Bank Hapoalim (LSE:BKHD; TASE:POLI) and the Histadrut (General Federation of Labor in Israel) have reached a deal to end their confrontation and legal battle. A Bank Hapoalim team, led by chairman Shlomo Nechama and CEO Eli Yones, and Histadrut leaders, led by chairman MK Amir Perez, held all-night intensive marathon talks to reach the deal. The dispute broke out over the massive lay-offs by Bank Hapoalim.
A key clause in the deal was the reduction of the lay-offs from 900 to 793. Employees already laid off will not be rehired; the 107 employees whose jobs were saved had only been candidates for lay-offs, but had not actually been fired yet.
The agreement also stipulates that Bank Hapoalim will award one-time grants totaling NIS 15 million to the laid off employees. 500 laid-off employees, who were ineligible for full pensions, will receive NIS 10,000 each, and the 300 employees laid off under the compensation plan will receive NIS 25,000 each.
Bank Hapoalim will also establish a NIS 2.5 million fund to help distressed laid-off employees. A committee comprising representatives of the bank’s management and workers committee and the Histadrut will manage the fund. The money is for laid-off employees with severe social problems.
Another key clause is the withdrawal of all claims by the bank’s management, workers committee and Histadrut against each other, including those filed by National Union of Clerical, Administrative and Public Service Employees chairman Leon Morozovsky and Bank Hapoalim workers committee chairman Charlie Amsaleg.
The agreement in principle has not yet been signed. The parties’ attorneys will meet in the coming days to formulate and sign a formal agreement.
The negotiations between Bank Hapoalim’s management and workers committee and the Histadrut began yesterday morning, when Bank Hapoalim controlling shareholder Shari Arison invited Perez to a meeting at her home to discuss the dispute.
This morning, Yones updated the bank’s employees about Arison’s meeting with Perez and its results. He detailed last night’s agreement, including the reduction in lay-offs, additional grants, and a commitment not to lay off more employees, except with the consent of the workers committee.
The cost of the agreement and improved lay-offs terms will cost Bank Hapoalim NIS 15 million. A key clause, in addition to canceling the impending lay-offs of 107 employees, is the bank’s written promise not to fire additional employees, except under extraordinary and dire circumstances and with the consent of the Histadrut and bank’s workers committee.
Published by Globes [online] - www.globes.co.il - on February 13, 2003