Israeli Court Approves Class Action Against Rami Levy Supermarkets Over Wage Deductions

A labor court in Jerusalem has approved a class-action lawsuit against the Rami Levy supermarket chain, alleging violations of the Wage Protection Law. The lawsuit claims the company illegally deducts cash register shortages from employees' salaries. The court found a "reasonable probability of a comprehensive decision in favor of the cashiers" regarding the alleged violation of the Wage Protection Law.

Representative plaintiffs Meir Edri and Baruch Shaaltiel, former cashiers at the chain, argue that when shortages are discovered at the end of shifts, the amounts are deducted from their wages, which they contend is against the law. They seek for the company to cease these deductions, return the collected funds, and compensate for related social benefits.

The supermarket chain argued that it was legally permitted to deduct employee debts, as the employee had consented to the deduction. However, the court ruled that the term "debt" in the law does not encompass cash register shortages. The court noted that employees often consent to such deductions as a condition of employment, raising questions about the validity of that consent. Furthermore, evidence showed that undue pressure is applied to secure consent for wage deductions when shortages are found.

The central dispute revolved around whether the definition of an employee's "debt" under the Wage Protection Law, which allows deductions based on a written commitment from the employee, includes compensation for cash register shortages. Rami Levy contended that these shortages were fixed amounts discovered after an investigation and that the employee had agreed to the deduction. The court determined that shortages found in a supermarket's cash register cannot be considered such a debt and that the law does not empower employers to hold employees responsible for damages they may have caused.

The court established that deductible debts must be fixed, proven, and undisputed between the employee and employer. The chain's interpretation that deductions were made based on an employee's initial commitment or post-shortage agreement was rejected. Examples of situations leading to shortages included errors in cash and credit transactions for the same purchase, customers passing counterfeit bills, or mistakes in giving change. The court stated that the need for complex investigations does not align with the concept of automatic wage deductions for such cases, raising concerns that an employer's superior power could lead to unfair deductions.

While the court acknowledged that Rami Levy demonstrated discretion, with instances where employees were not ultimately charged for shortages after signing deduction forms, it found that most examples did not show the company absorbing the losses. Instead, the company often offset shortages through over-collection or by identifying the customer. The ruling concluded that the chain does not account for its potential role in shortages and imposes absolute responsibility on the employee, potentially due to insufficient training or pressure from customers, which can lead to human error. The class is defined as cashiers who worked for the chain in the seven years preceding the lawsuit's filing. Rami Levy will pay NIS 25,000 in legal fees and NIS 8,000 to the representative plaintiffs.