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The state will pay part of the salaries of absent workers in the north who stayed away from work on instructions from the Home Front Command, it was agreed Monday afternoon in a meeting between officials from the Finance and Industry Ministries, industrialists and employees.

Treasury officials said the government will compensate employers for the absent workers because of the security situation in the north. This will allow all workers to receive this month's salaries.

Manufacturers' association president Shraga Brosh, said at the end of the meeting that "the compensation will be allotted in all areas that an order to go into bomb shelters was given," for the days that these orders were given.

It is still not clear, he added, whether the compensation will be for the full month's salary, whether the government will pay for salaries in full or if business owners would be expected to contribute as well.

Another meeting on the matter is scheduled for Tuesday.

A team of representatives from the Israel Defense Forces Home Front Command, the government, employers and the Histadrut labor federation will review when and where the order to go into bomb shelters was announced in an effort to calculate the amount of compensation.

The pending agreement does not seem to account for workers who were authorized by the IDF to show up for work - such as those who have shelters at work - but do not show up for fear of getting hit on their way.

Histadrut chairman, Ofer Eini, is advancing a draft law that he and Brosh had formulated. It calls for paying salaries to any working person living along the line from Haifa to Tiberias and further north even if they were absent from their jobs. The employer would then get a down payment from the treasury within one week.

"There can't be a situation where residents of the north suffer from Katyushas, but don't have money to buy food," Eini declared. "A hungry home front can't be a strong home front."

Meanwhile, the employers demanded that they receive compensation for additional, indirect damages caused due to the fighting, but no agreement was reached on these.

The secretary of the fruit growers association, Giora Sela, said Monday the accumulated damage caused to the fruit industry in the north due to the halt of fruit picking in the region has reached NIS 60 million.

With each day that goes by, he said, the damage increases by millions more.

Sela called for the government to immediately declare a state of emergency in the north, under which the growers will be eligible for compensation for lost crops.

Sela added that unless picking resumes, fruit distribution in the fall and winter would also be seriously hurt.

The law does not account for workers who miss working days due to the security situation, except for several regions defined within the confrontation line. The line currently lies 9 kilometers south of the Lebanese border.

All sides involved agree that workers in more southern areas should also be compensated, but the treasury fears the cost of such a move, especially if fighting lasts a considerably longer time.

Avi Eltar, former legal advisor to the Income Tax Commission, said ?One million people live in the north. If each is paid a monthly salary equal to the average salary in the market, which is over NIS 7,000, we will reach NIS 3.5 billion.?

Meanwhile, the government on Sunday approved preliminary legislation ensuring that employers would not dismiss people who stayed away from work on instructions from the security forces, or when their children's schools were closed for security-related reasons. The draft law, submitted by Labor Minister Eli Yishai, would be effective retroactively from the start of the fighting in the north, and is expected to be approved in the Knesset soon.

It was also decided Sunday that unemployed people would receive their pay on time, even though employment centers in the north have been closed since July 16. Yishai said whoever reported and claimed unemployment prior this date will be eligible.