Court Awards Salesman Half a Million Shekels for Unpaid Overtime and Commissions

The Regional Labor Court in Tel Aviv has awarded approximately NIS 500,000 to a former salesman, Avraham Rachmani, who was dismissed after three years of employment. The court ruled that his employer, Kuli K.A. Manofim Ltd., failed to pay him all his due rights, primarily concerning unpaid overtime and the exclusion of sales commissions from his salary calculations. The awarded sum will also include interest, linkage, and NIS 40,000 in legal expenses.

Rachmani had sued the company for NIS 876,000, alleging he did not receive full payment during his tenure. He initially earned a base salary of NIS 14,000 gross per month plus commissions, with a guaranteed minimum total income of NIS 22,000 gross in his first months. His salary structure was later altered, reducing his base pay to NIS 7,000 while increasing commission rates.

His dismissal followed a conversation with a client about payment terms, during which Rachmani mentioned the possibility of legal action against the company. The client subsequently sued and won, leading to Rachmani's termination.

Rachmani claimed he worked long hours, typically from 8 a.m. to 8 p.m., without overtime pay, and that his salary terms were changed without proper notification. He also argued that his social benefits were calculated based on a lower salary than agreed upon.

The court rejected the company's defense that Rachmani's field sales role made monitoring his hours impossible, thus disqualifying him from overtime pay. The court found that his work hours could have been monitored, especially since many meetings were pre-scheduled, and that modern technological tools are available for such oversight. Consequently, Rachmani was awarded over NIS 300,000 for unpaid overtime.

Furthermore, the court determined that sales commissions were an integral part of Rachmani's regular salary and should have been included in overtime calculations. "The commissions were paid to the plaintiff from the first shekel, without any condition other than performing sales work, which is the plaintiff's regular work, and the commission rate significantly exceeded the base salary paid to the plaintiff," the ruling stated.

Advocate Avi Mor Yosef, representing Rachmani, called the ruling a significant step in rectifying a long-standing injustice where employers use commission structures to evade full social benefit payments.