A severe crisis in the Israel Postal Company is threatening the company's future. Sources inform "Globes" that the company board of directors was summoned this evening to discuss the developments, following the Government Companies Authority's announcement that given the crisis with the employees, it was in effect halting negotiations with them, and was asking the board of directors to discuss the consequences of this.

A court hearing will take place this Wednesday, following a petition by the bondholders for the appointment of a representative for them to the company, due to concern that the company is liable to go bankrupt.

The employees today announced their decision to disrupt the company's work, following the breakdown of talks and the fact that no agreement on the number of layoffs could be reached.

There are major disputes between the parties, who were unable to bridge the gaps. The workers are demanding that some of the temporary workers who have worked for over five years be given tenure, and there is also a dispute about the amount of compensation those laid off will be given. It was also learned that there is a dispute about the managerial flexibility that company management is seeking after an agreement is signed, a topic that the workers are unwilling to accept.

The Government Companies Authority has proposed the introduction of a partner who will purchase a 20% share, with another 20% of the company being offered to the public in order to raise capital for the recovery plan, while leaving the government with a controlling interest, and this proposal is also subject to disagreement. At its meeting tonight, the company board of directors will have to make decisions about the breakdown in negotiations, given the approaching court hearing.

According to the recovery plan being formulated, many employees will have to leave the company. The general outline of a solution for the company's dire straits is far from being finished, due to disputes about the number of employees that will take voluntary retirement and the desire of Minister of Communications Gilad Erdan to ensure a long-term solution before the company is privatized.

Earlier today, the workers announced that starting tonight, and until further notice, they would protest in front of the home of Minister of Finance Yair Lapid, and that mobile postal services would be halted from tomorrow (except for communities near the Gaza Strip).

The workers said that postal workers had begun sanctions five months ago and had shut down the post office in protest against the plan to fire thousands of company employees without any long-term plan to solve the company crisis. At the beginning of May, representatives of the employees, the Histadrut (General Federation of Labor in Israel), company management, and Ministry of Finance representatives had begun intensive negotiations, and had achieved significant understandings.

As part of these understandings, it was agreed that hundreds of employees would accept early retirement. In recent days, however, company management and Finance Ministry representatives had demanded that an additional 1,500 tenured workers be laid off.

Postal Workers Union chairman Shimon Farjun said, "During the negotiations, we accepted painful and large-scale streamlining measures, including layoffs, because we felt responsible for the living of thousands of other workers. We agreed to pay a heavy and very painful price. Although we had already reached the final stage of the negotiations, we now see that the Ministry of Finance and management want to fire thousands more tenured workers - we can't agree to that. I call on the Finance Ministry and company management to retract this terrible demand and sign an agreement within the current framework in order to save the company, not to bury it."

Israel Postal Company said, "The Postal Company and the state have made many concessions to the Histadrut and the workers in an attempt to stabilize the company and improve its services to the public. The reform proposal submitted to the Histadrut and the workers, however, which require an investment of hundreds of millions of shekels by the Treasury, were met by a slamming door and the declaration of a strike in postal services."

"The plan discussed with the Histadrut and the workers included extending work hours in postal branches to the evening, mail delivery in the afternoon and evening, mail delivery using external networks in order to reduce the load in branches, a blueprint for partial privatization of the company, and a cut in the number of tenured positions. These measures are aimed at making the company more efficient, and especially to improve its services to the public, and adjust those services to the new era and the needs of the market. We hope that before they bring a disaster on the company, its employees, and its customers, the Histadrut and the workers organization sober up and return to the negotiating table in order to reach understandings, without which the company's future is unclear."

Published by Globes [online], Israel business news - www.globes-online.com - on August 31, 2014

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