The strike: winners and losers

Following the end of the general strike on Sunday, we can begin evaluating the results and examining the behavior of the two sides involved in this important struggle.

I will start by saying something unexpected: The Histadrut, Israel’s powerful labor federation, made some considerable achievements. It may not have achieved the goal for which the strike was initially called, but the Histadrut certainly succeeded in improving the status and working conditions of those we call “contract workers.” The Histadrut also clearly understood that it cannot move a mass of contract workers into direct employment, neither in the public sector nor in the private and commercial sectors.

The Histadrut espoused the idea of direct employment as an effort to continue the summer’s social protests. Yet what actually matters is that contract workers’ terms are going to improve: They will receive additional wages, retirement accounts and equal social benefits, regardless of which department they work in. There is greater awareness among the public and the government about the need to improve contract workers’ conditions and their futures. You could say that important groundwork has been laid, and that we are headed in the right direction. For this reason, the contract workers themselves can be crowned the big winners of this strike.

We must remember that contract workers have employers, and we must also remember that since its establishment Israel’s legal system has ensured that workers’ fundamental rights are protected. Laws such as the Annual Leave Law (which guarantees vacation days); the Wage Protection Law, designed to ensure timely payment of salaries and high wage withholding allowances; the Work and Rest Hours Law, setting a quota of acceptable daily working hours; the Minimum Wage Law; and the Sick Leave Pay Law, which recently went through a considerable improvement, are among the country’s labor laws. These apply to all employees in Israel. This paves the way for broad lateral and sectorial labor agreements to continue improving working conditions for contract workers as well.

Finance Minister Yuval Steinitz and his office deserve special recognition for their conduct in handling this conflict. They see what is happening today in Greece and Spain and understand that moving contract workers to direct employment in one fell swoop endangers both the future of business and the economy. They understand that such a move would create unemployment, as many employers would prefer to limit the scope of their businesses rather than absorb workers as direct employees.

The finance minister and his colleagues also understood that it is better to endure a few days of a strike than to agree to structural changes that would weaken our economic future in terms of global competition.

The person who failed, surprisingly, in this process is the Coordination Bureau of Economic Organizations, which represents leading industrial and economic organizations in Israel. In an attempt to weaken the Finance Ministry, bureau chairman Shraga Brosh took a drastic step and reached a puzzling agreement with the Histadrut (which includes a partial transfer of some contract workers to direct employment). Does anyone really believe that employers will directly employ maintenance and janitorial workers who have already reached retirement age? Are Israeli employers prepared to have a third party determine for them which employees are crucial to their business? Agreeing to allow an external party to define the core of one’s business is the most far-reaching concession an employer could make.

This is a fundamental concession with regard to free business management. An employer who cannot adapt his or her employment structure to changing market conditions cannot survive. History has provided clear examples of this. Thirty companies that were owned by trade unions collapsed in the 1980s due to the Histadrut’s ideology that companies must directly employ all their workers and not reduce the number of employees.

It is not clear at all that the Coordinating Bureau’s agreements with the Histadrut are binding. The Coordinating Bureau is not a legal entity, but rather a forum for coordinating between separate legal entities. If those legal entities do not sign this agreement, it will lack legal validity.

I have always said that the person who most fears a prolonged strike is Histadrut chair Ofer Eini. He understands the limits of power. But he need not be disappointed by the outcome of the strike, if the troubles of contract workers truly concern him. The contract workers for whom the Histadrut went to bat did, in fact, gain some considerable achievements from the strike.

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