After marathon talks through the night, Israel's public sector worker strike, which had been scheduled to begin at 6 am this morning, has been called off. Agreement has been reached between the Histadrut - General Federation of Labor and the Ministry of Finance in their talks at the National Labor Court in which there will be differential pay hikes favoring lower-paid workers for the next three years and compensation for salary erosion over the past two years. The agreement is in the form of a memorandum of understanding and the talks will continue so that an agreement can be signed within 10 days.
Under the terms of the agreement, 450,000 public sector workers will be awarded a salary hike. Half of the cost will be in the form of a direct hike and the other half will be a differential hike for low-paid workers. In total there will be a 7.5% salary hike for those workers with lower pay.
There will also be a NIS 2,000 one-time payment granted to workers in two payments in their salaries. If the agreement comes into effect, this will be the first time that the Histadrut has agreed to the principal of a salary differential that rewards lower paid workers.
Moshe Kahlon sounded satisfied with the agreement. He said, "The agreement changes the rules of the game and clearly says that what has been in the past will not be in the future." He also praised higher-paid workers. "They showed social solidarity and clearly said that they are ready to make sacrifices for lower paid workers."
Kahlon continued, "This agreement is historic. After years of agreements that widened the gaps between high and low paid salary earners in the public sector, we are announcing real good news today."
Histadrut chairman Avi Nissenkorn said, "We proved that in a genuine dialogue it is possible to implement measures that have not been seen before in their scope into an effective tool to narrow the gaps for low-paid employees in the public sector. I think that this precedent sets new norms in the economy."
Published by Globes [online], Israel business news - www.globes-online.com - on December 23, 2015
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