Public sector pay agreement to be signed next week

On Monday night, Histadrut (General Federation of Labor in Israel) chairperson Arnon Bar-David was at the Ministry of Finance until 3 am. His team and ministry officials were working on the final wording of the framework agreement for raising pay in the public sector. The Histadrut and the Ministry of Finance hope to sign the agreement this Monday, July 17, and the pay rise will go into effect immediately afterwards.

While the two sides were working on the agreement, in the nearby Knesset, the coalition passed at first reading the bill to abolish the reasonableness standard for decisions of elected officials, bringing tens of thousands people onto the streets in a “day of disruption”. Bar-David was under public and political pressure to harness the Histadrut to the protest, after he had called a general strike the day after Prime Minister Benjamin Netanyahu dismissed Minister of Defense Yoav Gallant in March, because of Gallant’s call for a delay in the judicial reform legislation to allow for talks between the government and the opposition (Netanyahu subsequently reinstated Gallant).

This time round, Bar-David held back. “When I feel that every possible avenue has been explored and the situation is on the brink, we will intervene and bring our strength to bear,” he said. “We are in a difficult period as far as the cost of living is concerned, and our first task is to care about the standing of the workers, the workers’ livelihoods.”

The framework agreement will mean an average 11% pay rise for workers in the public sector, implemented in stages until 2027. The principles of the agreement were settled in early March between Bar-David and Minister of Finance Bezalel Smotrich, shortly before the strike that made Smotrich, one of the leading supporters of the judicial overhaul in the government, furious, and clouded the already tense relationship between him and the unions.

The framework agreement should have been signed before now, with the first instalment of the pay increase, NIS 400 for every worker, originally planned for June, but it took longer than expected to finalize it.

Ofir Alkalai, chairperson of the state employees’ union and one of the people closest to Bar-David, commented to “Globes” on the tensions with the minister of finance, who has a declared agenda against organized labor. “I think that Smotrich realized that it was good for him to have one address, in the Histadrut, rather than deal with a collection of workers,” Alkalai said.

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He refused to disclose what exactly would be different in the final draft of the agreement from the original outline of four months ago, but he denies the claim that the Histadrut sought to increase the percentage element of the pay rise at the expense of the rise expressed in shekel terms, as the strong unions and those on high salaries wanted. “All the frameworks that were set will be maintained,” he says.

Another detail of the negotiations that Aakalai reports is a demand by the Ministry of Finance, which was refused, to allow free movement of civil servants between ministries and between jobs.

On the new mobility payment that, as previously reported by “Globes”, will replace refunds of car expenses for state employees, Alkalai says that all employees will receive the same, including those who up to now received car expenses. Where will the money come from? “We may have to use the amount set aside in the agreement for a solution.” This sum, of NIS 2.5-3 billion, was earmarked for solving problems that might arise during the period of the agreement. It will require approval from the Ministry of Finance Wages Division to release it. Ministry sources confirmed that the intention was to make use of these funds.

Published by Globes, Israel business news – en.globes.co.il – on July 12, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.