A new wage agreement will soon be signed at Tnuva Food Industries Ltd.. The agreement includes voluntary retirement for 250-300 workers, some of whom will be pensioned off, and a 7.5% pay rise for the 6,000 workers on all levels in the company and its subsidiaries. The agreement also includes bonuses totaling NIS 61 million for 2015, including junior employees and management staff who did not receive a bonus for that year. The three-year agreement will cost an estimated NIS 100 million.
The streamlining plan, which includes layoffs, is based primarily on a voluntary retirement offer for 250-300 workers on preferential terms. In order to minimize the number of layoffs, this number will also include workers leaving under an early pension plan. Under the agreement, if agreement is not reached on the retirement quota and the terms for discontinuation of employment, the matter will be referred to the Tnuva CEO and the chairman of Histadrut Hamaof (a union of administrative, agricultural, clerical, and other workers). As part of the layoffs, consideration will be given to streamlining among the various company officeholders by consolidating positions or increasing the volume of work for various parties in the Tnuva apparatus.
Sources inform "Globes" that the dispute about the number of workers, including the publication of different numbers of layoffs, resulted from lack of clarity concerning the workers at Tnuva's subsidiaries, who are not unionized in a workers' committee framework. As of now, the final signing of the agreement is therefore subject to a check by the workers in order to make sure that the various clauses on which the agreement is based are well defined and delineated, and are not subject to change leading to an increase in the number of layoffs. Tnuva is making it clear that the agreement includes all of its subsidiaries, stating "The numbers published in the media (550 layoffs, M. R.-C.) are completely unfounded."
A fall in value and sales
Tnuva has been through a difficult year. In August 2016, it was reported that in the 18 months since Chinese company Bright Food completed its acquisition of a controlling interest in Tnuva, the company's value has dropped by more than 40%, according to a valuation by TASC. Tnuva was assigned a NIS 4.5-5 billion value, compared with the NIS 8.6 billion value reflected by the acquisition deal. TASC attributed the loss in value to smaller profit margins caused by direct competition in the dairy sector (for example, milk and soft cheese), and regulatory measures involving the extension of price controls to additional products. In addition, the market was opened to customs duty-free cheese and fresh meat imports, Shufersal Ltd. (TASE:SAE) began operating in the private brand sector, and consumption of dairy product fell across the board.
Following these reports, the board of directors sent the company workers a soothing letter last September stating that the commitment of the controlling shareholder in the company to them.
Tnuva finished the first half of 2016 with a 5.7% drop in sales and 13.4% loss in market share in food and consumer products.
Tnuva CEO Eyal Malis welcomed the signing of the new wage agreement, which he said reflected "Tnuva's responsibility to its workers and the workers' responsibility to the company. Tnuva is now emerging strengthened to face the challenges awaiting it in the coming years in the food market. Together with its workers, Tnuva will continue full speed ahead on behalf of the Israeli consumer."
Tnuva workers' committee chairman Ahiav Simhi said, "Tnuva workers are dedicated day and night to the company's success and the maintenance of its stability. The agreement values the workers' great contribution in the continuation of the company's stability and success."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 2, 2017
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