If you’re leading People Ops, HR, or Talent Acquisition at a fast-growing company expanding into Israel, you know that employment termination is never just about paperwork or process. It’s about people, compliance, and protecting both your team and your business, often in a legal landscape that feels unfamiliar and high-stakes.

That’s why we’ve created this employment termination guide for Israel: to give global HR leaders like you a clear, step-by-step resource. Here, you’ll find practical insights, actionable checklists, and the empathy that comes from walking in your shoes. Our mission at Borderless AI is to empower global teams and unlock opportunity everywhere, ensuring that your talent and compliance strategies work in harmony, no matter where you hire.

Let’s make employment terminations in Israel less daunting and more human.

Understanding Israeli Employment Law: Why Getting it Right Matters

Israel’s employment law isn’t just thorough, it’s purposefully protective. Unlike some countries where “at-will” employment is the norm, Israel requires a valid, documented reason for every termination. This framework is designed to ensure fairness, and it’s enforced rigorously.

For global HR teams, this means:

  • You must always have a lawful, objective reason for dismissal, think performance, conduct, or business necessity.
  • Following the right process is as important as having the right reason; skipping steps can invalidate even a justified termination.
  • You’ll need to navigate multiple laws, including:
    • Prior Notice for Dismissal and Resignation Law (2001) for notice periods
    • Severance Pay Law (1963) for end-of-employment payments
    • Equal Opportunities in Employment Law (1988) for anti-discrimination protections
    • Women’s Employment Law (1954) for parental and pregnancy rights

In industries with collective agreements, additional rules may apply, especially in education, healthcare, and the public sector. For international teams, it’s wise to consult local experts early and often. Mistakes here can be costly, but getting it right builds trust with your Israeli talent.

Protected Employee Groups: What Global HR Needs to Know Upfront

One of the first questions global People Ops teams ask is, “Are there employees we simply can’t let go?” The answer: Yes, and the list is broader than you might expect.

Key protected groups include:

  • Pregnant employees and new parents: Termination during pregnancy, maternity leave, or within 60 days of returning from leave is only possible with approval from the Ministry of Economy. You’ll need to show the decision is unrelated to the pregnancy or leave, and approval can take 30–45 days.
  • Military reservists: Employees on reserve duty can’t be dismissed during their service or for 30 days after, regardless of length of employment.
  • Others: Employees undergoing fertility treatments, those with disabilities, whistleblowers, and anyone who’s filed a workplace complaint are also shielded from dismissal under certain conditions.

Real-world scenario: An HR leader at a European SaaS company initiated a termination for performance, not realizing the employee was on fertility leave. The oversight led to a government investigation and reputational damage. The lesson? Always verify protected status before proceeding.

Failing to respect these protections can lead to reinstatement orders, compensation, and brand risk.

The Pre-Termination Hearing: Listening First, Deciding Second

In Israel, every termination requires a formal pre-termination hearing (shimu'a). This isn’t a procedural nicety, it’s a legal requirement and a moment to demonstrate empathy and fairness.

Here’s how to do it right:

  • Send a written invitation: State the reasons for the hearing, the date, and the employee’s right to respond.
  • Give preparation time: Allow at least 2–3 days for the employee to prepare.
  • Allow representation: Employees may bring a representative, such as a lawyer or union rep.
  • Document everything: Keep thorough records of all communication and meeting notes.

If you skip or rush this step, Israeli courts can reverse the termination, even if your reason was valid. This is true for in-office and remote employees alike.

Why this matters: Beyond legal compliance, a fair hearing builds trust and demonstrates your commitment to treating people with dignity, even in tough moments.

Notice Period Requirements: What’s Required Before Letting Go

Notice periods in Israel are strictly defined by law and hinge on how long the employee has been with you:

  • First 6 months: One day of notice per month worked
  • Months 7–12: 6 days, plus 2.5 days for each month beyond the sixth
  • After 1 year: One full calendar month

Example: If an employee has worked 9 months, they’re owed 13.5 days’ notice (6 + [2.5 x 3]).

Employers can have employees work out the notice period or provide payment instead. Either way, clear documentation of notice (or payment in lieu) is essential to avoid disputes.

Severance Pay and Final Entitlements: Making Sure Nothing Is Missed

Severance pay is a cornerstone of Israeli employee protection. Most employees dismissed after at least one year of continuous service are due severance, one month’s salary for each year worked, pro-rated for partial years.

Eligibility includes:

  • Employees terminated by their employer
  • Employees resigning due to a significant negative change in work conditions
  • Certain resignations due to health or family needs

Some employers opt for “Section 14 arrangements,” contributing monthly to a pension fund instead of paying lump-sum severance at termination. This must be agreed upon in writing at the start.

Final payments should cover:

  • Unpaid wages
  • Unused vacation
  • Severance pay (if applicable)
  • Payment in lieu of notice (if not worked)

Prompt payment matters. Delays can mean penalties or even legal claims.

