If Clubmarket fails, NII pays out millions
The institute would pay NIS 60-70 million in unemployment compensation for the dismissed employees, and a further NIS 150 million to cover their severance pay, which the debt-laden company could not afford.
The National Insurance Institute will pay approximately NIS 250 million to the 3,500 workers at the troubled Clubmarket chain if it shuts down, according to internal NII figures.
The institute would pay NIS 60-70 million in unemployment compensation for the dismissed employees, and a further NIS 150 million to cover their severance pay, which the debt-laden company could not afford. The NII would also have to lay out additional funds for income supplements for some of the dismissed workers.
Clubmarket, the third largest supermarket chain in the country, is under temporary court protection and bids to acquire it have been invited, to be submitted this week.
If no sale is forthcoming and - as has been heavily hinted by Judge Varda Alshech of the Tel Aviv District Court - the owners do not agree to inject large amounts of their own capital to save the chain, the company would collapse, closing its doors and sending all 3,500 workers to the unemployment lines.
Even if a sale does go through, it is believed that the new owners would close at least 40 stores, leading to heavy job losses.
The "Clubmarket effect" has taken its toll on the company's suppliers as well, the largest group of creditors hit by the chain's troubles. Clubmarket owes some NIS 1.3 billion, mostly to its suppliers. They in turn have had to downsize. Strauss-Elite, Tnuva and others recently announced job losses among their employees working with Clubmarket stores, and each also laid off around 50 workers employed through personnel agencies.
Analysts say that the smaller suppliers, who relied on Clubmarket for at least 30 percent of their revenues, will have trouble surviving. These will also be sending pink slips to hundreds of workers, and an estimated 3,000 people are expected to face a new job search.
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