Israeli Union Calls for ‘Intensive’ Negotiations Following Halt to Strike

Israel’s Histadrut labor federation called for “intensive” negotiations after the National Labor Court cut short a general strike today that briefly halted trains and shut banks and the Tel Aviv Stock Exchange.

The court also told the Histadrut to return to talks with employer associations over the issue of contract workers and that both sides must give a progress report on Nov. 10, according to an e-mailed statement.

“The struggle for contract workers is just beginning,” Histadrut Chairman Ofer Eini said in an e-mailed statement. “We hope the government and employers will utilize the days given us by the court for intensive and genuine negotiations, and reach agreements.”

The strike is the first national labor action since social activists staged a series of protests beginning in July that have been directed against high prices and income inequalities. One in five Israelis lives in poverty, according to the Organization for Economic Cooperation and Development, which puts the average rate among member states at 11.1 percent. The cost of housing has increased about 40 percent in the last three years, according to the Bank of Israel.

The labor federation estimates about 250,000 Israelis employed through contractors receive on average about 30 percent less pay than comparable workers directly employed. The Histadrut is calling on the government to take stronger action to have them hired directly so they receive higher wages and benefits.

Obliged to Act

“Until now Eini has been relatively reluctant to call strikes,” Ben-Zion Zilberfarb, professor of economics at Bar Ilan University outside Tel Aviv, said in a phone interview. “So it may be that after the social protests this summer he felt obligated to take action that would put the Histadrut ahead of the social-welfare issue.”

Trading on the Tel Aviv Stock Exchange began late, at 11 a.m., and will close at 5 p.m. The TA-25 benchmark index fell 1.4 percent to 1097.01 at 12:12 p.m. Delays were reported in public transportation and flights at Ben-Gurion International Airport, where the strike began at 8 a.m., Israel Radio said.

Israel’s benchmark government bond rose yesterday, pushing the yield to the lowest level in a month as the strike threat boosted demand for safer assets.

Prime Minister Benjamin Netanyahu told the weekly Cabinet meeting in Jerusalem yesterday that he believes a “fair and responsible” solution can still be found to the contract workers issue. “We must bring a solution that will not harm the Israeli economy at a time that we are witnessing the upheaval of world markets,” Netanyahu said in a statement.

Finance Minister Yuval Steinitz said that while the government “is willing to do much to improve wages of contract workers and to maintain their conditions,” the use of contract workers is part of “the modern world.” Steinitz said the Histadrut also “needs to be concerned about management flexibility in all sectors, including the public sector.”

To contact the reporters on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net.

To contact the editor responsible for this story: Louis Meixler at lmeixler@bloomberg.net.

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