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Notice period in Israel

Employment termination in Israel

Post-termination restraints in Israel

Israel’s waivers in employment

Transfer of undertaking in Israel

Manage end of employment compliantly with CXC

End of employment in Israel

Employers navigating the end of employment in Israel must follow a structured process grounded in fairness, transparency, and statutory compliance. Israeli labour law places significant emphasis on protecting employees during transitions, which means employers need to manage each separation carefully, whether it involves redundancy, performance issues, organisational restructuring, or employee resignation.

The end of employment contract in Israel is never an automatic or informal step. Employers must begin with a pre-termination hearing, known as a shi’mui, where the employee is informed of the reasons for the proposed termination and given an opportunity to respond. This hearing must be conducted in good faith, with real consideration given to the employee’s explanations. Only after this stage can an employer make a final and lawful decision.

Notice periods also play an important role. The length of notice required depends on the employee’s seniority, and employers can either require the employee to work through this period or provide payment in lieu of notice. Additionally, employees who have completed at least one year of service are generally entitled to severance pay, unless an approved exception applies. Employers are also responsible for calculating and settling accrued rights, such as unused annual leave, recuperation pay, and any remaining salary.

At the end of employment in Israel, certain protections prevent termination during legally safeguarded periods, including parental leave, reserve duty, recovery from an injury, or specific health-related circumstances. Employers must also comply with any collective agreements or workplace customs that may expand obligations beyond statutory minimums.

For global organisations, managing these requirements can be complex. Partnering with an expert like CXC as an employer of record can help ensure full compliance and reduce administrative burdens, particularly when handling multiple employment transitions across different jurisdictions.

Notice period in Israel

Employers hiring in Israel will find that termination procedures are shaped by clear statutory rules designed to support predictability and fairness in the workplace. The structure of the notice period in Israel governs how both employers and employees may end an employment relationship, and it is closely linked to seniority, contract terms, and specific legal safeguards.

These rules are supported by Israel’s labour law about notice period, which outlines minimum timelines and establishes protections designed to reduce abrupt workforce disruptions.

Notice period in Israel law

The national framework is set out in the Law on Advance Notice of Dismissal and Resignation, which applies to both parties. Notice must always be provided in writing, specifying the effective date of termination. The length of the required notice depends on the employee’s type of pay structure and their tenure.

For monthly salaried employees, the statutory notice period in Israel is calculated as follows:

During the first 6 months of employment, the requirement is 1 day of notice per month worked.
From the 7th to the 12th month, employees accrue a base of 6 days of notice plus 2.5 additional days for each full month beyond the sixth.
After completing 1 year of service, the notice requirement becomes a full 30 days.

Hourly and daily workers follow a slightly different calculation, but the statutory maximum remains 30 days after three years. Employers may choose payment in lieu of notice by providing full wages for the notice period while ending active work immediately. Longer contractual notice periods may be mutually agreed, but shorter periods than the statutory minimum are not permitted. As with all dismissals, a pre-termination hearing (tishma) remains mandatory.

Probation period in Israel

A probation clause can be included in the employment contract, but employees in probation are still protected by all statutory rights from their first day. The probation period does not remove an employer’s obligations related to the notice period in Israel law, but it does typically allow for easier termination, provided the employer conducts a proper hearing and follows the shorter notice rules that apply in the early months of service.

Common probation lengths range from three to twelve months. During this time, employees continue to accrue annual leave, sick leave, social contributions, and all other mandatory rights. The primary benefit for employers is reduced evidentiary burden when ending employment for reasons of performance or suitability.

Severance pay in Israel

The laws governing severance pay are closely tied to the length of service. Under the Severance Pay Law, employees who are dismissed after one year of employment are entitled to severance calculated at one month of salary for each year worked, including partial years. Employers who adopt the Section 14 Arrangement contribute 8.33% of monthly salary into the employee’s fund each month. Under this arrangement, the employee receives the full accumulated balance at termination, even if they resign without legal justification.

