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Why did Finance Minister Benjamin Netanyahu agree to transfer NIS 175 million to Limor Livnat? Did he go soft? Did miserly Netanyahu suddenly turn generous? It seems that Netanyahu was afraid of the public uproar over the dismissal of 6,000 teachers - 4,500 employees of the Ministry of Education, and another 1,500 employed by local authorities and private firms. He realized it was too large a dose, and was afraid of more teacher strikes and protests building up and landing eventually on his doorstep, accusing him (as usual) of cruelty and of victimizing the weaker elements of society.

Moreover, let's not forget that the finance minister had set aside a few hundred million shekels, which he was supposed to give back to the Education Ministry, in the event that the teacher unions signed an agreement to implement the Dovrat reforms. Which means the money was there. In addition, there was the political consideration. Netanyahu wants Livnat as an ally in future battles over leadership of the Likud, so he wanted to give her a hand with her battle with the teachers.

Livnat, for her part, knew that if she disclosed immediately the sum she had received from Netanyahu (NIS 175 million), she would not be able to go through with the layoffs and also obtain the teachers' consent to the reforms. Livnat planned to keep this card very close to her chest, and to pull it out only at the very last minute, when she would have said to the teachers: I can reduce the number of layoffs significantly, on condition that you accept implementation of the Dovrat report. This would have clinched the deal. But the plan fell through when Haaretz exposed the ploy.

Now Livnat is on the defensive. The teachers are attacking her along with the ministry's director general, Ronit Tirosh, and she will have to make big compromises. The result will be that only 2,500 teachers will be fired, rather than 4,500 - and in fact an even smaller number than that.

Some of the teachers, about 1,200, will be leaving the system anyway. They have either reached retirement age, or they are untenured. That leaves 1,300 teachers, not all of whom will be fired - some will retire voluntarily. What then is the difference between a dismissal and voluntary retirement? In a business organization there is a huge difference. A company's management will fire anyone who is deemed unsuitable, inefficient, or who does not contribute to the firm, or in economists' terms: anyone whose productivity doesn't justify his wages. Layoffs result in the improvement of the work force, the better and more suitable workers are kept.

"Voluntary retirement" is altogether different. Management announces a quota will "resign voluntarily," and whoever wants to signs up. Some are interested in early retirement, and some take advantage of the opportunity to get good severance deals and find another job, sometimes with a competitor. Consequently it is not always the less competent workers who leave, and therefore voluntary retirement doesn't necessarily improve the company's human resources. Sometimes the opposite is true.

However, in the government sector, and in the Education Ministry in particular, these distinctions barely exist. In most cases when the ministry talks about `layoffs' (in ministry lingo `management lists') the list does not reflect what management really wants, but more often what the employee and his union representative want. That is, `layoffs' are usually `voluntary retirement' in this context, and the process does not improve the quality of the teaching staff. Yesterday the Education Ministry and the Treasury drew up a draft of an agreement, which they passed on to the teachers' unions. The draft talks about principles; some who will be fired, some who will retire voluntarily, some who will receive compensation, and some who will receive pensions. But the condition for all of this is that the teachers sign an agreement accepting the principles of the Dovrat report, and begin implementation.

However, as expected, the teacher unions refused to sign.

The condition for reaching an agreement is either mutual interest, or a dangling sword overhead. Here neither one or the other condition existed. There is no common interest between the teachers' unions, the Education Ministry and the Treasury. And there is also no dangling sword. Therefore unless the government comes back with a threat to legislate the reforms, there is no chance that the teachers will agree to implement the Dovrat report. Which is to say that the crisis will be continue, and the education system will be stuck with its ailing ways.