Holiday Gifts — Not Required, But Not Simple
Imagine you run a small business. Over the years, as an act of goodwill, you decided to give your employees holiday gifts. It started as a small gesture of appreciation, but over time it became a custom. Suddenly, after a few years, you find yourself considering stopping this practice. How will your employees react? Will they see it as a deterioration of their conditions?
What Do the Courts Examine?
When it comes to holiday gifts, Israeli law does not mandate employers in the private sector to provide them. However, once you start giving gifts regularly, it can become a binding custom. This means that if you decide to stop giving gifts, employees might claim that you have worsened their conditions, and courts might see this as a legitimate claim.
Regarding the value of the gift, it's important to understand that if you provide different amounts to employees with different tenures or for different performances, it can be considered discrimination. Courts examine whether this is unjustified discrimination or if there is a professional justification.
Therefore, it is recommended to establish a clear and agreed-upon policy regarding gifts to avoid potential lawsuits in the future. It is important that the policy is transparent and ensures equal treatment among employees.
When Is It Relevant — Checklist
- ✓Have you started giving holiday gifts regularly?
- ✓Do employees see gifts as part of their employment terms?
- ✓Are there differences in the value of gifts between different employees?
- ✓Do you have a clear policy regarding gifts for employees?
The Standard Contracts Law
The Standard Contracts Law stipulates that a custom that is consistently practiced may be considered part of the employment terms. This means that if you started giving holiday gifts, it can become part of the unwritten contract with the employees. Violating such a custom, meaning stopping the gift-giving, may lead to a claim for worsening conditions.
In such a case, employees can turn to the labor court and demand compensation for the deterioration of conditions. Therefore, it is important to be aware of the legal situation and act accordingly.
Questions Everyone Asks — But No One Asks the Lawyer
Real Situations — Which Side Are You On?
- An employer who gave holiday gifts to employees for ten years and decided to stop without notice — might be considered worsening conditions.
- A company that gives gifts only to long-standing employees, while newcomers receive less or nothing — may be considered discrimination if no clear justification exists.
- A small business that gives gifts only in special cases or to outstanding employees — less risk of being considered a binding custom.
What to Do Right Now
First, review your policy regarding gifts for employees. If you don't have one, it's time to establish a clear one. Discuss this issue with employees and consider creating a written agreement that will protect you.
If you do nothing and the problem escalates, you might face legal claims and significant financial expenses. Contact us at S-Law for legal advice to help you avoid this.