A general rule in Israeli employment law is that employees are entitled to receive either appropriate advance notice of dismissal or else payment in lieu of advance notice, in an amount equal to the salary the employee would have received had the employee continued working throughout the advance notice period.
The Israeli National Labor Court ("Court") has now clarified that this general rule also applies to dismissals due to a change in employer, even when the employee continues to work at the same business under the new employer, following its purchase of the previous employer's operations and business.
In the case at hand, the appellant employees were dismissed by their employer when company operations were sold to a third party that continued the company's business and continued to employ the appellants. Immediately prior to the change of ownership the appellants were provided with a notice of dismissal and severance pay. However, they did not receive any payment in lieu of advance notice.
The Court held that an employer's obligation to provide advance notice of dismissal or payment in lieu of advance notice also applies when an employee is dismissed due to a change in employer. The Court explained that even where a target's employees are guaranteed employment with the new employer, employee consent is still required. The Court noted that employers wishing to avoid payment in lieu of advance notice simply need to provide appropriate advance notification.
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