Israeli Court Awards Former Vape CEO Additional NIS 15,700 After Recalculating Severance

Israel's National Labor Court has ordered Sweet Spot Vape to pay its former CEO an additional NIS 15,700, after recalculating his severance pay based on gross salary rather than net. The Tel Aviv Regional Labor Court had initially calculated the former CEO's entitlements based on a net salary of NIS 12,500, but the National Court, on October 16, revised this to a gross salary of NIS 15,808. This adjustment increased his severance pay from NIS 4,516 to NIS 12,025, vacation payout from NIS 11,928 to NIS 16,808, and March 2021 salary differentials from NIS 8,080 to NIS 11,388. In total, he is to receive approximately NIS 58,000 before interest.

The former CEO, who managed the company's tobacco product stores from August 2018, claimed his actual salary was significantly higher than reflected in his payslips, with a portion paid in cash or bank transfers. He had sued for NIS 150,000 based on an alleged employment contract, NIS 50,000 for wrongful termination, and NIS 50,000 for missed pension fund contributions. Sweet Spot Vape, a distributor of e-cigarettes and a franchisee for Swiss company "Y.E. Project," argued that no contract was signed and that payments received by the CEO were for brand promotion, not salary.

The dispute escalated following an incident on March 31, 2021. The former CEO alleged he was summoned to open a warehouse and then abruptly told to leave by the Swiss company's owner. The company, however, claimed he was absent from work for ten days after responding defiantly when asked about his whereabouts. Subsequently, he was placed on unpaid leave and later offered new employment terms, which he refused. The company counter-sued for approximately NIS 259,000, including legal expenses and alleged overpaid commissions.

Both the regional and national labor courts ruled that the former CEO was terminated. The regional court dismissed the company's counter-suit, finding no proof of a signed contract or salary payments beyond the payslips. The national court upheld these findings, agreeing that the refusal to continue employing the CEO under previous terms after a May 9 meeting constituted a dismissal. The company's appeal regarding 21 days of vacation payout was also rejected, as the notice for the leave was not given 14 days in advance as required by law.