El Al management and workers are expected Tuesday to sign a new collective employment contract after the airline carrier's labor union okayed terms reached with the board on Monday.

The union declared a dispute on June 28, and warned it might go on strike the following day to protest the board of executives' intention to authorize management cancel the existing collective contract, slated to legally expire year's end.

The pilots' union also threatened not to fly two new Boeing airplanes waiting in Seattle if alleged foot-dragging over the new collective agreement continued.

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According to the understandings, a new collective contract will be signed extending up to 2010. Workers will receive a 1.5 percent raise annually, starting from 2008. Management will be able to offer engineers and computer technicians hire salary rates than those given employees hired under the collective contract.

Management will also be able to sign personal contracts with 40 new employees.

El Al workers agreed to receive voluntary retirement fund rates estimated to save the company some 15 million dollars.

Airline company management said in response that it is: "doing all it can to promote dialogue on the basis of a strong, stable El Al, for the benefit of workers ,owners and passengers."