Pension plays

Fair employment practices could rescue many from below-poverty-line subsistence.

January 1, 2008 21:14
3 minute read.
The Jerusalem Post

3011-freedman. (photo credit: Bloomberg/Illustrative photo)


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analysis from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


Two ostensibly beneficent items of legislation were signed into law this week - one that guarantees tenure to manpower company employees after nine on-the-job months, and another that guarantees pensions to those at the very bottom of the wage scale. On the face of it, this is long-overdue justice. In reality, however, nothing is quite what it appears. Many of the conservatively estimated 100,000 manpower contractors' personnel are likely to be fired from their positions as temps just before their first nine months are up and then rehired all over again - without tenure, in contravention of minimum-wage regulations and without pension provisos. The predicament of such workers, moreover, runs deeper because the tenure law teeters atop a gigantic loophole. Curiously it applies only to companies that supply workers - i.e., manpower companies. It specifically leaves out of its apparently forward-thinking arrangements companies categorized as supplying services rather than hired help. Any workers - including cleaners, security guards, phone operators and caregivers - whose employment was procured via a "service-provider," as distinct from a manpower-provider, will remain unprotected by the seemingly well-intentioned provisions of the new law. In essence, all that's required of a manpower company to avoid the new strictures is to alter its formal designation to that of a service-provider. Some have already gone that route and cannot be legally challenged for having spotted the escape hatch left open by the government. This was no accidental oversight, either, but a provision upon which the government insisted. While the government is in charge of enforcing labor laws, it also happens to be the single largest client for manpower firms. Truly regulating the anarchy and improving employment terms would inevitably mean greater expenses, which the government is loath to undertake. In other words, the government operates under a serious built-in conflict of interests here. Indeed, having anticipated the new legislation, tenders issued by the government of late are specifically tailored for "service companies," as opposed to manpower contractors, with a clear eye to circumventing the purportedly broad-minded new policy. A similar optical illusion exists in the ostensibly progressive new pension arrangements. Nearly a million employees here have no pension plans. They tend to be the lowest earners, least protected by legal frameworks or the unions. Though the new legislation is welcome, as is any arrangement that includes them in pension schemes, the self-congratulation by the Histadrut and officialdom, and the talk of a "revolution," is misleading. The new deal is unlikely to guarantee a worthwhile pension for most of those on the lowest rungs of the socioeconomic ladder. While they will give up 5 percent of their already meager wages, their employers will be required to shell out 10%, which is less than required in existing arrangements. Since the gross pay involved is low, the overall sums set aside will also be inadequate to insure respectable incomes to any but the youngest subscribers to the new plan. Those already in their late 20s and upwards will not be able to save enough to get by even minimally after retirement. Worse yet, the new scheme doesn't apply to the most exploited of employees - those contracted via the above-mentioned manpower or service companies. They tend to be particularly weak and unorganized. Employers won't have a hard time dodging the new regulations, if need be, by sacking employees periodically to avoid pension expenditures. Moreover, pension-providers will have little incentive to market and advertise packages geared to the least-paid employees. True, a flawed pension plan is preferable to none at all, but that shouldn't cover up the fact that the fanfare about "a pension for every worker" is not only premature but disingenuous. In both new laws, there is too little real substance or progress and too much window dressing. The plight of manpower contractors' employees is acute - no matter what name or designation these firms use when they do business from now on. It affects not only unskilled manual laborers, but also semi-skilled and skilled personnel, many of them immigrants, who, without better contacts and familiarity with our society, fail to climb out of the lowly existence in which they find themselves. Fair employment practices could rescue a great many from below-poverty-line subsistence. Rather than seeking to impress the public by creating a falsely favorable façade, this ought to be the government's primary concern.

Related Content

PRIME MINISTER Benjamin Netanyahu and India’s Prime Minister Narendra Modi
June 17, 2019
The Wahhabi threat that India is ignoring


Cookie Settings