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Kika ordered to pay employee wages
May 14, 2012 00:38
Following the court ruling, Kika Israel says it requested the freeze first and foremost to enable it to pay its employees.

Kika. (photo credit:Yoni Reif)

The cash-strapped Israeli branch of Austrian furniture giant Kika must pay some 250 employees their April wages within 72 hours, the Central District Court ruled Sunday morning.

The court extended its freeze on all legal proceedings against Kika to June 3.

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Employees turned up Thursday morning to find Kika’s Netanya store locked, with the company’s Israel operations apparently on the verge of collapse. Since opening to much fanfare in September 2011, the store has struggled to match rival IKEA’s two stores in Netanya and Rishon Lezion.

According to figures produced by Ashtrom Properties, 15 percent owner of Kika Israel, the company lost NIS 44.5 million in 2011 and NIS 13.5 million in 2012.

Following the court ruling, Kika Israel said that it requested the freeze first and foremost to enable it to pay its employees.

Over the coming days, the company added, it will reveal its financial situation to a court-appointed team with the aim of formulating a program to continue operating.

The Histadrut labor federation – which has represented Kika employees since they unionized on Thursday – welcomed the court ruling and said it would continue to fight for all of the employees’ entitlements.
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