Israel Electric Corporation (IEC) (TASE: ELEC.B22) workers have rejected the government's offer to convert their free electricity benefit into financial compensation. The offer was discussed in negotiations with the Yogev Committee on IEC reform which ended at midnight on Monday.
Agreement was reached on several issues, but others remained open. Another meeting has been scheduled for Thursday or next Sunday. The inter-ministerial committee chaired by Government Companies Authority director Ori Yogev hopes to complete its discussions on reforming the electricity market and IEC by the end of February.
There have been reports in the past few days that the government was prepared to offer IEC workers NIS 1,000 a month to compensate for giving up their free electricity, up to double the average household annual electricity consumption. However, in the talks, the IEC workers were not told how much the compensation would be, but were asked to give their consent in principle. IEC workers committee representatives rejected this. Parties involved in the talks said, however, that this was not the final word.
A major disagreement also emerged between the IEC workers committee and the Yogev Committee over personal contracts. The Yogev Committee wants IEC managers above department deputy manager and 120 employees in special positions - 240 employees altogether, amounting to 3% of its workforce - to switch to personal contracts. The workers committee initially only agreed to personal contracts for 15 VPs, but after long talks, agreed to include 20 department managers.
The IEC workers committee also agreed to change the balance of power between it and management as part of the IEC reform, voluntary retirement, and flexible administrative income. It agreed to reduce the number of fixed positions from the current 10,000 to 8,300 and to add 1,500 non-tenured workers and that management can fire non-tenured employees, but it opposed the establishment of a mechanism for firing tenured employees because of lack of suitability. The workers committee demanded NIS 100,000 compensation for the remaining employees, while the Yogev committee agreed to NIS 50,000 in three installments.
For the first time in IEC's 90-year history, the meeting agreed to demolish the principle of equality with regard to employee transfers, promotions, disciplinary committees, and tenders. Until now, the workers committee and management had equal power in all these issues.
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2014
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