Labor Court Bars State From Pushing Through Israel Electric Reforms

Was it all a trick by management to con the judiciary into helping the utility?

Avi Bar-Eli
Avi Bar-Eli
Israel Electric Corp.’s Hadera power station.
Israel Electric Corp.’s Hadera power station.Credit: Tal Cohen
Avi Bar-Eli
Avi Bar-Eli

Three weeks after precipitating a crisis with its own workers, late last week the Israel Electric Corporation obtained an order from the Haifa Regional Labor Court barring the state from carrying out any changes that would be to the detriment of the state-owned utility.

The order was issued even though the court’s involvement was initially sought not over the reform plan itself, but rather in response to labor sanctions, called after CEO Eli Glicksman announced he was canceling a pay raise for half of the company’s workers.

Some observers claim Glicksman deliberately precipitated the labor crisis in order to involve the district labor court, which is seen as sympathetic to the IEC.

Negotiations over proposed reforms stalled after workers rejected the state’s demand for an end to the utility’s too-high salaries. The dispute over wages was not sufficient cause for permitted labor sanctions, but Glicksman’s order canceling the pay raise was.

The sanctions included the suspension of customer billing, debt collection and shut-offs for nonpayment. In response, IEC management turned to the labor court which, as expected, focused more on the proposed reforms and less on the elimination of the pay raise. The court did, however, ordered the utility to begin paying the raise, starting from the next paycheck, and ordered the workers to stop their sanctions.

The panel of judges, headed by court president Judge Rami Cohen, also called on the parties to undertake “intensive, good faith, fair discussions” on the proposed reforms. It also ordered the state to refrain from taking any steps that would change the current state of the electricity market or that could affect the IEC’s authority.

For the past five months, the Haifa Regional Labor Court has delayed the implementation of a Finance Ministry order that would halt exceptional salaries at the utility. These salaries alone are estimated at 150 million shekels ($43.1 million) a year.

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