Histadrut protest [File].
(photo credit: Courtesy)
Marathon wage negotiations between the Finance Ministry and Histadrut labor federation bore fruit early Wednesday morning, preventing a public sector strike that would have started at 6 a.m.
The deal reached set a pay increase of 7.5% over 3.5 years. Half of the increased pay will come in the form of a shekel addition to the workers' salaries and the other half will increase their pay through a percentage increase of their base salaries. The deal covers the period between January 2013 and December 2017.
The Finance Ministry explained that the differential pay increase formula would decrease the wage gap between low and high salaried earners in the public sector thus achieving the ministry's goal of focusing the wage increase toward lower earners.
Finance Minister Moshe Kahlon hailed the deal as historic.
"The high salary earners demonstrated solidarity and said clearly that they are willing to sacrifice for the low wage earners," Kahlon said.
"After years of agreements that broadened the gaps between high and low earners in the public sector, we are bringing good news today," the minister added.
Histadrut chairman Avi Nissenkorn also lauded the deal as historic saying that it had "unprecedented significance" for society.
"For the first time, salary agreements have turned into an effective tool in narrowing the wage gaps in the public sector," Nissenkorn said.
He said the deal was a precedent that sets news norms for the entire economy.
A strike would have thrown a wrench into the country's economic gears, shutting down schools, transportation, ports, and government services (see box
), and inflicting between NIS 1 billion and NIS 3 billion of economic damage a day, according to Finance Ministry estimates.
Before the deal was reached a slew of ministries and organizations opposed to the strike filed court injunctions in an effort to postpone or cancel it altogether.
The Finance and Education ministries, together with the Jerusalem, Tel Aviv and Haifa municipalities, sought an injunction aimed at keeping the teachers’ unions from participating in the strike.
The teachers, they said, had agreed to “workplace quiet” until August 2017 when they settled a previous labor dispute.
The Federation of Israeli Chambers of Commerce sought an injunction to postpone the strike by at least six months, saying a deal could be worked out without such a threat.
The Manufacturers Association of Israel petitioned the National Labor Court, saying the strike would cost NIS 900m. in its first day, increasing to NIS 5b. if it continued for five days.
The private sector would suffer NIS 37m. in lost productivity alone, as the roughly 95 percent of goods that move in and out of the country’s ports would be stuck, it estimated.
“It’s clear to everyone that in the end a solution to the current crisis will be found, so it’s preferable to arrive at that solution before we lead the Israeli economy into the terrible tailspin the strike will create, and not after,” MAI President Shraga Brosh said.
The court sought to consolidate the injunctions and had not ruled as of press time.
Likud MK Sharren Haskel said the Histadrut was endangering the economy.
“For the fourth time in just one year, the Histadrut is threatening to use the power they have to shut down the economy.
The situation in which Israel’s economy and citizens are hostage to the Histadrut’s strike threats is absurd.”
Haskel said she would propose a bill on Sunday to limit the Histadrut’s ability to disrupt emergency services, in particular.