Shekem acting managing director Yoel Gabbay confirmed today that Elco Industries will cease operating Shekem canteens as of May. After that, the Ministry of Defense will be responsible for them. However, Gabbay said the work dispute declared by employees is unnecessary, since the collective work agreement is valid through August 31.
Gabbay was responding to an announcement by Shekem's workers committee that it would shut down all Shekem's operations, including its canteens, Shekem Electric, Sensor, and the recreation division after the Passover holiday. Gabbay stated in a letter to employees that the January 1998 agreement to operate the Shekem canteens was an interim agreement to allow the Ministry of Defense to prepare a tender to select a company.
Gabbay said the Ministry of Defense had published several tenders for the Shekem canteens, but they all failed. Consequently, the ministry announced it would take over responsibility for them as of May 2002.
Gabbay noted that Shekem's management will help in the transfer of employees to the new franchisee, including all employee rights Shekem is committed to under the collective work agreements. He said a follow-up court hearing will be held on Thursday to discuss the employees' class action suit to recognize the Ministry of Defense as a co-employer, and to include their continued employment in the terms of the tender for a new franchisee.
Published by Israel's Business Arena on 12 March 2002