Israeli Labor Court Rules Written Consent Required for Teacher Salary Deductions for Charity Donations

The Israeli National Labor Court issued a ruling on April 3 regarding a class-action lawsuit about a 2% salary deduction from teachers at the Independent Education Center, transferred to the "Torah Education Fund" charity. The court established a key principle that written consent is essential for deducting employee wages for donations. However, it did not definitively rule on the legality of the deductions in this case and sent several issues back to the Tel Aviv Regional Labor Court for further examination.

The lawsuit was filed by teachers Hannah Rivka Hartman and Tamar Melrich, who claimed that for years, 2% of their salaries were deducted without written consent and transferred to the charity. Until early 2021, most deductions occurred without written approval. The Independent Education Center argued that the deductions were linked to calls from leading Torah authorities to donate, reflecting a religious obligation to tithe income within the ultra-Orthodox community.

After legal counsel challenged the deductions in January 2021, the employer sought written consent from about 6,000 teachers; approximately 20% opted to stop the deductions. The Regional Labor Court initially ruled that the deducted funds qualified as "donations" under the Wage Protection Law, considering the ultra-Orthodox community's characteristics and the 1953 call by the Council of Torah Sages to support independent education through donations. It also found that the funds were used mainly for enrichment classes and welfare activities for students in needy institutions.

The State Attorney and Government Legal Advisor intervened, questioning whether the charity fund was truly separate, alleging it functioned as a "petty cash" for the Independent Education Center's routine expenses, including legal fees, municipal payments, salaries, and building maintenance. This was supported by testimony and financial reports.

On appeal, the National Labor Court overturned the Regional Court's ruling on the necessity of written consent, emphasizing that under the Wage Protection Law, written consent is a substantive requirement, not merely evidentiary. The court explained that wage protection laws safeguard the employee's right to receive their salary, and donations from wages are akin to gift commitments requiring written agreement. However, the ruling did not mandate the Independent Education Center to refund all deducted funds outright, noting that retroactive written consent might legitimize the deductions.

The court left unresolved whether the deducted sums legally constitute "donations" given the fund's connection to the Independent Education Center and how the money was used. It also deferred ruling on the timing of the corrective measures taken by the employer, whether January 1, 2021, or June 1, 2022, pending further findings. The case was returned to the Regional Labor Court for continued proceedings without a final stance on the outcome. The ruling was delivered by a panel including Acting President Ilan Itach, Judges Roy Polyak and Hani Ofek Gendler, and public representatives Verda Edwards and Dubi Ram.