Employers must ensure that severance obligations, notice requirements, and hearing procedures are all followed correctly, as these are core elements of employment termination compliance in Israel.

Employment termination in Israel

Employers operating in Israel must follow structured and transparent procedures when ending an employment relationship. The rules governing employment termination in Israel prioritise fairness, good faith, and compliance with statutory requirements. These obligations stem from long-standing labour legislation and extensive case law, making procedural accuracy just as important as the reasons behind a dismissal.

For organisations hiring local teams, respecting Israel’s employment law on termination is key to avoiding disputes and ensuring a dignified process for both parties.

Israel’s employment law on termination

Israeli termination rules are built on several core principles, with the most significant being the right to a fair pre-termination hearing (shi’mui). Before any decision is taken, the employer must invite the employee to a hearing in writing, clearly outlining the intended reasons for dismissal. This invitation must allow enough time for the employee to prepare. During the hearing, the employee should be given a genuine opportunity to respond, present their perspective, and bring a representative if they wish.

Only after the hearing ends should the employer reach a final decision, based on good-faith consideration of the points raised. The result must be communicated in writing, typically within 48 hours. Courts have emphasised that termination decisions must be proportionate, justified, and free from discrimination.

Notice periods are governed by the Law on Advance Notice of Dismissal and Resignation. Employers must provide written notice reflecting the employee’s seniority or may offer payment in lieu of notice. However, employers are prevented from dismissing employees during certain protected periods, such as parental leave, military reserve duty, or certified sick leave.

Employees with at least one year of continuous service are generally entitled to severance pay. This is commonly fulfilled through monthly contributions of 8.33%under the Section 14 Arrangement, which allows the employee to receive the full balance upon termination.

Best policies and practices during employment termination in Israel

To implement compliant and professional termination processes, employers should adopt several best practices. The process begins with ensuring that any dismissal is based on a legitimate business reason, whether related to redundancy, performance, or conduct. Employers must maintain documentation that supports the rationale behind the decision.

The pre-termination hearing should follow strict procedural standards: clear written notice, adequate preparation time, a respectful meeting, and objective evaluation of the employee’s response. Employers should also check whether the employee is within any protected category before proceeding.

Upon termination, provide a clear written notice confirming the final employment date, the notice period or payment in lieu, and any final compensation owed. This usually includes unused annual leave, recuperation pay, and severance pay where applicable. Arrange the return of company property and manage administrative offboarding steps in a structured way.

Maintaining confidentiality throughout the process is crucial. Termination details should only be shared internally with individuals who have a legitimate operational need to know. Many employers also choose to offer support measures, such as outplacement assistance, which can reduce conflict and help protect the organisation’s reputation.

A well-run termination process, aligned with employment termination in Israel template standards, ensures compliance, fairness, and continuity, helping employers maintain trust and minimise legal exposure when navigating workforce changes in Israel.

Post-termination restraints in Israel

Non-compete clause contract in Israel

The topic of post-termination restraints in Israel is defined by a legal framework that strongly favours an employee’s constitutional right to freedom of occupation. As a result, non-compete clauses in contracts are generally difficult to enforce. While many employers include them as standard practice, Israeli labour courts rarely uphold them unless the employer can demonstrate a clear and legitimate business interest that requires protection.

Under Israeli case law, non-compete provisions in Israel may be enforced only in exceptional circumstances. Courts typically recognise four legitimate grounds: the protection of genuine trade secrets, significant and unique employer-funded training, special financial consideration provided to the employee in exchange for the restriction, or clear evidence of bad-faith behaviour by the employee that could harm the organisation. Even when these conditions exist, the restriction must be narrowly defined in scope, geography, and duration, typically limited to six to twelve months. Overly broad clauses are not upheld, although courts may adjust them to make them reasonable rather than striking them down entirely.

