Israel Electric Corporation Staffers Party Hard as Company Scrounges for Cash

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

Israel Electric Corporation is in the middle of a labor crisis that has created a cash crunch and forced it to turn to the banks for an emergency credit line. Protesting government reforms of the power sectors, employees of the state-owned utility have been holding back payments to suppliers, and in other cases not collecting bills.

But like the frat boys in “Animal House” who called their infamous toga party just when things couldn’t get any worse, IEC workers haven’t let the crisis deprive them of a good time.

Sunday evening hundreds of staff, accompanied by spouses, were partying hard at the Mini-Israel Park in Latrun for an annual event hosted by IEC’s Jerusalem region workers committee.

Sources estimated that as many as 1,500 IEC staff and family enjoyed a catered meal and performances by singers Shlomi Shabat and Miri Mesika and comedian Zvika Hadar at a cost of hundreds of thousands of dollars. On the way out, the guests each received a present that cost hundreds of shekels.

The event was sponsored by the union, but it’s partly paid for by the company under a clause in the workers’ collective labor agreement called “solidarity days.”

The guest of honor was IEC Chairman Yiftah Ron-Tal, who over the weekend appealed to the government for emergency aid because the corporation’s collections unit was engaged in a slowdown at the orders of the workers committee.

“As long as no solutions are found for the slowdown, the company will find itself within a month in a situation where it has no money to pay suppliers or salaries,” Ron-Tal wrote in a letter to Finance Minister Moshe Kahlon.

In his speech at Sunday’s party, Ron-Tal didn’t mention the slowdown.

IEC offered no apologies for the partying.

“Employees work hard and risk their lives 365 days a year so they should be able to be able to join in solidarity activities as every other organization does,” a spokesman said, adding that the IEC contributed just 100 shekels ($28) per employee for events like these – a sum matched by the workers committee.

As to why Ron-Tal was attending an event with employees who are undermining the financial health of the company, the spokesman said, “The chairman, like the rest of management, respects and appreciates the company’s employees. Any attempt to link that with the workers’ fight is wrong. There’s no connection between the labor action, which according to the courts is legal, and the solidarity day.”

Two weeks ago, the Haifa Labor Court ruled that as part of the slowdown, IEC workers legally deduct 10% of all payments the company owes some 9,400 suppliers. This month alone the company is supposed to pay out 1.3 billion shekels to suppliers, of whom 80 – who are owed 560 million shekels – are deemed “critical” for ensuring the uninterrupted supply of electricity.

The court’s decision has enraged the business sector because, among other reasons, the judges gave their approval for violating the sanctity of contracts.

On Monday, the court was taken by surprise when Orna Lin, an attorney for the workers committee, submitted a request that the judges remove any restrictions on the labor action and allow the IEC workers to stop supplier payments altogether.

The court will consider the petition next Sunday.