Court delays layoffs at Teva Ashdod

Teva Ashdod workers' demonstration  photo: Histadrut

The Beersheva District Labor Court was responding to a petition against Teva by the Histadrut.

The Beersheva District Labor Court ordered a delay this morning in the pre-dismissal hearings for the workers at the Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) plant in Ashdod. The court handed down its order in response to a petition by the Histadrut (General Federation of Labor in Israel) for an injunction and suspension of the dismissals until a buyer for the plant is found.

Teva plans to shut down the plant by 2019, with half the workers due to be laid off now, and half when the plant finally closes. Judge Yonatan Cohen ordered the parties to discuss the possibility of selling the plant as a going concern. A further hearing has been set for June 7.

"The parties should be allowed to enter into businesslike, open negotiations in good faith on all the matters in dispute, in order to try to reach an arrangement on all matters concerning the closure of the plant," the judge said in his ruling.

"The court believes that there is room for postponing execution of the company's decision, and not sending notices of hearings, but rather to discuss matters with the workers committee and consult it on future options and possibilities in order to protect the workers' rights appropriately and not carry out the painful solution of dismissing them within a month.

"At the same time, the court is aware of Teva's difficult position, a severe crisis in which the company is having to deal with the most difficult and complex business and financial situation in its history, and which no-one disputes is real. It is no secret that the company has been forced to carry out painful measures, such as laying off 110 workers at Teva Tech at Ramat Hovav, in agreement with the Histadrut, and other painful steps intended to rehabilitate the company, which has huge debts… the company has the prerogative to carry out painful measures given its extremely difficult position," the court ruling further states.

Teva's Ashdod plant is due to close as part of Teva's comprehensive streamlining plan, against the background of its dismal financial position and its large debt ($32.5 billion at the end of 2017). The plan calls for laying off 14,000 Teva employees, 1,700 of them in Israel.

In the petition it filed in the Labor Court last week, the Histadrut accused Teva of lack of good faith, and claimed that there were potential buyers interested in the Ashdod plant. Teva responded that it had examined the possibility of selling the Ashdod plant but had reached the conclusion that a sale was not feasible.

Published by Globes [online], Israel business news - www.globes-online.com - on April 29, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Teva Ashdod workers' demonstration  photo: Histadrut
Teva Ashdod workers' demonstration photo: Histadrut
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