempt of Court Ordinance starting from 2 pm today. This means that any direct or indirect approach to Migdal employees about the unionization by Migdal or by Eliahu personally will incur a NIS 200,000 fine. Migdal and Eliahu were also ordered to remove every letter or other approach to employees on this matter from the company's Internet portal.
Judge Spivak dismissed Eliahu's claim that he acted in "good faith", because he was advised by legal counsel over the wording of his letter to the employees. The judge ruled that even if this was a case of "wrong, unreasonable, or illogical advice", he could not allow employers to avoid paying fines for contempt of court merely because they sought legal advice.
Judge Spivak slammed Migdal and Eliahu, saying, "There is no avoiding the obvious and unequivocal, and I allow myself to add dismal, conclusion, that Migdal and Eliahu chose to act in bad faith, deliberately and with foreknowledge, to violate and show contempt of the court order."
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2014
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