The Manufacturers Association of Israel today expressed its official opposition to a proposal for increasing the number of vacation days for Israeli employees. In preparation for Sunday's discussion in the ministerial legislative committee of the initiative for increasing the number of vacation days to at least 21 a year (instead of 10, as at present), Manufacturers Association president Shraga Brosh wrote that the proposal would cost the economy billions of shekels, and that industry could not afford it.
In his letter to the ministerial committee, Brosh writes, "Absurdly, this proposal, aimed at benefiting employees in the short term, will, if approved, cause severe and sustained harm to the business sector's competitiveness and its ability to generate new jobs."
The Manufacturers Association estimates that the proposal will cost the economy NIS 7 billion annually. Brosh asserts that the Ministry of Finance is talking about NIS 6 billion in added yearly costs. He further claims that a more moderate alternative proposal to increase the number of vacation days over the employee's first five years in a job, instead of in the first year, will cost the economy NIS 2-2.5 billion.
"Implementation of such a law will cause a severe shock in the labor market in general, especially in the business sector, which has not yet regained stability after the 8% minimum wage hike in April, and which is expected to absorb a cumulative 50% increase in the minimum wage over the next 30 months," Brosh states, "The business sector in Israeli cannot afford this additional heavy cost. It will mean further damage to our ability to compete globally, operate businesses, produce, and employ in Israel." Brosh adds that productivity in Israel is already low in comparison with the rest of the world, and that the subject of vacation days should be settled in negotiations between the workers and the employers. "It isn't right for the the change being sought to take place through general Knesset legislation, which by its nature can't take specific circumstances into account and provide individual solutiona," Brosh writes.
The bill to increase the number of vacation days for employees was submitted by MK Rachel Azaria (Kulanu), and was endorsed by 11 more MKs. The MKs justified the bill by the fact that the labor market had changed, and employee mobility was increasing. This means that people lose vacation days when they begin a new job and start again at the minimum level.
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2015
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