Israel Electric Says Won’t Raise Pay This Year

CEO cites the company’s poor financial condition, while the workers cite 'populism' against their hefty salaries.

Avi Bar-Eli
Avi Bar-Eli
Avi Bar-Eli
Avi Bar-Eli

Eli Glickman, the CEO of state-owned Israel Electric Corporation, told employees Thursday the pay raise that’s due this year won’t happen because of the utility’s “serious financial condition.”

Under their collective labor agreement, about half of the IEC’s employees are entitled to a pay hike of between 6% and 7% every two years, granted as an automatic increase in their pay grade. A training grant that employees are entitled to would also not be awarded, Glickman added.

David Tzarfati, chairman of the IEC workers’ committee, called Glickman’s move “cheap populism.” “At a time when we are experiencing unusual weather and Qassam rockets are falling in the south, we are working to ensure an orderly supply of power to everyone in Israel,” he said in a letter to staff.

In the next few days workers will take “surprise measures” against management, Tzarfati warned.

“Employees of the company are being exposed to libel in the media. We had expected management … to react by defending its dedicated employees as other companies do,” Tzarfati said. “Unfortunately, the IEC’s management has opted for cheap populism instead of attacking the people who have brought the company to its current critical condition.”

Analysts said Glickman’s move was aimed at fending off criticism from the public; the IEC is seeking some 1 billion shekels ($289 million) in government aid as it refuses to roll back wages that are above what is permitted to government-owned companies.

Nevertheless, analysts were surprised that Glickman opted to violate a labor agreement instead of dealing with the exorbitant salaries or other issues where he would be on stronger legal footing.

Glickman may have taken the step knowing that labor unions would turn to the National Labor Court to get it reversed. That would move the frozen talks on reform of the electric-power sector to the courts, a forum that both IEC management and its unions would prefer over direct talks with the treasury.

The talks on reform have been deadlocked over the government’s demand that high salaries be rolled back, a move that prompted union leaders to walk out of the negotiations.

An IEC control center. Credit: Tomer Neuberg

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