135 employees of Dead Sea Works, of the Israel Chemicals (TASE: ICL: NYSE: ICL) group, who were summoned to pre-dismissal hearings, are just the start: at the same time as the layoffs at Dead Sea Works, the management of Israel Chemicals, which is controlled by Idan Ofer's Israel Corporation (TASE: ILCO), continues in its attempts to terminate the employment of 144 employees at Bromine Compounds at Neot Hovav. With the completion of the downsizing at these sites, the company plans to consolidate head offices in the group and carry out a restructuring, in the course of which 30 more employees will be laid off.
Israel Chemicals explained the decision to hold pre-dismissal hearings at Dead Sea Works by the need to adjust the group's activity to the world potash market and to the implementation of the recommendations of the Sheshinski 2 committee, which recommended that from January 2017 Israel Chemicals should pay the state a 54% surtax. Israel Chemicals announced its intention of cutting its workforce and freezing investment plans amounting to billions of shekels in Israel some time ago, and invited the Dead Sea Works workers committee to enter negotiations on implementation of some of its plans. The negotiations ran aground, however, and the Dead Sea Works workers committee claims that the company is carrying out unilateral steps.
In the past two and a half months, the workers committee, headed by Armand Lankri, has applied sanctions that have led to disruption of supply to customers such as Haifa Chemicals. The events at Dead Sea Works are taking place while talks continue between the workers committee at Bromine Compounds, headed by Avner Ben-Senior, and company management in an attempt to reach agreement on the dismissal of 144 employees.
Last night, Histadrut (General Federation of Labor in Israel) chairman Avi Nissenkorn convened the heads of the workers committees of Israel Chemicals and of the other companies in the Israel Corporation group, among them Oil Refineries Ltd. (TASE:ORL), Zim Integrated Shipping Services Ltd., and Israel Chemicals Fertilizers, at his office in Tel Aviv. At the end of the meeting it was declared that a joint action committee would be set up headed by Nissenkorn, because Israel Corporation was acting unilaterally against the workers committees of all its companies in Israel. "The group's workers will act in unison against any step that harms organized workers and organized labor, and the committee will act with determination. We will not accept a situation of divide and rule," Nissenkorn said.
Israel Chemicals said in a statement today, "In the light of the government's decrees, among them the exclusion from the Law for the Encouragement of Capital Investment, the salt harvesting agreement, and the recommendations of the Sheshinski 2 committee, Israel Chemicals will be forced to pay a further NIS 1.5 billion to the state, in addition to the NIS 1 billion a year that it currently pays. This harsh reality is made worse by the crisis in the fertilizers market and the sharp fall in prices. As a result, Israel Chemicals has to behave responsibly and to adapt its business strategy in Israel to the reality that has been forced upon it.
"As part of the company's change of strategy, a comprehensive streamlining plan was drawn up and was presented to the workers committee at length several months ago, with the intention of conducting serious and businesslike negotiations aimed at agreement on implementation of the plan. Unfortunately, for months, the workers committee has refused to conduct serious negotiations, and has instituted a series of unilateral moves, including work sanctions causing harm to the company. In the light of the workers committee's behavior, the company's management has been left with no choice but to summon the employees directly for pre-dismissal hearings."
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2015
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