Some Palestinian workers decided to sue their former Israeli employers for severance that was never paid upon termination of their employment. They sued in Israeli court. The circumstances, though, were not really so clear cut. These Palestinians were employees of an Israeli owned factory in a yishuv in Gush Katif. When the yishuv was forcibly shut down with the residents forcibly evicted during the Disengagement, the factory was also shut down. At that point, these Palestinians lost their jobs, yet they were not paid any severance.

The regional labor court ruled that the former employer does not need to pay them severance, as he did not fire them, but his factory was forcibly shut down by the state.

Upon appeal, the national labor court upheld the original decision saying the employer never fired his employees, and he actually never wanted to stop the work arrangement. The arrangement was forcibly canceled by an "act of the State", against the will of both parties. As well, this is not similar to a factory closing down, because here the owner was removed from his factory with no ability to prevent it.

Of course there had to be at least a minority opinion supporting the Palestinians that would have liked the employer to pay up. If anything really the State should pay, if at all, though the court said there is no method for them to have the State pay such severance, so there is nothing left to do. But to try to make the employer pay for this?

The minority opinion said this is comparable to a factory shutting down, where the employer would be obligated to pay severance. The fact that he did not want to shut down the factory has no bearing on the issue. Because the factory was in the Gush Katif region, he should have taken into account the eventual possible forced closing of his factory, and therefore should have to pay. (source: Srugim)

It sounds like a ridiculous opinion to me.

The whole claim seems ludicrous and should have been thrown out of court. The court should have responded that they received severance in the form of all that land and buildings and they even got the whole factory!