Given the strict judicial approach, employers are encouraged to prioritise confidentiality agreements, data protection policies, and well-structured safeguarding mechanisms that focus on protecting proprietary information rather than restricting general employability. These tools are easier to enforce and better aligned with the principles of Israeli employment law.

Non-solicitation agreement in Israel

Compared with non-compete clauses, a non-solicitation agreement in Israel is far more likely to be upheld, provided it is drafted reasonably and protects a legitimate employer interest. Non-solicitation clauses typically fall into two categories: restrictions on soliciting customers and restrictions on soliciting employees. Both are generally accepted by Israeli courts when tailored correctly.

Customer non-solicit clauses are intended to protect commercially valuable client relationships developed by the employer. These clauses prevent former employees from approaching, enticing, or attempting to move clients to a competing business, particularly when the employee had substantial direct contact with these clients or access to confidential customer information. The usual enforceable duration is no longer than twelve months.

Employee non-solicit clauses, which prevent former employees from recruiting colleagues, are similarly accepted. Courts often view these provisions as necessary to maintain organisational stability, especially in industries with strong competition for skilled talent. As with customer restrictions, the terms must be reasonable in duration and scope.

To maximise enforceability, employers should clearly define what constitutes “solicitation,” identify which clients or employees are protected, and set a proportionate time limit. Including a severability clause allows courts to modify an excessive restriction without invalidating the entire agreement.

Israel’s waivers in employment

Employers operating in Israel often encounter questions about what types of waivers are legally enforceable when drafting employment contracts, termination agreements, or settlement documents. While waivers can be a useful tool for resolving disputes or concluding employment relationships, Israeli labour law places strong limitations on what employees may legally waive. This protective framework means employers must exercise caution when designing any Israel waiver provisions to ensure that they comply with statutory requirements and established case law.

Inalienable statutory rights in Israel

Employment law in Israel is built on the principle that certain rights are mandatory and cannot be waived by agreement, even if the employee appears to consent. Any clause attempting to remove or reduce these rights will not be enforceable. This rule applies regardless of whether the waiver appears in an employment agreement, a termination document, or a signed settlement.

The following statutory rights are considered inalienable:

Minimum wage, regulated by national law.
Statutory limits on working hours and compulsory rest periods.
Paid annual leave, sick leave, public holidays, and recuperation pay.
Severance pay for employees with at least one year of service.
Mandatory pension contributions and National Insurance payments.
Legally required notice periods for dismissal or resignation.
Protection from discrimination on grounds such as age, gender, religion, nationality, sexual orientation, or parental status.

Because these rights are mandatory, employers cannot request or pressure employees to waive them. Any such attempt would be void under Israeli law.

Best practices when enforcing employment waivers in Israel

Where rights have already accrued or are genuinely in dispute at the time of termination, an employee may voluntarily waive them as part of a settlement, provided that strict legal conditions are met. These waivers can be enforceable if handled correctly.

Key considerations for employers include:

Clear documentation: The waiver must be written, specific, and fully understood by the employee.
Voluntary consent: The employee must sign freely, without coercion or inappropriate pressure.
Transparency: Employers should provide a detailed breakdown of all payments included in the settlement, including statutory entitlements and additional compensation.
Additional consideration: Courts are more likely to enforce an employment waiver if the employee receives an ex-gratia payment or benefit that is clearly linked to the waiver.
No conditioning of statutory rights: Employers cannot make statutory entitlements contingent on signing a waiver.

Following these practices increases the likelihood that the waiver will be respected by Israeli labour courts while maintaining positive employee relations.

Visa waiver program in Israel

Although separate from employment matters, employers recruiting international talent occasionally need to understand the visa waiver program in Israel, especially when coordinating travel for short business visits.

