Israeli District Court Will Get a Chance This Month to Set Labor Law Right

Ido Baum
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Ido Baum

The labor courts have long been a thorn in the Finance Ministry's side. A few months ago the treasury suggested abolishing the courts, a terrible idea but one that could come up again soon nonetheless.

At least five recent labor-court decisions have blocked government actions while strengthening the unions – which already hold enormous monopoly power by controlling key aspects of the country's infrastructure. The treasury has a problem, and the antitrust trust authorities could solve part of it.

The state is particularly incensed by the Haifa labor court's decision letting the Israel Electric Corporation's union prevent privately-owned Dorad Energy from operating until it negotiates structural reforms with the union. Antitrust commissioner David Gilo, worried that workers will also hamper construction of a Dalia Power Energies plant, asked the antitrust authorities to make the workers let work carry on. As of now, construction work at Dalia relies on generators, as the IEC isn't doing anything to connect the compound to the grid.

At an antitrust-tribunal hearing presided over by District Court Judge Nava Ben-Or, the workers' lawyer said the sanctions were designed to hurt the state, not the public. "They're striking because there are no negotiations over structural changes at the electric company," attorney Niv Zecler said.

"They want to conduct negotiations; otherwise there will be a measured strike that will hurt the state. Who needs to negotiate with the workers? The Finance Ministry. Is a general strike preferable? It's logical to take sanctions that hurt not the public or industry, but the side that needs to sit and negotiate."

This obviously is a spurious claim, since a strike that delays competition in the economy hurts the electricity-consuming public. But the sanctions by IEC workers are shrewd. They aren't felt by the public so they don't stir criticism against the workers.

The workers have won the labor court's backing. The decision to allow sanctions joins court decisions that have made the state negotiate under pressure despite existing agreements or arbitration rulings. In effect, the courts are helping the unions reinforce the monopolies held by Ashdod Port and the IEC.

From the outset, the courts were designed to back weak workers against strong employers. In recent years they have protected the right to organize and the right to strike. Their rulings have strengthened the organizing trend among workers from Pelephone and newspapers to the Burger Ranch chain.

A verdict between two worlds

But these companies operate in competitive industries, and if workers hadn't organized their rights would have eroded. In contrast, unions with their finger on the national switch don’t need the same protection, but labor courts are apparently blind to economic realities.

Electric-company workers control their managers, not the other way around. This can be seen from an admission in Ben-Or's courtroom. Attorney Yehoshua Horesh, representing the IEC, admitted that if the judge ordered the company to connect the Dalia compound to the grid, the order would be tough to carry out.

"Any order given, if given at the request of the [antitrust] commissioner, is hypothetical from our perspective," he said. "We'd have a problem carrying it out as long as the workers didn't cooperate with us."

Gilo put Ben-Or in a delicate situation. The order he asked for a week and a half ago requires a verdict between two worlds: labor law and workers' rights on one hand, competition on the other.

Ben-Or realized that if she ruled that the IEC must connect the Dalia compound to the grid, her order could clash with the court's permit for sanctions. She preferred not to decide and proposed that Gilo ask the attorney general to come up with a position.

What should prevail: the monopoly workers' right to strike or market competition? This dilemma has never been so clearly laid down before Israel's courts.

There is certainly tension between competition and workers' right to organize. For instance, collective agreements between the Histadrut and any industry subject all employers in that sector to the same labor conditions and thereby constitute a restriction on competition.

Despite this, it is accepted throughout the world that workers are entitled to organize, clash with their employers, demonstrate, take sanctions and strike as long as they don't use their power to form a monopoly. Precedents show that workers may take action to protect their rights but may not exploit their power to eliminate competition.

This issue is supposed to come up before Ben-Or again in the coming days; it will be an excellent chance to improve the situation created by the labor courts.

Ben-Or is authorized to force the IEC to allow construction of the private power plants. How her decisions affect labor relations between the IEC and its workers is none of her business.

In effect, Ben-Or's verdict could subordinate the rights of the IEC's workers to take sanctions to the principle of promoting competition – and that's a logical outcome. There are other ways to take sanctions, and they don't have to be ones that stifle competition.

Dorad’s Ashkelon power station.Credit: Rachel Levy

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