Israel Discount Bank (TASE: DSCT) signed a collective wage agreement with its employees for 2019-2021, and will continue its streamlining program during that time. The agreement includes a NIS 450 pay rise for clerical staff and NIS 600 for managers. The increase will be differential and performance-based.
After Discount Bank's workers with more seniority were previously granted exceptionally good terms, the bank stated in its announcement, "The salary ceilings were revised for all newer workers… Recreation pay will be revised for newer clerical staff… The provision for benefits will be increased from 6.5% to 7.5%," while at the same time, "The workers will sign an agreement ending the provision - Section 14." The bank will not have to pay severance pay if employees are laid off, or pay an extra month's salary for each year of seniority in retirement arrangements, which will make things easier for Discount Bank.
Discount Bank is also increasing the minimum monthly salary for compensation to NIS 6,500, and "It will be adjusted in two stages by 2020." The bank is also a bonus for workers, stating, "All of the bank's workers will receive a return-based bonus based on the graduated bonus mechanism stipulated in the previous wage agreement, which links return on equity to the annual employee bonus in 2019-2021."
Discount Bank, managed by CEO Lilach Asher-Topilsky, said, "The new wage agreement is in accordance with the bank's multi-year strategic plan. The bank believes that it will have no material influence on its profits in 2018-2021."
Discount Bank's management devised a streamlining plan in 2016 in which the number of the group's employees would by cut by 1,000 by the end of 2021, "through both early retirement and natural retirement." In any case, at the end of 2017, Discount Bank had 5,666 employees in Israel, excluding subsidiaries, filling 5,192 jobs. At the end of 2017, "The bank's average direct salary cost per employee in Israel" was NIS 261,000, compared with NIS 246,000 in 2016 and NIS 241,000 in 2015. The total cost per employee was NIS 406,000 in 2017, NIS 400,000 in 2016, and NIS 372,000 in 2015.
The bank's previous wage agreement, signed in 2016, was valid until the end of 2018. First International Bank of Israel (TASE: FTIN) also reached understandings with its employees on a new agreement in recent days.
Published by Globes, Israel business news - en.globes.co.il - on January 13, 2019
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