Israel maintains a broad visa-exemption policy for citizens of many countries, allowing stays of up to 90 days for tourism and business. As of January 2025, travellers from visa-exempt countries must obtain an Electronic Travel Authorisation (ETA-IL) before their arrival.
Key features of the system include:

Online application submitted prior to travel.
Recommended submission at least 72 hours ahead of arrival.
Validity of up to two years or until passport expiry.
A fee of 25 ILS per visitor.

Israel’s participation in reciprocal agreements, such as the United States Visa Waiver Program, further supports cross-border business travel. While these systems do not directly affect employment contracts, employers should be aware of them when managing international mobility.

By understanding the limits of enforceability and applying best practices, employers operating in Israel can make effective use of waivers while remaining compliant with the country’s protective labour laws.

Transfer of undertaking in Israel

When a business is sold, merged, or its assets are transferred, employers in Israel must navigate a distinct and employee-centred legal framework. The core principle that guides the transfer of undertaking in Israel is that employees cannot be moved to a new employer without their explicit agreement. This means both the seller and buyer must approach the transition with clear communication, proper documentation, and respect for employee rights.

Employee transfer policy in Israel

The employee transfer policy in Israel is built on the idea that employment relationships are personal and cannot be assigned without the employee’s consent. Unlike the European TUPE model, Israeli law does not mandate an automatic transfer of employees when ownership changes.

Key legal principles in Israel

No automatic transfer: Employees do not automatically join the new employer after a sale or merger. Instead, the buyer must extend an employment offer directly.
Employee consent: An employee must explicitly agree to transfer. Without consent, the employee remains employed by the seller.
Employer obligations: If the employee refuses to move to the buyer, the seller must either continue the employment or follow standard termination procedures, including a pre-termination hearing and severance pay if the employee is eligible.

Transfer methods in Israeli Mergers and Acquisitions

There are two common approaches to implementing the transfer of undertaking in Israel:

1. Fire-and-rehire approach

The seller formally terminates the employee’s contract, paying all accrued rights such as severance pay and unused annual leave.
The buyer then rehires the employee with a fresh employment agreement.
This method allows the buyer to avoid inheriting historical liabilities but may also prompt employees to negotiate improved terms.

2. Continuity of rights approach

The buyer and employee agree that the buyer will assume the existing employment relationship.
The employee retains seniority, accrued rights, and continuity-based benefits.
This requires explicit written agreements between the seller, buyer, and employee, ensuring clarity regarding preserved rights.

Additional considerations

Collective agreements: Unionised environments require consultation with employee representatives, and sometimes formal negotiations.
Pre-termination hearings: If a role becomes redundant or an employee declines transfer, employers must conduct a proper pre-termination hearing before making any final decision.
Due diligence: Buyers should conduct thorough labour due diligence to understand seniority-based obligations, accrued liabilities, and potential risks that may accompany the business transfer.

Best practices during transfer of undertaking in Israel

Employers can minimise risk and ensure compliance by adopting the following practices:

Provide transparent communication: Employees should receive early and clear explanations about how the transfer affects their employment.
Prepare detailed written offers: New employers should issue precise employment offers that outline salary, role, benefits, and how seniority will be treated.
Document consent carefully: Employee consent must be explicit and in writing. Agreements should avoid vague or overly broad terms.
Align with legal counsel: Because employment transfers affect statutory and contractual obligations, consulting legal experts helps ensure that agreements comply with Israeli labour law.
Manage employee expectations: Offering retention bonuses, transitional support, or improved terms may strengthen employee confidence during the change of ownership.

By framing the process carefully and respecting employee rights, companies can complete business transfers smoothly while ensuring full compliance with Israeli employment law.

Manage end of employment compliantly with CXC

Ending an employment relationship in Israel requires a careful and structured approach. Employers must follow formal steps that include a pre-termination hearing, proper notice, and accurate calculation of final entitlements. These protections ensure employees are treated fairly and that the process reflects both legal and procedural expectations.

With CXC, we can help you handle the entire offboarding process. We manage the documentation, meet all statutory requirements, and make sure every transition is handled fairly and consistently.

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