Hundreds of employees of Israel Chemicals Ltd. (TASE: ICL) unit Dead Sea Works today launched labor sanctions to protest negotiations on a possible merger of Israel Chemicals, controlled by Israel Corporation (TASE: ILCO), with Potash Corporation of Saskatchewan Inc. (NYSE; TSX: POT). The workers committee is accusing management of a lack of transparency about the merger talks with the Canadian company. There have been reports that Potash Corporation plans to submit an improved take-over offer for Israel Chemicals to the government within a month.
The government owns a golden share in Israel Chemicals, which means that it must approve any acquisition of the company. Israel Chemicals employees fear that an acquisition will jeopardize their jobs, result in the transfer of operations to Jordan, and terminate the company's development plans for the south. Israel Chemicals employs 5,000 people at its facilities in the south, and as reports about a pending deal emerged, the employees and the Histadrut (General Federation of Labor in Israel) declared a labor dispute.
Operations at Dead Sea Works at Sdom were suspended this morning, and the workers committee tried to keep outsourced workers from entering the plant. "It is unacceptable that, on one hand, the government and Israel Chemicals deny that there are talks to merge with Potash Corp., while on the other hand, Potash Corp. announces that it will submit a new offer for such a merger - which means that there was a previous offer," said Dead Sea Works workers committee chairman Armand Lankri. "We want honest and direct answers from our employers to know where things are headed, because at the moment, we're in a situation of uncertainty."
Lankri said that if the workers committee does not receive clarifications from Israel Chemicals' management about the talks with Potash Corp., the protest would intensify. "We cannot rule out that, from tomorrow, we will intensify the protest and launch sanctions at other Israel Chemicals factories in the south. If these measures do not cause the company's management to tell us the truth, we'll go on strike," he said.
Dead Sea Works said in response, "We are astonished at the workers' claims that protests which harm the company and its employees are part of the struggle against the merger with Potash Corp. the workers know perfectly well that a merger is not on Israel Chemicals' table, but if at all, on the government's table."
Dead Sea Works added that the real reason for the workers committee's labor sanctions was the argument, which has lasted for weeks, with management over the distribution of millions of shekels in bonuses to employees. Management claims that the workers committee is demanding that part of the bonuses should be paid into its account, while management insists that the full amount go directly to the employees.
Lankri denies the claim, saying that it spin.
The Beersheva District Labor Court will hear the case tomorrow, after Dead Sea Works management filed a petition claiming that the sanctions were illegitimate and damaging.
Published by Globes [online], Israel business news - www.globes-online.com - on March 18, 2013
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