Sydney, Australia – London Beth Din Renders Decision in Rabbi vs Mizrachi Shul

Sydney, Australia – Rabbi Moshe Gutnick does not have life-long security of tenure at Sydney’s Mizrachi Synagogue…but can leave the cash-strapped congregation $800,000 richer.

The London Beth Din has handed down its long-awaited decision stating that the synagogue must not be sold to satisfy a redundancy claim by its rabbi who has served the congregation for 21 years.

In doing so, the Beth Din found that had Rabbi Gutnick retired at the age of 65 he would have been entitled to $800,000 and has ordered the synagogue to pay him compensation on either his resignation or dismissal. However, the Beth Din’s decision allows for the time frame as to how the Rabbi would have received these funds had he remained in the position.

Working on the figures given to it by the synagogue as to a managable amount which would ensure the continuation of the kehillah, the Beth Din has ordered the payment of $200,000 when the Rabbi officially leaves the congregation. The balance is to be paid in $4000 monthly payments starting in March 2012.

The dispute was heard by the London Beth Din after a civil court action in Australia failed to produce a result. The Beth Din ordered the Bondi Mizrachi Synagogue to pay Rabbi Gutnick’s Sydney Supreme Court costs although the matter of these costs was not part of the issues to be determined by the Beth Din. There was no costs order made against either party with regard to the Beth Din itself.

Rabbi Gutnick has served the Bondi Mizrachi synagogue since December, 1987. His initial employmernt contract was for three years and contained a condition disallowing either side for claiming the rights of Chazaka…tenure for life.

In 1990, the Rabbi’s contract was renegotiated. In his claim, Rabbi Gutnick states that it was negotiated on the basis that wanted Chazaka and that there was a note mentioning that the “Board understood his position”. However Minutes of the meeting do not state that the Board accepted Rabbi Gutnick’s position.

The Beth Din examined the records of an Extraordinary General Meeting in September 1990, at which the tenure for life issue was discussed. It stated it would have expected to have been able to have seen a signed agreement but ”in the absence of any incontrovertible evidence as to what transpired at the EGM, we make no finding as to whether or not it was resolved at the EGM that the Rabbi should be granted Chazaka or life tenure”.

The Beth Din stated that no signed contracts or a letter have appointment had been presented to it.

In 2007, the Bondi Mizrachi Synagogue declining membership was giving its Board of Management great concern compounded by the need to renovate the building. An approved loan was not taken up by the synagogue Board which had started negotiations to merge its congregation with the CBD-based Great Synagogue.

At this point, Rabbi Gutnick submitted a legal opinion as to how much he should be paid out on relinquishing his life tenure contract. He had also suggested he be made Rabbi Emeritus of the proposed merged congregation.

The Beth Din found that the discussion between the two synagogues “appeared to have been predicated on the Rabbi having a life tenure contract”. The two synagogues agreed that should the merger take place, Rabbi Gutnick would be paid $1,050,000…but the merger plans fell through.

Mark Schneider became President of the distressed congregation in December 2008 and immediately set to work on solving the Mizrachi’s financial crisis including seeking advice as to Rabbi Gutnick’s entitlements should his contact be terminated.

Schneider said earlier this year that if the synagogue was forced to keep the Rabbi then they would have had to sell the Sefer Torahs.

In March this year, an EGM was called at which a resolution was proposed to terminate the Rabbi’s employment on the grounds of redundancy. The EGM did not take place as Rabbi Gutnick successfully obtained an injunction in Sydney’s Supreme Court, (as was reported here at that time by VIN News).

The Beth Din also reports in its judgement that it had received statements from a number of members who had left the synagogue ”because of the failure of the Rabbi to cater to their pastoral needs at times of celebration or distress”.

In his evidence, Rabbi Gutnick maintained that “he constantly performed his duties to the best of his ability”. He presented testimonials to that effect.

In their decision, the Beth Din states that they found Rabbi’s insistence for security of tenure “an unusual request for a young part-time official”.  They pointed out that in the absence of a contract Halachic Law states that “the party claiming a benefit is at a disadvantage if the benefit is not clearly defined”.  However, the Beth Din concluded that Rabbi Gutnick was entitled to be paid until the age of 65.

In a further explanation, the Beth Din made it clear that Chazaka serves only to protect a Rabbi from having his position usurped. It does not give a Rabbi rights of remuneration.

Rabbi Moshe Gutnick was therefore awarded $80,000 per year until his 65th birthday.

The total would have been $1.2 million but was discounted to $800,000 on the basis that the Rabbi may not have been able or may have been unwilling to serve the full duration. The discount also takes into consideration that the Rabbi could mitigate his loss by taking up another position.

The Beth Din rejected a claim for a 3% annual rise in salary to be factored in.

In dealing with the claims that Rabbi Gutnick had performed poorly, the Beth Din states that “at no time has either a formal or informal disciplary process been invoked” and point out that the Synagogue had never failed to pay a 3% annual salary increase.

In a major finding, the Beth Din explains that under normal cicumstances, it is acceptable to liquidate a synagogue’s assets to pay a debt. The Beth Din rejected a request from Rabbi Gutnick that the synagogue should take out a mortgage to pay its debt to the Rabbi preferring to accept from the Board and its advisors that the maximum loan the synagogue could service would be $200,000.

A caveat has been added to the decision allowing for Rabbi Gutnick to receive whatever balance is due to him if and when the synagogue should ever sell its assets. But the amount is subject to discount on the basis that it will have been paid before its due time and that that discount is to be agreed between the parties. Failure to do so would bring the matter before the Beth Din once again.

Synagogue president Mark Schneider told J-Wire: “We will be convening a meeting of our members as soon as possible to report on the judgement and to map out the future of the Shule now that we have achievd the certainty we have sought.