New law means thousands of long-term temp workers may be fired

The new legislation requires employers to put workers provided by temporary-employment agencies on the company payroll after nine months' service.

TA stock exchange 224 88 (photo credit: Bloomberg)
TA stock exchange 224 88
(photo credit: Bloomberg)
Thousands of temporary workers could be laid off as a result of the new amendment to the Employment Law, which requires long-term temps to become permanent staff from October 1, the Association of Manpower Contractors warned Tuesday. "Employers are not interested or cannot hire temporary manpower staff and therefore thousands of layoffs can be expected," the association said. The new legislation, which came into effect on January 1, requires employers to put workers provided by temporary-employment agencies on the company payroll after nine months' service. The period of nine months is coming to an end and therefore manpower companies and human resources agencies have sent out letters to temporary workers that their contract will end as of October 1, as requested by the new law. The new law affects as many as 100,000 workers. It was intended to turn long-term temps into permanent staff. However, according to the new law, employers can decide to refuse to hire temporary workers. As a result, thousands of layoffs are expected. In response to the association's warning, Histadrut Labor Federation chairman Ofer Eini said the union would take legal action against employers who refuse to hire their temp staff. "Every manpower temp who will not be hired can turn to the union and will be entitled to full protection by the Histadrut," he said. A number of large companies and banks have already announced that they will hire temp staff employed through manpower companies. In July, Bank Hapoalim announced that it would hire 1,200 manpower temps working at the bank as permanent staff. Bank Leumi said it will hire about 500 temp staff. Bank Discount is also expected to hire its temp staff as permanent staff. Another option is that employers will turn to service providers, since the amendment to the Manpower Contractors Law does not include service providers such as security companies and outsourcing subsidiaries of personnel agencies. In practice this enables them to bypass the new legislation paying temp workers the same salaries as permanent employees, without having to offer them the same benefits package.