The Labor Court has given permission to El Al Israel Airlines Ltd. (TASE: ELAL) to withdraw NIS 105 million from the provident fund that the state established for the company's employees.
The employees objected to the withdrawal of money from the fund, which totals NIS 516 million. It was established by the state when El Al was privatized, for the benefit of employees who continued to work for the company. At the time, the state deposited $108 million in the fund. The Histadrut (General Federation of Labor in Israel) and the Ministry of Finance approved the withdrawal, but the employees opposed it.
El Al sought to withdraw NIS 115 million, but the court allowed a withdrawal of NIS 105 million, which it described as excess funds, while the balance will cover the company's commitments to eligible employees.
The court called on the company and the employees to cooperate on a recovery plan.
Meanwhile, a lawsuit filed by the state in 2014 against El Al demanding NIS 116 million from the fund will continue to proceed.
Most of the people for whom the fund was established have already retired or left El Al. Some 250 eligible employees remain, but the money to which they are entitled, totaling some NIS 60 million, has been deposited in personal funds for them, and so the court found that the money accumulated in the fund represents a surplus.
The Histadrut stated that the money was earmarked for paying salaries to 700 employees currently working (the remainder of the airline's workforce is on unpaid leave), while El Al described the money as "vital air".
The Histadrut demanded that the remaining NIS 10 million should be used for enhanced severance pay for employees who will be laid off in El Al's streamlining program, which is a condition for obtaining a state-guaranteed loan.
Published by Globes, Israel business news - en.globes.co.il - on May 3, 2020
© Copyright of Globes Publisher Itonut (1983) Ltd. 2020