Dispute Over Employee Bonuses Shuts Tel Aviv Stock Exchange

Union calls labor action to delay opening, blames management for full-day shutdown

Shelly Appelberg
Shelly Appelberg
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The Tel Aviv Stock Exchange building.
The Tel Aviv Stock Exchange building.Credit: Eyal Toueg

Trading on the Tel Aviv Stock Exchange was suspended Sunday and for a brief time the bourse’s website went down as well as workers protested the breakdown of talks over an annual bonus payment dating back to 2017. The move drew an angry reaction from the Israel Securities Authority.

The labor action was taken after TASE CEO Ittai Ben-Zeev withdrew from an agreement to arbitrate a dispute with the Histadrut labor federation and the bourse’s workers committee over worker demands for a bonus for 2017.

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“In the midst of an economic crisis, the CEO, Ittai Ben-Zeev, received a 678,000 shekel [$195,000] bonus at the same time that he is administering a policy that undermines the right of workers to enjoy the fruits of their labor,” said Larry Schuffman, chairman of the TASE workers committee.

“The generous patience the Histadrut has shown in avoiding any organized action in all of the labor disputes declared since September 2018 and the responsibility and restraint shown by the workers committee has been interpreted by the CEO wrongly as empty words,” he said.

TASE CEO Ittai Ben-Zeev.
TASE CEO Ittai Ben-Zeev.Credit: Nir Keidar

The Histadrut acted on Sunday based on a formal labor dispute, which after a two-week cooling-off period entitles them to strike, in May 2019. It wasn’t clear whether the TASE website went down because of sabotage or a technical problem.

The workers committee planned to delay trading, instructing workers to arrive only at 11 A.M. and then attend meetings with union leaders. It blamed Ben-Zeev for deciding to suspend trading for the full day, which on Sundays ends at 3:30 P.M. local time. Sources at the workers committee said it would have been possible to start trading within an hour after employees had returned to their posts.

In response, TASE management said workers had been offered a 15 million shekel bonus for 2017 but were demanding more even though the average cost of salary, including wages and other benefits, is about 50,000 shekels a month, more than four times the national average.

Employees were also given a 6% stake in the TASE when it became a publicly traded company last year, management noted. The labor action comes as shares in the TASE have more than doubled since the end of March to close at 15.55 shekels Thursday, just short of their record high.

“The workers committee declared a labor dispute as part of its fight against management’s decision to issue shares in the bourse and it should be noted that the value of the shares held by workers has since grown from 27 million shekels to 100 million shekels. In addition, no employees were put on unpaid leave during the coronavirus crisis,” management said in a statement.

“We wonder, it is right for the Histadrut to be funding and supporting a baseless fight like this at the expense of the Israeli working public now coping with coronavirus layoffs?” the TASE asked.

Those sentiments were echoed by Anat Guetta, the head of the Israel Securities Authority. “I take very seriously the matter of delaying the opening of trading due to an internal dispute. At a time when we are investing resources and making a great national effort to develop an innovative and attractive capital market, anything that harms normal trading activity can hurt investors and the market itself, a citation I don’t find reasonable,” she said.

“The bourse is part of the nation’s infrastructure and shouldn’t be shut down so easily,” she said.