Company Ordered to Pay Former Employee Half a Million Shekels for Unpaid Reserve Duty Wages

An Israeli labor court has ordered Technoso Control Systems to pay former employee Arz Cohen approximately NIS 509,000, plus interest and legal costs, for unpaid wages and other entitlements. Cohen, who worked as Chief Technology Officer for the company, which develops smart parking management systems, was called for extended reserve duty following the October 7th Hamas attacks. While the company received state benefits for his service, it failed to pay Cohen his full salary for five months between February and June 2025, and also neglected pension contributions.

Cohen, whose family was evacuated from their home during his service, repeatedly approached the company's management to resolve the payment and pension issues. After his appeals were unsuccessful, he filed a lawsuit. He later resigned in August 2025 due to the non-payment of wages and the infringement of his social rights, subsequently filing another claim for severance pay and other benefits.

The company argued that the war severely impacted its business, leading to reduced income and cash flow problems. They claimed they had initially paid Cohen more than the state benefits received and were entitled to offset the difference. They also asserted that Cohen resigned without justification and that they had paid him all his dues.

The Regional Labor Court in Tel Aviv rejected the company's claims, ruling that the financial difficulties did not exempt them from their obligation to pay employees serving in reserves on time. The court found that the company had not proven any debt that justified withholding wages and had also failed to make full pension contributions, including deductions from Cohen's salary. The judge favored Cohen's account over the company CEO's, citing correspondence that indicated the company had previously waived its claim for salary reimbursement.

The court determined that the non-payment of wages and the violation of Cohen's rights justified his resignation, entitling him to severance pay. However, considering the company's economic struggles due to the war, the judge refrained from imposing penalties for delayed wages. In addition to the unpaid salary, the court awarded Cohen NIS 83,362 for severance pay, NIS 137,500 for vacation pay redemption, approximately NIS 59,000 for pension contributions, and NIS 15,000 for failing to provide proper payslips. Cohen also received NIS 25,000 for emotional distress stemming from the hardship he faced during his reserve service.