Can our foreign company dismiss an Israeli employee who keeps getting called up for reserve duty?

Not because of the reserve duty, and not while the employee is serving unless you first obtain a permit. Section 41A of the Discharged Soldiers (Reinstatement to Work) Law 5709-1949 makes a dismissal on account of reserve service void, and that includes dismissal because of an expected call-up or because of how often or how long the employee serves. It also bars any dismissal during the service itself, and for 30 days after service lasting more than two consecutive days, unless the Employment Committee at the Ministry of Defence grants a permit. The employer has to prove that the decision has nothing to do with the service. For employees who have served 60 days or more in a year, arrangements made permanent in 2026 stretch the protected window to 60 days.

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Detailed Answer

This regime was designed for an economy in which a large share of the workforce can be called up at short notice, and since October 2023 it has been tightened rather than relaxed. The statutory core sits in Section 41A. Subsection (a1) voids a dismissal caused by reserve service. Subsection (b) requires a permit from the Employment Committee (Va'adat HaTaasuka), a quasi-judicial body at the Ministry of Defence that hears witnesses and can order an employer to pay compensation, for any dismissal during service or in the 30 days that follow. Subsection (d) puts the burden of proof on the employer, and subsection (e) treats the non-renewal of a fixed-term contract that has run for 12 months or more as a dismissal, which closes the most obvious workaround. Section 41A1 makes a dismissal, or a cut to hours or pay, without the required permit a criminal offence. The wartime additions came through a collective agreement applied across the economy by extension order: a new extension order and temporary provision were published on 29 April 2026, protection now lasts 60 days after service for someone who has done 60 days or more in the year, and a dismissal or unpaid leave between day 31 and day 60 needs approval from a supervision committee at the Ministry of Labor. Spouses of reservists with young children have separate protection under Section 41A2.

For a foreign company the trouble usually starts with a decision taken far from Israel. A global headcount reduction is agreed in London or New York, a spreadsheet of Israeli roles goes to the local HR partner, and nobody checks who on the list has just come back from reserve duty or has a call-up order in a drawer. A choice-of-law clause naming English or Delaware law does not help, because protective Israeli employment legislation applies to work performed in Israel. The safer sequence is to run every Israeli name against reserve-duty dates before the selection is final, to write down criteria that would have produced the same result without the service, and to apply for the permit rather than dismiss first and defend later. The committee works in Hebrew, wants evidence rather than a policy slide, and will be sceptical of a claim that the role simply moved to another country if the move coincided with the call-up. The cost picture is less alarming than managers expect. The National Insurance Institute reimburses the reserve pay the employer advances, and the 2026 arrangements add a permanent state contribution of 20% of wages towards the employer's social-benefit deposits for reservists. Once a permit is granted, the ordinary pre-dismissal hearing still has to be held, as our answer on a UK company dismissing an Israeli employee explains.

In Practice: Under Section 41A(b) of the Discharged Soldiers (Reinstatement to Work) Law 5709-1949, dismissing an employee during reserve service, or within 30 days after service of more than two consecutive days, needs a permit from the Employment Committee at the Ministry of Defence, and the 2026 arrangements extend that window to 60 days after 60 or more days of service in a year. Dismissing without a permit is an offence under Section 41A1 punishable by the fine in Section 61(a)(3) of the Penal Law, currently up to NIS 75,300, and the dismissal itself is void.

When to Consult a Lawyer

• You are planning a reduction in force that includes Israeli employees, since every name has to be checked against reserve-duty and spouse-protection periods before the list is fixed, not after the letters go out.
• An Israeli employee's fixed-term contract of 12 months or more is about to lapse while they are serving or shortly after they return, because Section 41A(e) treats a failure to renew as a dismissal.
• The Employment Committee or the Ministry of Labor supervision committee has asked for your response, where the employer carries the burden of proof and the case is built on Hebrew witness evidence.

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Speak With an Israeli Attorney

An Israeli employment lawyer can vet a restructuring plan against the reserve-duty protections, prepare the permit application and represent the company before the Employment Committee.

Contact us for a confidential initial consultation.