Arkia Airlines Ltd. has withdrawn its threat to fire 100 employees and returned to the negotiating table with the Histadrut (General Federation of Labor in Israel).
Arkia CEO Gad Tepper notified the Histadrut Transport Workers Union chairman of the decision, and the Histadrut in turn cancelled its threatened declaration of a labor dispute at the airline. Arkia planned to cut employees' salaries by 10% due to its estimated $5 million losses and the global economic crisis.
The Histadrut demanded that Arkia break into pay cut into two parts: a 5% cut in salaries and an additional 5% contribution as vacation time. After long negotiations, Arkia's management agreed to this formula, but demanded that the vacation days not be restored should the airline's situation improve.
In response, the Histadrut proposed that Arkia's management restore the reduction in salaries and vacation days when its profit exceeds $1.4 million a year. This disagreement caused the negotiations to deadlock and led to Arkia's announcement that it would fire 100 employees.
The Histadrut responded with a threat to declare a labor dispute.
Published by Globes [online], Israel business news - www.globes-online.com - on February 9, 2009
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