Hundreds of current and former employees of the chip company Tower Semiconductor will receive significant financial compensation, following a class action lawsuit filed by a former employee of the company alleging undercalculation of social benefits.
The company, whose market value is estimated at 72.8 billion shekels and whose operations are spread throughout the world, will pay a total of approximately 8.5 million shekels as part of a settlement agreement.
A former production employee at the company filed the request for approval of a class action lawsuit, through attorneys Ido Porat and Tomer Tzrur.
According to the employee, Tower did not pay its employees their full entitlements by omitting shift allowances from the base salary used to calculate overtime and weekly rest periods. In addition, it was alleged that holiday pay was not paid in full and sick days were calculated based on base salary only. The employee further claimed that employees were only given partial notice of their employment terms.
Tower rejected the claims, claiming that the wage conditions in question do not apply to its operations at all. The company claimed that at most there is a small gap regarding night shifts on weekends.
After a lengthy mediation process, the parties reached a compromise agreement that was given the force of a ruling in the Nof HaGalil Regional Labor Court.
The judge determined that the arrangement reflects a proper balance between the chances and risks in the process, and provides the employees with rapid compensation without being dragged into years of legal litigation.
According to the ruling, Tower will pay approximately 7.35 million shekels in direct compensation to employees who were employed in the seven years prior to the lawsuit, plus approximately 700,000 shekels in interest and linkage differences.
The compensation will be distributed among the hundreds of employees according to their seniority and months of employment, with active employees receiving the payment automatically to their bank account, and former employees receiving notification of their eligibility.
In addition, the court approved compensation of 118,000 shekels for the representing plaintiff and fees for his lawyers amounting to approximately 221,300 shekels of the total amount.
Beyond the financial compensation, the company has committed to updating the method of calculating wages for its employees from now on.
