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The Bank of Israel wage agreement, signed this week, ends one of the longest labor disputes in the history of Israel's civil service. Six issues over which the Finance Ministry could not reach agreement with the bank have been referred to an arbitrator, Eyal Avrahami, a labor court judge in Jerusalem. His decisions will be final and binding.

The pact signed on Sunday night ends the five-year struggle that began in November 2002, when the treasury's then wages director, Yuval Rachlevsky, canceled the central bank workers "efficiency bonus", which had been no such thing - it had been a mere perk added onto their paychecks for 10 years.

Finance Minister Roni Bar-On signed the agreement on the treasury's behalf in place of wages director Eli Cohen, because Ehud Olmert (as acting finance minister at the time) removed Cohen from talks with the central bank, over his refusal to accept certain terms for Bank of Israel employees.

New central bank workers will receive about 40 percent less than the incumbents, and veteran workers will have to return some excess pay. One sticky point left for Avrahami's discretion is the period of time the refund will cover.

The Finance Ministry is meanwhile demanding that the Bank of Israel workers return money unlawfully received from 1998, but the central bank representatives say they will only accept a refund starting from 2003. The refunds apply to almost all the bank employees and start at tens of thousands of shekels.