Scenario: A global HR manager delayed severance payment due to confusion over Section 14. The employee filed a claim, resulting in extra costs and stress for everyone involved. Pre-termination planning is key.

Justifiable Reasons for Termination: What Will (and Won’t) Hold Up

Israeli law recognizes several valid reasons for termination, but the burden is on employers to prove their case:

  • Performance: Documented, ongoing failure to meet expectations despite feedback
  • Misconduct: Insubordination, dishonesty, or serious policy breaches
  • Business reasons: Downsizing, restructuring, or department closure
  • Incompatibility: Documented lack of fit with the team or culture

What’s off the table? Discriminatory reasons (race, religion, gender, age, disability, political belief) and retaliation for exercising legal rights. Keep your documentation thorough, a paper trail protects everyone.

Constructive Dismissal: When Resigning is Really Being Terminated

Sometimes, employees resign because their working conditions become unbearable. Israeli law may treat this as a dismissal initiated by the employer, triggering severance and other entitlements.

Common situations include:

  • Unilateral and significant pay or benefit cuts
  • Demotion or major role changes without cause
  • Hostile or unsafe work environments
  • Drastic changes to hours or location

If constructive dismissal is claimed, courts look for evidence that the employer’s actions left no reasonable alternative but resignation.

Why it matters: Even if an employee quits, you may still owe severance and notice, so always consider the impact of workplace changes.

Remote Worker Termination Process: Compliance Without Borders

Remote employees in Israel are fully protected by Israeli law, no matter where your HQ is based. The process, pre-termination hearing, notice, severance, applies in full.

Best practices:

  • Hold pre-termination hearings via secure video call
  • Send invitations and documentation digitally, maintaining clear records
  • Don’t rely on employment contracts that try to exclude Israeli protections, courts won’t uphold them

For more details, check our guide on navigating payroll challenges for global remote workers.

Scenario: A U.S. startup tried to terminate an Israeli remote worker without a hearing, assuming their U.S. contract would cover them. The employee won compensation in Israeli labor court. Lesson: Always follow local law.

Wrapping Up: Settlement of Accounts and the Essential Termination Checklist

Ending employment in Israel requires a thorough, well-documented process. Here’s how to close the loop:

Key steps:

  • Provide written confirmation of termination
  • Detail all final payments (salary, vacation, severance, notice)
  • Issue a certificate of employment (if requested)
  • Release pension funds promptly
  • Collect company property (laptop, phone, access cards)

Efficient Termination Checklist:

  1. Before the hearing:
    • Gather and document reasons for termination
    • Prepare and send the hearing invitation
    • Schedule the meeting with required notice
  2. During the hearing:
    • Present concerns and listen openly
    • Allow the employee to respond
    • Take detailed notes
    • Explain next steps
  3. After the hearing:
    • Review the response and finalize the decision
    • Draft and deliver the termination letter
    • Calculate all entitlements
  4. Administrative wrap-up:
    • Process final payments without delay
    • Update government and benefits records
    • Arrange return of company assets
    • Optional: conduct an exit interview

Delays or errors here can lead to penalties or legal action. For a deeper dive, see our comprehensive workbook on global hiring compliance.

Next Steps for Global HR Teams: Turning Termination into Opportunity

Employment termination in Israel is more than a legal hurdle, it’s a chance to demonstrate your company’s commitment to fairness, compliance, and care. By following the steps in this employment termination guide for Israel, you not only avoid costly pitfalls, but also strengthen your reputation as a people-first employer.

Document every step. Consult with local experts. And remember: every compliant, compassionate termination builds trust with your team and sets the stage for sustainable global growth.

If you’re expanding into Israel or managing a distributed team, consider partnering with employment law specialists who know the local landscape inside and out. At Borderless AI, we’re here to help you scale globally, compliantly and with confidence.

FAQs About Employment Termination in Israel

What is the minimum severance pay required in Israel?
One month’s salary for each year of continuous employment, with proportional payment for partial years after the first year.

How do termination requirements differ for remote workers in Israel?
Remote employees have the same rights as office-based staff. All legal procedures, including pre-termination hearings and severance pay, must be followed, though meetings can take place virtually.

What approvals are needed to terminate pregnant employees in Israel?
Termination during pregnancy or maternity leave requires Ministry of Economy approval, with proof that the dismissal is not related to the pregnancy. The approval process usually takes 30–45 days.

What happens if an employer fails to conduct a proper termination hearing?
Lack of a proper hearing can invalidate the termination, leading to reinstatement or compensation of up to 12 months’ salary.

Ready to make employment terminations seamless as you grow your global team?
Let Borderless AI support you at every step. Contact us for tailored advice, or explore more resources on our hub.

At Borderless AI, we don’t just build software. We help shape the future of work, one borderless, opportunity-rich team at a time.

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