High Court of Justice Ratifies the Labor Court's Approach
toward Piercing the Corporate Veil
In the early 2000s, the National Labor Court ruled that the use
of the legal tool "piercing the corporate veil" should be
expanded insofar as the matter pertains to employees. The Labor
Court maintained this approach even after the causes for piercing
the corporate veil were constricted in the Companies Law.
In an appeal of the National Labor Court judgement on the matter
of R-Z Plastek Ltd. to the Supreme Court, sitting as the High Court
of Justice, the Supreme Court ratified the rulings of the National
Labor Court and decreed that the rules for piercing the corporate
veil are adapted to labor law and to its special characteristics by
the Labor Court. The Supreme Court also ruled that it is warranted
to expand the use of the legal tool of piercing the corporate veil,
insofar as the matter concerns employees who are not
"voluntary creditors" but special creditors, toward
