Recently, the Supreme Court handed down a judgment addressing the question of issue jurisdiction of the Labor Court over provident fund claims against pension and provident funds, or whether this jurisdiction lies with the civil courts.

The respondent, a beneficiary with the Menora pension fund, filed a claim against Menora Mivtachim Pension and Provident Fund Ltd, for the payment of disability funds, after she became very ill with cancer.  She filed her claim with the Magistrates' court in Haifa.  Menora filed an application to strike out the claim in limine for lack of issue jurisdiction or in the alternative to transfer the case to the Labor Court, which is empowered to hear such cases.  Menora based its application mainly on a decision of the National Labor Court and the opinion of the Attorney General as it was presented previously, concerning  the section of the Labor Courts Law, 5741-1969 (the 'Law') which addresses the jurisdiction of the Labor Court (Section 24(A)(3)).

The Supreme Court decided that in principle there is room to accept the position argued by the Menora concerning the issue jurisdiction of the Labor Courts; the court mentioned that it is necessary to give a broad interpretation to the jurisdiction of the Labor Court in matters of social security, in light of its expertise in that field, and save in particularly exceptional cases, the handling of social security cases (such as, for example, cases between provident fund insureds and the funds) should be transferred to it.

The legislative situation until the filing of the claim which lay behind the judgment in the Ashbal[1] precedent, which precedent provided the test of 'the essence of the claim in a broad sense', namely, 'claims in which the dispute directly and clearly raises insurance issues, in which there is no connection to an employment relationship, to the labor laws or to social security, do not fall within the issue jurisdiction of the Labour Court' (Paragraph 13).

The distinction drawn in this precedent was between claims which raise issues as to damage to rights arising from the insurance and provident fund relationship -  'insurance-commercial' – which are within the jurisdiction of the civil courts; and between claims which concern  a dispute 'focusing employment relations and social security', such as, damage to pension rights.  This distinction was not easy to apply and created a lack of legal certainty.

The current judgment confirmed the trend that was mentioned in the Supreme Court's ruling on this issue in recent years, and in particular the High Court ruling in the Egged petition where Judge Barak-Erez commented at (paragraph 27) that this is a 'new rule' for a new express intentional expansion of the jurisdiction of the Labor Court in the field of social security; thus the Supreme Court rejected the vague test of National labor Court in the Ashbal precedent, and thereby promoting legal certainty and stability.

The importance is that from now, most claims filed by employees and employers and their successors as against provident funds (without distinction between the various types of provident funds) will be heard before the Labor Court, which has exclusive issue jurisdiction to hear such claims.

Having said that,  in light of the specific circumstances of the case which was before it, and in accordance with what is customary  when laying down a new precedent, and in the interests of fairness and the desire not to drag out proceedings in the matter of a sick woman, as well as in the interests of efficiency, it was held that in this particular case there was no room to apply this ruling in the matter of the respondent (or to other claims which have already passed the pre-trial stage before this judgment was handed down).

Reference: RLA 7513/15 Menora Mivtachim Pensions and Provident Funds Ltd v Jane Doe (Justices: Rubinstein, Joubran, Barak-Erez, from 21.3.2016)