Minister of Finance Yair Lapid and Histadrut chairman Ofer Eini reached an agreement last night on public sector employees, as part of the state budget, which include a number of concessions to the Histadrut (General Federation of Labor in Israel) in exchange for which the third installment of the public sector pay hike will be postponed until 2015.
One of the Histadrut's main achievements relates to contract workers: public organizations, and cleaning and guard service providers will be required to comply with the terms of the agreement reached between the government and the union, retroactively to May 2012. The postponement of public sector pay hike will not apply to cleaners and guards in the public sector. In July 2013, their salaries will be raised to NIS 4,446.25 per month for an employee and NIS 4,852.75 for a supervisor.
From July 2015, public sector employees, including cleaners and guards, will receive an increase in deposits for pensions from the current 19.5% to 25%. Important social items in salaries will not be considered as postponed, including budgeted pensions and severance bonuses, which will be based on the higher salary. Student public sector employees will be eligible for advanced training funds from the first day of work (employer's contribution of 7.5% and the employee's contribution of 2.5%).
Negotiations on a new public sector labor contract will begin in July 2014, and the Histadrut may raise demands for 2013-14.
"First of all, I know that the people are angry and hurting. I cannot argue with that," said Lapid at a joint press conference with Eini last night, following the agreement on the budget. "The situation angers me, too, and I would have preferred to stand here and offer some candies that I had decided to distribute to the nation, but is exactly the conduct that caused the budget hole, which we must now deal with."
Lapid continued, "Everyone understands that the deficit must be closed, but everyone wants someone else to pay the price. Regrettably, there are no miracles in these things. I cannot pass out money that the government does not have, and I am not prepared to reach the situation of Greece, where people woke up one morning to discover that the value of their homes had been halved, they had lost their jobs, and all public services had collapsed. The protesters today tell you, 'That can't happen here.' But it can happen, and if we do nothing, that is exactly what will happen. I am not prepared to let this happen on my watch. Leadership means responsibility, and responsibility means that you sometimes have to do what is right, and not what is popular.
"This process hurts the working man, and I accept with love all the criticism on the matter, but it should be noted that, for the first time in years, the working man is not the only victim. I am no socialist, and I want to encourage business in Israel, but this time we also made cuts to the rich. The Concentration in the Economy Law will not allow tycoons to control the economy. We've raised the capital gains tax, the tax on luxury goods, the companies tax, high income-earners will not receive the child allowance, we cut the salaries of MKs and ministers. This time, the reductions include sectors, which until now, were considered politically immune. The people who were close to the plate are no longer there, and we are changing the equality of the burden in economics too."
Lapid said that he has been in talks with Histadrut chairman Ofer Eini for weeks, and that he preferred to reach an agreement with public sector employees and avoid a strike and confrontation with the Histadrut (General Federation of Labor in Israel).
Eini said, "This was one of the most difficult negotiations I have held, and I have held many. The economy is in a serious crisis. We must realize that we must share the burden. The finance minister showed sensitivity, and agreed to implement the agreement on contract workers, who are the poorest workers in society. As for the austerity measures, there is no question that the tax hikes will burden the population, including the poor and the middle class. The Histadrut is not supposed to deal with this.
"I cannot accept the phrase "the connected". There is no shame in being strong. When you speak about workers committees, you're talking about the representatives of one million people, and despite what you think, regrettably, most public sector workers are not big earners."
Published by Globes [online], Israel business news - www.globes-online.com - on May 9, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013