Wolt will pay 34.3 million shekels to 82,000 couriers and commit from now on to paying its couriers compensation equivalent to the minimum wage. However, the couriers will not be classified as employees, according to a settlement agreement in the class-action lawsuit filed against the company, which was submitted to the Tel Aviv Regional Labor Court. Under the settlement agreement, Wolt also commits to insuring its couriers, providing safety training, and incentivizing them to make pension contributions.
The class-action lawsuit, filed by former company courier Golan Hazanovich, concerned the employment status of Wolt’s couriers and whether an employer-employee relationship exists between them and the company. In the lawsuit, Hazanovich argued that the couriers were, in practice, employees of Wolt, among other reasons because they are part of the company’s core operations and depend on it for their work.
Accordingly, Hazanovich sought payment of employment benefits, including pension contributions, paid vacation days, reimbursement for travel expenses, sick pay, recuperation pay, and severance pay. Wolt, on the other hand, argued that its couriers are self-employed and enjoy the freedom to choose whether, when, and how much they work, and therefore their relationship with the company should not be considered an employment relationship.
One-Time Compensation Without Acknowledging an Employment Relationship
Under the proposed settlement agreement, which still requires the court’s approval, couriers who meet the conditions set out in the agreement will continue to be considered self-employed, and no employment relationship will exist between them and Wolt. However, Wolt will provide a one-time compensation payment to couriers who have been active on the platform since it began operating in Israel in November 2018. An estimated 82,500 couriers are eligible, with the amount each courier receives determined according to the number of deliveries they have completed.
The compensation will start at 50 shekels for couriers who completed a single delivery, with the rate per delivery increasing as the number of deliveries completed by the courier rises. Thus, a courier who completed more than 7,000 deliveries will be entitled to 0.20 shekels per delivery. For example, under the formula set out in the settlement, a courier who completed 2,500 deliveries would receive 329 shekels, while a courier who completed 12,000 deliveries would receive 2,094 shekels. The total cost of the settlement is estimated at approximately 34.3 million shekels, although it could be higher depending on when the settlement is approved.
The application emphasizes that the settlement does not constitute an admission by Wolt of the plaintiff’s claims or an acknowledgment that an employment relationship existed in the past. The one-time payment is likewise defined in the settlement as a payment made as part of the settlement, rather than as wages or payment for services.
Prohibition on Paying Less Than the Hourly Minimum Wage
Alongside the payment for work performed in the past, the settlement establishes, as noted, a new mechanism for couriers who continue to operate on the platform. Their average compensation for each hour spent making deliveries may not be lower than the hourly minimum wage. Wolt will be required to calculate each month the time spent making deliveries and the compensation paid to each courier, and if the average hourly compensation is below the minimum wage, it will be required to make up the difference. An external accountant will oversee the mechanism and review it once every two quarters using a random sample of 100 couriers.
The settlement also includes an incentive for pension savings. Couriers who meet the specified conditions and make the required contributions as self-employed workers will be eligible for a grant equal to 50% of the contribution they actually make, up to the amount required by law. Eligibility for the grant is conditional, among other things, on the worker being at least 21 years old, meeting a minimum level of activity, and providing an annual statement from their pension provider.
Accident Insurance and Road Safety Training
The couriers will also receive insurance coverage funded by Wolt. During the first three years of implementing the coverage, minimum benefits have been set at up to €50,000 in the event of accidental death; up to €75,000 for a courier with children in the event of death; up to €50,000 in the event of total permanent disability; and up to €25,000 in the event of partial permanent disability resulting from a serious injury. The insurance compensation is intended to be paid in addition to compensation or benefits from other sources and will not be offset against them.
It was also agreed that Wolt will provide couriers with road safety and safe-driving training, and that before deciding to terminate a courier’s engagement, the courier will be given a fair opportunity to present their position, except in exceptional and special circumstances in which the engagement may be terminated immediately. In addition, Wolt will be subject, with the necessary adjustments, to the provisions of the law prohibiting sexual harassment, as well as provisions concerning equality for people with disabilities and equal employment opportunities.
6 Years in the Making: The Settlement Agreement
The settlement was reached following six years of legal proceedings, with broader implications for the issue of workers’ rights across Israel’s platform economy as a whole. In August 2022, the Regional Labor Court approved the request to certify the lawsuit as a class action. In its decision, the court ruled that “there is a reasonable possibility” that an employment relationship would be found to have existed between the couriers and Wolt.
Wolt filed a motion for leave to appeal with the National Labor Court, arguing that the decision was incorrect and that the traditional tests used to determine employment relationships do not give sufficient weight to the characteristics of the platform economy, foremost among them the flexibility and autonomy of couriers. In July 2024, the National Labor Court recommended that the parties enter mediation. The mediation was conducted by retired Supreme Court Justice Yoram Danziger and retired National Labor Court Justice Michael Spitzer.
In doing so, the parties are effectively seeking to resolve the central dispute in the lawsuit without the court ruling on the fundamental question of whether Wolt couriers are employees. However, as noted, the agreement requires approval by the Regional Labor Court. As part of the application submitted, the parties also asked the court to order that the settlement be published publicly in a manner that would allow Wolt couriers who wish to do so to object to the settlement or opt out of the class, enabling them to pursue their rights separately. The settlement will only take effect once it has been approved by the court in a judgment.
It should be noted that, as part of the proceedings, the government established an interministerial team in 2022, led by Adv. Rivka Werbner, the Commissioner of Labor Relations at the Ministry of Labor, which was tasked with formulating practical recommendations for regulating the platform economy model in Israel. In practice, the team met five times but never presented its conclusions. The State of Israel also refrained from participating in the vote on the Convention on Ensuring the Rights of Platform Workers that was adopted by the International Labour Organization last June.
Wolt was represented in the proceedings by attorneys Moria Tam-Harshoshanim, Yossi Ashkenazi, and Gregory Danovitz of Herzog Fox & Neeman. Courier Golan Hazanovich was represented by attorneys Yaakov Spiegelman and Amit Ido of his firm.