Histadrut readies for strike in 2 weeks

Ofer Eini: We'll bring government offices to a complete halt over Bar-On's planned tax changes.

Eini 248.88 (photo credit: Ariel Jerozolimski)
Eini 248.88
(photo credit: Ariel Jerozolimski)
The Histadrut Labor Federation on Thursday declared a general work dispute and threatened to stage a public-sector strike at the end of the month unless the Finance Ministry backtracks from it plans to tax savings in advanced-training funds. "We have declared a work dispute, which means that in exactly two weeks, on June 30, we are going to begin the strike action in the public sector, bringing government offices to a complete halt until the Treasury withdraws its plans," Histadrut chairman Ofer Eini said. "The unilateral decision to cancel collective labor agreements that included an exemption from taxes on advanced-training funds savings is a violation of labor relations in the economy. We are not going to return to the times of [former finance minister Binyamin] Bibi Netanyahu policy, during which unilateral decisions are taken lifting collective agreements by legislation." On Wednesday, Eini convened a press conference and voiced fierce opposition to the tax plan presented earlier in the day by Finance Minister Ronnie Bar-On. "If Bar-On does not change his plan within two weeks, we will launch a general strike in the public sector, and the entire responsibility will fall on the finance minister," Eini said Wednesday. By accusing Bar-On of "Bibism," Eini was practicing "Amirism," a reference to combative strike actions taken by former Histadrut chairman Amir Peretz, according to Uriel Lynn, president of the Federation of Israeli Chambers of Commerce. "There is no doubt that prior to the announcement about tax changes regarding training funds, the leading employer groups and union representatives should have been consulted," he said. "But this does not mean that in reaction, the Histadrut needs to immediately pull the trigger." Shraga Brosh, chairman of the Federation of Israeli Economic Organizations, said he supported Eini's stance. "The decision to finance the new tax plan through levying taxes on advanced-training funds is a grave mistake that undermines labor relations," he said. "The unilateral move taken by the finance minister without discussion with the Histadrut chairman is outrageous." Brosh said employers and the Histadrut three years ago opened a new form of solving labor disputes by sitting down at the negotiation table to avoid strikes. "The finance minister has chosen to return to the era of battles rather than negotiation," he said. Bar-On said if the unions objected, the plan could be tweaked. On Wednesday, Bar-On presented the ministry's multiyear scheme to gradually lower personal income tax and corporate tax, from next year through 2015, while lifting the tax exemption on advanced-training funds (kranot hishtalmut) to finance the plan. Under the framework of the new scheme, starting in 2009, the amount that an employer pays into a worker's training fund will be added to the worker's gross pay for tax purposes. However, the change will not affect the worker's health care and social security payments. Employer deposits into advanced-training funds will be accounted as regular income for tax purposes, which could increase monthly income tax payments by hundreds of shekels. The Treasury justified the plan by saying just 37 percent of all employees currently receive advanced-training funds, and 87.5% of the exemptions benefit the top 3% of income earners.