IsraelLawIsrael's labor relations system is deeply shaped by its history of collective bargaining. The Histadrut, founded in 1920, remains the dominant labor federation and has negotiated sector-wide agreements that affect millions of workers. For foreign nationals, understanding this system can reveal entitlements that never appear in the individual employment contract.
1. Overview of Collective Labor Law in Israel
Israeli collective labor law is primarily governed by the Collective Agreements Law 5717-1957 and the Labor Courts Law 5729-1969. The system recognizes two types of collective agreements:
- Special collective agreements: Binding on a specific employer and the union or unions representing its employees. Apply only to workers of that employer covered by the agreement.
- General collective agreements: Negotiated between employer federations (such as the Manufacturers Association or the Federation of Israeli Economic Organizations) and the Histadrut at the sector or economy-wide level. Once an extension order is issued, they apply to the entire sector.
2. The Histadrut and Israel's Union Structure
The Histadrut (HaHistadrut HaKlalit shel HaOvdim B'Eretz Yisrael — General Federation of Labor in the Land of Israel) is by far the largest labor federation in Israel. It represents approximately 800,000 members and its affiliated unions cover most major sectors including public service, manufacturing, healthcare, transportation, and banking.
Membership in the Histadrut is open to employed persons in Israel, including foreign nationals with valid work permits. Membership dues are deducted from salary where the employer is covered by a Histadrut agreement. Union membership provides access to the Histadrut's legal aid services, labor court representation, and collective bargaining protection.
Several independent unions exist outside the Histadrut in specific sectors, including the Engineers Union, the Doctors Association, and sector-specific unions in higher education and the arts.
3. How Collective Agreements Work
A collective agreement binds the employer and the employees covered by it. The agreement may provide better terms than the statutory minimum in areas such as:
- Higher minimum wage for the sector
- More annual leave days than the statutory minimum
- Better sick pay terms (e.g., full pay from day one)
- Sector-specific allowances (travel, meals, clothing)
- Improved pension contribution rates
- Specific procedures for dismissal and redundancy
The individual employment contract cannot undercut the terms of an applicable collective agreement — the collective agreement floor applies in the same way as statutory minimums. Where the individual contract is more generous than the collective agreement, the better individual terms apply.
4. Extension Orders: How They Apply to Foreign Workers
An extension order (tzav harchava) is a government order issued by the Minister of Economy that extends a collective agreement to cover the entire sector — not just unionized employers and their employees. Extension orders are common and cover many of the sectors in which foreign workers are concentrated:
- Cleaning and maintenance: Extension orders set minimum wages above the statutory minimum, specific allowances, and enhanced sick pay terms for all cleaning workers regardless of employer.
- Security and guarding: The security sector extension order provides sector-specific wage scales, shift differentials, and allowances.
- Hospitality and hotels: Extension orders set terms for hotel workers including premium pay for Shabbat and holiday work.
- Construction: The construction sector agreement provides specific rates for different categories of construction work, applicable to foreign construction workers under bilateral programs.
- Caregiving: Foreign caregivers are covered by specific regulations and collective terms governing accommodation, working hours, and medical coverage.
Because extension orders apply to the sector as a whole, a foreign worker employed in one of these sectors is automatically entitled to the extended terms — even if their employer is not a party to the original collective agreement and even if the individual employment contract does not mention the extension order. The extension order simply overrides the individual contract on any matter it covers where the contract is less favorable.
5. Foreign Workers and Union Rights
Foreign nationals with valid work permits in Israel have the right to join the Histadrut and other unions. There is no legal prohibition on union membership for foreign workers. In practice, membership is less common among foreign workers due to language barriers, short-term employment, and lack of awareness — but the right exists.
Workers' committee rights (vaad ovdim) apply in workplaces with organized employees. Foreign workers employed in a unionized workplace are covered by the workers' committee activities even if they are not themselves union members.
6. Practical Implications for Foreign Workers
The most practically important consequence of the collective agreement system for foreign workers is this: check whether an extension order applies to your sector before assuming you are only entitled to the statutory minimum.
To find out if an extension order applies to your work:
- Ask your employer directly — they are required to disclose any applicable collective agreement in your written employment terms under the Notice to Employee Law 2002.
- Consult the Ministry of Labor's database of extension orders (available in Hebrew on the Ministry website).
- Contact an employment lawyer who can review your pay slips and employment terms against any applicable extension order.
If you discover that an extension order applies to your employment and you have been receiving less than its terms require, you have a claim for the difference — potentially going back up to seven years under the limitation period for employment claims.