Unions Threaten Strikes if Kept Out of Budget Talks

But Netanyahu vows to press ahead with economic reforms.

Stepping up his battle against budget cuts that will hit public sector workers, Histadrut labor federation chairman Ofer Eini warned on Wednesday of a wave of strikes and labor slowdowns if Finance Minister Yair Lapid doesn't include the union in talks over the 2013-14 spending package.

"We will use all the means at our disposal to protect the rights of workers and prevent harm to the working public and retirees," Eini declared in a letter to Lapid and Prime Minister Benjamin Netanyahu.

In reply, Netanyahu said "no strike will disturb" plans to move ahead with wide-ranging reforms, pointing to the cabinet's approval of Open Skies in the aviation market this week, and saying a plan to reduce car prices would be brought to the ministers, followed by reforms for the ports.

"We intend to press ahead with a series of reforms to increase competition," Netanyahu said at a Knesset ceremony to mark Theodor Herzl's birthday.

Eini said he was appealing to Netanyahu and Lapid now because the government plans to present the budget proposal to the cabinet at the start of next month, which gives the Histadrut little time to influence it.

As presented earlier this week by Lapid to Netanyahu and Bank of Israel Governor Stanley Fischer, the budget, expected to take effect at the end of July and run to the end of 2014, calls for a freeze on public sector wage increases, hiring and promotions, which the government says would save up to NIS 5 billion.

Workers and pensioners "are already groaning under a heavy burden and represent the middle class and the lower class," Eini wrote.

His threat after unions staged a brief strike Sunday and Monday to try and block Open Skies, but gave in after the government agreed to raise subsidies it pays El Al to cover its security costs. But Eini said the incident left him with a sour taste regarding the finance minister.

"Lapid, your attempts at short-term populism have undermined my confidence in you," Eini wrote.

He maintained that the treasury's plans would weaken organized labor and increase the burden on those who work, in contrast to Lapid's promises to help the working middle class. Eini said Lapid's plans are being formulated right now "without conducting any negotiations with the Histadrut."

In fact, the government is due to begin talks with the labor federation next month on one of the most contentious reforms being undertaken in the public sector - the plan to create privately owned and operated ports in Haifa and Ashdod alongside those operated by state-owned port companies, which are Histadrut strongholds.

Transportation Minster Yisrael Katz met with Netanyahu on the planned reform this week and received a green light to form a joint committee with Lapid on the framework of talks with the Histadrut.

They face strong opposition from the unions, which are likely to exploit the end of an industrial-quiet agreement in the middle of next month to strike.

Eini said the 2011 agreement on improvements in conditions for employees working under personal contracts, as opposed to collective labor agreements, has still not been implemented completely despite repeated warnings by the Histadrut. He said he feared this was a conscious policy of foot-dragging in an attempt to abandon the rights of weaker workers.

At any rate, the government must immediately start negotiating with the Histadrut over a new collective wage agreement for public sector employees, as the present agreement, signed in October 2010, expires this summer.

Eini did not make any reference to a 1% pay raise that civil servants are due in July that will add NIS 900 million to the government's costs, but observers said Eini might be prepared to delay the hike until 2015.

Avi Bar-Eli contributed to this report.

Moti Milrod