Ofer Eini, Yuval Steinitz Nov. 1, 2010 (Daniel Bar-On)
Histadrut chief Ofer Eini, left, and Finance Minister Yuval Steinitz. Photo by Daniel Bar-On
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Negotiations continued late into Monday night in an effort to avert a planned general strike by the Histadrut labor federation on Tuesday.

Histadrut and Finance Ministry officials spent most of yesterday in intensive talks on a new collective agreement for Israel's 750,000 public-sector workers. But the relaxed atmosphere at the talks, which took place at Finance Minister Yuval Steinitz's office in Jerusalem, gave rise to hopes that a deal would be signed in time to avert the strike.

As of Monday night, the gaps between the two sides still looked large. The Histadrut was still demanding a public-sector raise of 3.5 percent a year, for a total of 10.5 percent over the three-year period in question, 2009 to 2011. And the treasury was still insisting it would grant raises of no more than 0.5 percent a year, or 1.5 percent in total.

Yet Steinitz and Histadrut Chairman Ofer Eini lavished praise on each other, which is not standard practice if a major strike is about to erupt. Eini lauded the finance minister's sense of responsibility for the economy, while Steinitz extolled the labor leader's sense of responsibility for his workers.

Also contributing to the feeling that a deal was likely was a U-turn by Uriel Lynn, president of the Federation of Israeli Chambers of Commerce. Lynn had planned to petition the National Labor Court first thing this morning for an injunction against the strike. But under pressure from both senior Histadrut officials and associates of Manufacturers Association President Shraga Brosh, he agreed to hold off. The Histadrut argued that by agreeing to wait, Lynn would contribute to the positive atmosphere prevailing in the talks.

Other developments of the past two days also indicate that the sides are heading for a deal rather than a strike. On Monday, the Teachers Union, in coordination with Eini, backtracked from its original intention of calling a solidarity strike should the Histadrut action take place. And Monday night, the Histadrut exempted employees of the Egged and Dan bus cooperatives from the planned strike, ensuring that there would be no disruption of bus service.

One barrier to an agreement has been the treasury's demand that a deal include clauses giving public-sector employers greater flexibility to fire workers, move them to different jobs within an organization and pay bonuses to especially productive employees.

But based on experience, these provisions would likely remain dead letters even if the Histadrut agreed to them. Certainly, all previous efforts to introduce more management flexibility into the public sector have failed.

Two and a half years ago, for instance, the Histadrut and the treasury set up a joint committee to devise ways to increase the public sector's managerial flexibility, but the panel eventually stopped meeting because it became clear that the Histadrut had no real interest in advancing the matter.

The Histadrut also continues to oppose another treasury demand: that instead of all workers getting the same percentage increase, they all get the same number of extra shekels in their paychecks, which would translate into a higher percentage increase for lower-paid workers. The labor federation argues that a fixed-shekel raise would be more vulnerable to inflation than a percentage-based one.

If the raises are specified as percentages rather than fixed-shekel amounts, the Histadrut probably would agree to give lower-paid workers bigger raises than higher-paid ones. But it wants each of its member unions to be able to decide for itself how to divvy the raises up among its members.

If, despite all the optimism, a strike does begin on Tuesday, it will shut down government agencies such as the ministries, the National Insurance Institute, the Government Employment Service, the local authorities, the ports, Ben-Gurion International Airport, the railroad, government companies, clinics run by the Clalit health maintenance organization, day-care centers run by Na'amat, university administrations, the licensing bureau and the Israel Lands Administration.

In addition, hospitals will be on a Shabbat schedule, meaning emergency care only. Thus nonurgent operations will be postponed, and there are likely to be long waits at outpatient clinics. Moreover, hospital nurses and administrative workers will not be working at all, so patient care will be left entirely to the doctors.

Nonetheless, there were people on Monday urging the treasury to stand fast. Shmuel Rifman, who heads an umbrella organization of regional councils, warned that acceding to the Histadrut's demands would burden the local authorities with additional expenses of around NIS 100 million a year - which very few towns could afford.

 Jack Khoury and Dan Even contributed to this report.