Bill Bans Strikes at Vital Israeli Government Monopolies

No more shutting off the electricity: If a monopoly provides a vital service, all its workers can do to buck reform is hire an arbitrator.

Meirav Arlosoroff
Meirav Arlosoroff
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Employees of Israeli government monopolies that provide vital services will not be able to take any work action in response to reforms introduced into their workplaces – to increase competition, for example – under a bill being formulated by the Prime Minister’s Office.

Instead, if negotiations with the government do not bear fruit, the parties would be obligated to submit the dispute to arbitration.

The latest draft of the bill designates health, foreign affairs and major infrastructure companies (including the ports, the Israel Electric Corp., Israel Railways and airlines) as vital services whose workers cannot strike under these circumstances. At present, the educational system is not included in the list.

The Prime Minister’s Office and the ministries of finance, justice and the economy are working feverishly to promote the bill, which is aimed at reducing the many strikes and work sanctions at government monopolies in recent years. The aim is to restrict the right to strike in order uphold the public’s right to control its assets – assets owned by the government.

The bill explicitly states that reforms are a matter for the government alone to decide, and that the arbitrators will only have a right to weigh the implications of the reform on the workers’ rights. The workers will not be able to strike or file legal claims simply because they object to the reform.

The bill also prohibits solidarity strikes. This provision would bar the employees of government monopolies in essential services from striking in order to advance the labor demands of a different sector in the economy. Solidarity strikes are considered one of the strongest weapons against the government currently available to the Histadrut labor federation.

According to a senior official in one of the ministries involved, exposure to economic competition should in theory threaten the owners, while its relation to employees is only indirect. “But a reverse situation has been created where the employees act as owners, fighting against the reforms.”

This role reversal, he said, means that workers are using their right to strike in an unreasonable fashion, to prevent structural changes and competition, and hamper the ability of government and the public to control its own assets and make necessary structural reforms.

The bill discusses the institution that will conduct the arbitration procedures. This body will be given authority similar to that of a labor court, and will be headed by a judge and include public representatives. This institution will enjoy independence similar to that of the courts, so it will not be biased toward the government or the workers.

The parties that submit to arbitration will have to give up of some of their rights – the right to strike and the right to conduct negotiations. The state would also be yielding some of its powers, because it would be transferring to an external body its authority to decide on wage policies for those employed in these vital services. The bill also discusses the amount of time negotiations can continue before the dispute is submitted to arbitration.

No 'Italian strikes'
In addition, the bill refers to work sanctions, slowdown or work-to-rule – unofficial "Italian strikes." Such sanctions have become an irritant in the public service, but because they are not declared, and no one officially admits to them, it is difficult to take action against the unions. It is still not clear how the question or sanctions will be resolved by this bill.

Finally, the bill discusses sanctions in the event of a refusal to submit to compulsory arbitration. Among the sanctions being considered are financial penalties, employee dismissal without compensation, the use of alternative employees (strikebreakers, or "scabs") and the withholding of wages. There is still no consensus among the officials drafting the bill over which sanctions to include.

As for the right to appeal the arbitrator's ruling, the officials are leaning toward making all arbitration binding on both labor and management.

“The monopoly premium of the government monopolies has moved from the owners to the workers,” said the senior ministry official. “The high salaries and good work conditions in these companies stem from the excess profit of the monopoly, which in a private company goes into the pockets of the owners but here goes into the pockets of the workers, who also act like the owners because in fact they control the companies. That’s why we see the workers fighting for struggling for a clear interest of ownership - against the structural reforms that could expose the company to competition.”

The push for the new law is presumably a response to the battle by Israel Electric Corp. workers against the connection of private generating stations to the state's electricity grid; to strike threats by seaport workers over the plan to build a privately owned port and to threats by El Al employees over the implementation of the Open Skies agreement with the European Union. The Histadrut has used the threat of solidarity strikes to support the demands of airline employees.

“Now that there is a union at [Israeli cellphone provider] Cellcom, does that mean the government will no longer be able to reduce connection fees, because the union objects and the Histadrut shuts down the economy in support?," a government source ventured to ask, adding, "This constitutes an extreme loss of governance.”

Ashdod PortCredit: Limor Edrey