Court Rules Daughter Was Employee, Not Owner, Entitled to Unemployment Benefits
A labor court has ruled that Sapir Gigi, who managed her mother's family restaurant in Modi'in between March 2020 and June 2022, was an employee and is therefore eligible for unemployment benefits. The National Insurance Institute had denied her claim, arguing that Gigi's extensive responsibilities, including managing bank accounts, suppliers, and staff, and being the sole authorized signatory, indicated she was effectively an owner, not an employee. The Institute also pointed to her pay slips being issued retroactively and discrepancies in bank deposits.
Gigi and her mother, Sharon Ronit Gigi, argued that Sapir acted as the "technical hands" for her mother, who has learning disabilities and struggles with administrative tasks. They explained that her role was clearly defined as managing the front-of-house operations, customer service, and administrative duties, while her mother handled the cooking and overall business decisions. The mother's medical condition, including ADHD and OCD, made it difficult for her to manage banking and digital systems.
The court found that two conditions for establishing an employer-employee relationship were met: Gigi performed essential, ongoing work that would have required another employee if she hadn't done it, and when she initially left to study, another worker was hired to replace her. The court also stated that lump-sum payments and a lack of timesheet records do not, in themselves, negate an employment relationship. Gigi's significant salary increase in early 2022 was attributed to her increased workload after her father's death, not a change in ownership status.
Crucially, when the restaurant was sold in April 2022, only the mother signed the sales contract, and Sapir received none of the proceeds, further supporting her claim of not being an owner. The court ruled in favor of Gigi, ordering the National Insurance Institute to pay her unemployment benefits and 6,000 shekels in legal costs.
