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One of the last obstacles hindering the privatization of Oil Refineries was removed yesterday after a compensation agreement was reached with the refining monopoly's workers. Each will receive a privatization bonus of five monthly salaries plus a special blanket bonus of NIS 70,000. It also includes more bonuses and employment assurances.

Since the average gross wage at Oil Refineries is NIS 12,000 a month, the average "privatization bonus" works out to NIS 130,000 per worker.

"The agreement is an important step in the process of splitting and privatizing Oil Refineries," commented Koby Haber, the budget director at the treasury.

Altogether the agreement will cost the government, which controls Oil Refineries, NIS 36 million. Nor is that all. Irrespective of the privatization and the accompanying bonuses, the workers will apparently be receiving a share of the company's record profits in 2005, amounting to about two monthly salaries apiece, or an average of NIS 24,000.

The agreement in principle was achieved in the dawn hours of Tuesday morning after a night of negotiations. Signatories include Histadrut labor federation chairman Ofer Eini, the treasury's budget directors Koby Haber, Oil Refineries chairman Ohad Marani, the chief of the energy sector workers, David Galanos, Government Companies Authority manager Eyal Gabbay, and representatives of two unions operating at Oil Refineries.

The collective employment, which the sides agreed would enable the government to proceed with its privatization plan, entails selling the Ashdod refinery outright and floating the bigger Haifa one on the Tel Aviv Stock Exchange.

The agreement also assures the Oil Refineries of employment until they reach retirement age, though sixty will be considered early retirement. The private companies that buy refineries will be entitled to dismiss workers only with the acquiescence of the relevant unions, and for compensation beyond that set in law.

If the new owners want to reduce their manpower, they will be entitled to require workers above 50 years of age to accept early retirement.

New workers would be "second generation", meaning they would not be entitled to the same generous employment terms as the present employees. It would be easier to fire them, too. But some currently working as temps at the government company will be instated as regular workers.

The present employment agreement in force at the company, setting down terms of pay and compensation, will remain in force until 2010. The workers will receive a 7 percent pay raise in that time, plus 3 percent more if the company is profitable.

The Government Companies Authority undertook before the Finance Ministry and unions that the Haifa refinery would maintain minimal equity of NIS 2 billion, while Ashdod's will be half that amount. Also, NIS 400 million will be deposited in trust for 25 years to guarantee pensions.

Ofer Eini commented that the Histadrut and the workers had proved an excellent agreement could be achieved through cooperation, without resorting to strikes.

The privatization process for the Ashdod port has already started and four groups are now competing over the tender.