Press Release: Finance Ministry Wages Director and the Chairman of the Histadrut signed an agreement on April 17, 2008. Within this agreement, public employees will receive a wage increase of 5%.
Ofer Eini, the Histadrut Chairman and Eli Cohen, Finance Ministry Wages Director, signed a new wage agreement on April 17, 2008. Within this agreement, public employees will receive a wage increase of 5%. The agreement was signed on the basis of principles which were reached between the Histadrut and the Minster of Finance on July 26, 2007. Under the terms of that accord, the Histadrut was obliged to forego labor disruptions until December 31st, 2009.
Chairman of the Histadrut, Ofer Eini, said that the supplements that the pensioners received indicated the commitment of the employees who are affiliated with the Histadrut, towards their pensioner colleagues.
The Finance Minister, Ronnie Bar-On, blessed the signing of the agreement and said that an important and central agreement was achieved in the labor domain. "It is a responsible agreement which provide benefits to the workers and the pensioners as well as taking into account the budgetary limitations of the government and the capability of the economy". The Minister added that the agreement guarantees industrial peace and therefore enables the private sector to conduct proper economic activities within the Israeli economy.
Finance Ministry Wages Director, Eli Cohen, stated that signing the agreement indicated the end of a lengthy period of negotiations. Within these negotiations, agreements were reached within the public sector with the Teachers Union, the Secondary School Teachers Association, the Academic Senior Lecturers Organization, as well as the New Histadrut. "It is a fair agreement for all sides and is focused on two main areas: wage increases for public sector employees, compensation for the erosion in benefits received due to inflation for pensioners, as well as changes in the mechanism for calculating the Consumer Price Index. Cohen added that it is an agreement that deals with the mechanism of the budgetary pensions in a fair manner.
According to the agreement, public sector employees will receive a 5% pay raise according to the following spread: 1.5% retroactive to January 2008; a further 1.5% in December 2008; and the final 2% which will be added in December 2009. In the coming months each trade union will negotiate with the Finance Ministry Wages Director in order to reach an agreement to determine the supplement division among the workers in the union. The supplement will be provided after the signing of the agreement of each union.
It was decided that the first payment, which includes the period between January 2008 until November 2008, will be given as grant of 16.5% by next June (supplementary of 1.5% per month multiplied by 11 months). The grant will be paid to all workers and employees with a budgetary pension. The sides decided to give the grant in order to benefit pensioners whose pension, according to the existing law, is linked to the wage of an active employee at the same wage level.
The Finance Ministry will act to change the law in order to implement the mechanism of updating the pension of the government employees. According to the agreement, the pensioners' pensions will be linked to the Consumer Price Index (CPI). The payment in June was designated to enable the pensioners to receive the payment as soon as possible, without waiting for signatures on agreements by each union, or in a change of the law.
The Histadrut and the Finance Ministry explained that the change in the link to the Consumer Price Index (CPI) is designed to guarantee the updating of pensions which will be regular, obvious and fair on behalf of pensioners. The new mechanism will enable an automatic updating of the pension, once yearly, fully linked to the change in the CPI, as opposed to the current index which exists in existing wage agreements that are signed every few years. The date for the change will be valid, according to the suggestion, at the end of 2008.
In addition, it was determined that pensioners with budgetary pension will receive the full 5% of the wage increase benefit and they will be provided with a one time increase for the compensation due to effects of the inflation of 5%-12% (according to the date of retirement) during the period of 2008-2010. It was also decided to establish a Welfare Fund for pensioners and accordingly, the employers will allocate a gross sum of 393 NIS per year per pensioner. In addition, pensioners will receive a supplement due to the increase of the CPI.
It was also agreed upon by both sides that the retirement rank which is provided according to the civil service regulations, will be anchored in the collective agreement in order to guarantee its existence.
Furthermore, it was decided to establish a committee which will examine the public sector employment structure with the participation of the Finance Ministry, Civil Service Commission and the Histadrut.