Moblie operator Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), the Cellcom worker’s committee, and the Histadrut (General Federation of Labor in Israel) reached a historic collective agreement today. This is the second agreement to be signed in the mobile sector (the first was signed by Pelephone Communications Ltd.), and it includes many clauses that improve the position of the company’s workers, increase their wages, and allow them to share in profits.
The sides said that in a manner unprecedented in the mobile sector, the collective agreement includes the workers sharing in the company’s profits. 12.5% of any amount above NIS 400 million annual operating profit will be transferred to the workers on a quarterly basis, in the form of a profit-sharing bonus. The cost of the agreement to Cellcom is NIS 200 million.
The agreement does not detail how many Cellcom workers will be fired as part of the streamlining process that the company is planning to implement, and it appears that the number fired will be decided in cooperation with the workers’ committee and the Histadrut. It is reasonable to assume that, due to the rising competition in the mobile sector, Cellcom’s workforce, like those at the other companies, will be reduced significantly.
Already in the first year of the agreement, the company’s minimum wage will be 5% higher than the legal minimum wage. In every year covered by the agreement, the minimum wage will rise by an additional percentage point, on top of the rise in the legal minimum wage that is to be carried out in three stages.
The agreement further states that the workers will receive an annual raise on a differential basis. In the first year of the agreement, there will be an average rise of 3.14% for workers who have been at the company for 18 months, based on a table that factors in seniority and salary. In the second and third years of the agreement, an average raise of 3% of the fixed annual salary will be given; 1.25% of the rise will be fixed, and the rest variable based on performance.
The workers will also receive a signing bonus, and already in the first month following the signing of the agreement, they will receive a one-time bonus calculated based on how long they have been with the company.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2015
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