Compensation dispute for war-affected firms

Government and industry argue over the effects of the economic slowdown versus the effects of the fighting on the south.

At a meeting yesterday, the Ministry of Finance, Manufacturers Association of Israel, and Histadrut (General Federation of Labor in Israel) reached a deal on compensation for employees of war-affected companies, but failed to agree on a formula for compensation for enterprises.

Sources inform ''Globes'' that the dispute is over a mechanism that differentiate the effect of the economic slowdown from the effect on revenue of the fighting against Hamas in Gaza.

The Ministry of Finance argues that a considerable portion of the decline in enterprises' revenue and profits in the affected region is due to the decline in economic growth and consumption caused by the slowdown, and that the state should not compensation businesses for this, but only for the effect of the regional fighting.

The business organizations claim that there is no practical way to completely and accurately neutralize the effect of the slowdown, and in order to expedite procedures and eliminate unnecessary red tape, the compensation mechanism applied during the 2006 Second Lebanon War should be used. Business owners should be compensated for the difference between current sales turnover and turnover for the corresponding period last year.

The parties agreed that residents in areas affected by Hamas rocket fire who cannot go to work per IDF Home Front Command orders will receive compensation directly from their employers. In addition, because of the prolonged closure of schools and kindergartens, parents with children up to the age of 14 will receive compensation for staying home to look after them. Only one parent of a working couple will be eligible for this compensation.

Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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