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Histadrut labor federation chair Ofer Eini and Finance Ministry budget director Kobi Haber last week reached an agreement whereby Civil Service employees in whose salaries irregularities have been discovered will not have unilateral steps taken against them by either the treasury or the supervisor of wages.

Under the agreement, the treasury will not be able to automatically order the restriction of salaries or the return of excess wages paid to any employee in government offices, the local authorities and all other parts of the public sector. The finance minister will have to continue working through the Labor Courts or via the consent of the workers' representatives, in order to obtain the workers' agreement to accept the cancellation of their surplus wages.

The existing Budget Fundamentals Law contains a clause obligating the treasurer to petition the Labor Courts to order the workers to accept the return of their wages to the appropriate sums, in the event that excessive payments are discovered.

In recent months the Finance Ministry has been working toward altering this situation, such that the supervisor of wages can order public sector workers to forego the excessive portion of their wages without petitioning the courts. Finance Ministry officials have managed to include this amendment in the Economic Arrangements Law, which is part of the 2006 State Budget Bill.

The Histadrut, however, and the public sector worker's committees objected to this amendment, and after negotiations between the Histadrut and the treasury, the treasury agreed to stop trying to amend the law.

"The Histadrut has prevented an anti-democratic situation," said Eini, following the signing of the agreement, "in which the state can reduce workers' wages without granting them a legitimate right to defend themselves in court."

Another agreement, reached yesterday between Eini and Haber, states that the treasury will withdraw the clause in the Economic Arrangements Bill that worsens the savings terms of public sector workers with budgetary pensions. Under this agreement, there will be no cancellation of the 35-percent tax credit for public sector employees eligible for budgetary pensions, who have been contributing 2 percent or their monthly wages toward their pension rights since January 2005.