Employment Law — Israel
Agreed Resignation in Israel
Before You Sign
Your employer is offering a separation package. Before you accept, speak with Adv. Liron Elmaliach — an employment lawyer who will explain what you are being asked to give up, what you can negotiate, and what your rights are under Israeli law.
What Is an Agreed Resignation Package
An agreed resignation sits between a dismissal and a voluntary resignation. The employer wants to end the employment relationship but — for commercial, legal, or reputational reasons — prefers not to issue a formal termination notice. Instead, the employer offers an incentive package in exchange for the employee agreeing to leave cooperatively.
Separation agreement vs dismissal: A straightforward dismissal gives the employee statutory rights — severance pay, notice pay, and potentially unemployment benefit — without any negotiation. An agreed resignation agreement replaces or supplements those rights with negotiated terms. This flexibility benefits the employer; it does not automatically benefit you unless you negotiate well.
Why employers prefer agreed resignation: Employers avoid the risk of unfair dismissal claims, maintain confidentiality, protect company reputation, and gain certainty — in exchange for a package. They also benefit from the mutual release of claims, which typically prevents you from suing later.
What is typically included: A package commonly covers severance pay (equal to or above the statutory minimum), a notice period or garden leave, a reference letter, and sometimes additional payments such as a discretionary bonus or enhanced benefits. The exact contents vary widely and are negotiable.
Waivers you may be asked to sign: Almost every agreed resignation agreement includes a release of claims — a clause in which you agree not to bring any legal proceedings against the employer. The scope of that waiver can be narrow or sweeping, and understanding it before you sign is critical.
What to Negotiate — and What to Watch Out For
Non-compete clauses: If the agreement restricts you from working in your industry after leaving, examine the scope carefully. Israeli courts apply a proportionality test — a clause that effectively prevents you from earning a living in your field may be unenforceable. Negotiate to narrow the restriction in duration, geography, and specific activities.
Waiver of future claims: Understand exactly which claims you are releasing. A broad release may extinguish rights you did not know you had — including overtime claims, commission disputes, or harassment claims. In some cases, you can negotiate a narrower waiver that excludes specific categories.
Reference letters: Agree on the precise wording of your reference letter before you sign the separation agreement. Once you have left, the employer has little incentive to cooperate. Include the agreed wording as an appendix to the agreement.
Tax optimisation: The structure of the payment matters. Statutory severance pay has a preferential tax treatment in Israel under certain conditions. Above-statutory payments may be treated differently. A lawyer can work with a tax adviser to structure the package so you keep more of it.
NII implications: How the separation is characterised — resignation vs dismissal — affects your eligibility for unemployment benefit from the National Insurance Institute. Consider whether the characterisation in the agreement matches how you intend to present the separation to the NII.
Garden leave: Rather than working out your notice period, garden leave allows you to stay at home on full pay while remaining an employee. This prevents you from immediately joining a competitor and preserves your income. It is worth negotiating if the employer wants a quick departure.
Counter-offer considerations: An agreed resignation offer is not an ultimatum — it is an opening position. If you have strong performance history, pending bonuses, or claims the employer would prefer to avoid, you may have more leverage than you think. An employment lawyer can assess your negotiating position objectively before you respond.
Frequently Asked Questions — Agreed Resignation in Israel
Common questions about agreed resignation packages and your rights under Israeli employment law
Do Not Sign Until You Have Taken Advice
Agreed Resignation — Free Initial Consultation
Employment law · Jerusalem and Israel