A three-day general strike over conditions of outsourced workers ended on Sunday with an agreement under which only a relatively small number of these workers in the public sector will be hired directly.

Nevertheless, the agreement, signed by Histadrut labor federation chairman Ofer Eini and Finance Minister Yuval Steinitz, improves pay and benefits for cleaners and security guards.

The end of the strike was made possible when the Finance Ministry withdrew its demand that the Histadrut pledge not to strike for four years over outsourced workers. As a compromise, the Histadrut agreed that it would not raise demands with regard to pay for outsourced workers for a period of three years.

Another dispute was resolved when the parties decided to establish a joint committee to decide which subcontracted workers constituted "core professions," as far as the employer is concerned, and would be hired directly. Such "core professions" include bank tellers, factory assembly-line workers, chambermaids in hotels and messengers.

According to the agreement struck between Eini and Steinitz, following a night-long bargaining session, municipalities and government ministries, university administrations and other public agencies will hire outsourced workers directly when these individuals do the same job as employees directly on the payroll, following approval by the joint Histadrut-treasury committee and the nine-month initial employment period as a contract worker.

These conditions will apply, for example, to municipal social workers considered outsourced because they are hired through a social service organization, and to psychologists working under such conditions.

The treasury adamantly opposed the Histadrut's demand for the direct hiring of thousands of cleaners and security guards working in ministries and local government and other public agencies. However, the agreement stipulates that these workers will be paid no less than NIS 4,500 a month and will be included in any pay hikes given in the public sector.

For example, public sector workers are due a 2.25 percent pay raise in January 2013 and another 1 percent in 2013, which will bring their salary to a total of NIS 4,650.

Cleaners and security guards will also receive all the social benefits due salaried state employees, including an increase to 19.5 percent of the deduction to their pension fund.

The agreement is far from the goal the Histadrut set when it embarked four months ago on its campaign to improve the status of outsourced workers. That goal was to significantly reduce the number of such workers, which is estimated at 350,000 to 400,000.

However, Eini can chalk up the achievements of putting the issue of subcontracted workers at the top of the public agenda, and holding a strike in which a number of labor groups in the public and even in the private sector showed solidarity with the weakest group in the Israeli labor market.

The treasury did agree to put 600 subcontracted employees - mainly auxiliary personnel - directly on the payroll at homes for the developmentally disabled operated by the Social Affairs Ministry. This will happen once they have worked for nine months under subcontract.

The new agreement's requirement that employers equalize the labor conditions of subcontracted workers will make it more expensive to employ subcontracted workers and will serve as an incentive to hire them directly.

Outsourced employees working in places where employers are bound by a collective wage agreement will benefit by that agreement's conditions, even though they remain in their outsourced status, one of which is an extra month's salary once a year.

Speaking at a joint press conference with Eini on Sunday, Steinitz said: "We understood the issue of outsourced workers deserved a historic correction."

He said the agreement strengthened Israel's weakest workers without harming the economy, and that Israel was the only Western country that had taken such a step in the last three years of global economic crisis.

The chairman of the Union of Local Authorities in Israel, Sholomo Buhbut, said local government would not be able to implement the agreement without additional funding to the tune of about NIS 1 billion.