Court Rules Former Executive Was a Freelancer, Awards Him $55,000

A former VP of Marketing and Sales at industrial refrigeration company G.V. Kirur, Ronen Horvitz, sued for nearly $400,000, claiming he was an employee for nine years. Horvitz, who sat on the management team and managed staff, argued he was a senior employee and sought benefits like a pension, severance pay, and vacation pay. He had submitted invoices throughout his tenure and never had a written contract.

However, the Regional Labor Court in Be'er Sheva, presided over by Judge Avigail Borovitch and public representatives Salim Riatha and Shalom Shimon, ruled that Horvitz was an independent service provider. Despite this, the court ordered G.V. Kirur, a private company with about fifty employees, to pay Horvitz NIS 200,000 (approximately $55,000).

Horvitz had been a licensed independent contractor since 2005. The company's owner met him in 2013 and initially hired him for consulting and mentoring at his own set rate of NIS 450 per hour plus VAT, for 20-30 hours monthly. In May 2015, an agreement was made for him to serve as VP of Marketing and Sales, but this was never put in writing, and the arrangement continued until 2024.

Horvitz claimed he was a senior employee, "well integrated into the core business," "a man of trust and right-hand man" to the owner, with authority to hire and fire, participation in management meetings, and company-provided equipment and training. G.V. Kirur countered that he was always an independent contractor, had his own business for a decade prior, was free to work with others, and had additional income sources.

The court applied the integration test, weighing Horvitz's senior role and management duties against his status as a long-standing independent contractor, his self-determined rate, and the fact that marketing was a support function, not the core business. The court also noted that his wife and son were employed by the company, and Horvitz knew the terms of their employment but did not seek similar status for himself, deeming this conduct inconsistent with good faith.

The court rejected claims for pension, vacation pay, severance, and other benefits. The NIS 200,000 award comprised NIS 20,000 for an additional month's payment agreed upon by the owner, NIS 80,000 as non-pecuniary compensation for the nearly decade-long engagement without a written contract, and NIS 100,000 as a commission for 2023, based on the company's acknowledgment and a promise to settle the matter. Horvitz was ordered to pay the company NIS 50,000 in legal expenses due to the significant disparity between his claim and the awarded sum.