Israel Newspaper Maariv to Lay Off Most of Its 2,000 Staff This Month

September wages and severance pay both in doubt.

Maariv told its more than 2,000 staff on Monday that most of them will be fired by October and that the paper does not have the money to cover the severance pay they have coming if the paper closes, employees said.

They said it was not clear whether they would receive their September salaries either.

In talks to sell Maariv to the publisher of the Makor Rishon newspaper, Shlomo Ben-Zvi, the sides agreed that the new owners will rehire 300 to 400 employees after being fired and losing all their rights due from the present owners. Maariv said that in such a case, workers would receive their September salaries out of the money paid for the acquisition by the new owners.

Ben-Zvi, meanwhile, is having second thoughts about Maariv's NIS 85 million price tag. Ben-Zvi associates say the paper's financial situation is worse than reported, and expected future revenues are lower than those forecast by the present owners.

As a result, Ben-Zvi is demanding a significantly lower price, and the two sides and their lawyers held a meeting on the matter yesterday.

Maariv is demanding that the money from the sale go to the paper and not its present controlling owner, Discount Investment Corp.; this might allow the paper to pay September salaries.

"We discovered that over the years not all the severance payments were set aside for Maariv employees," the paper's union wrote to employees.

"At this time, it is not clear to us how deep the hole is, and we are acting with Histadrut [labor federation] representatives to appoint a representative on our behalf to examine the books. It is clear this failure will not pass in silence, and we seriously intend to fight for our rights."

Workers will be owed around NIS 90 million if the paper folds. This amount appears in the filing drawn up by Maariv's lawyers in preparation for a court petition for creditor protection - but which was never filed.

The request for court protection was put on hold after Discount Investment's board approved an additional NIS 15 million in guarantees a week and a half ago, which let Maariv receive another bank loan and continue operations.

Based on the petition, employees were Maariv's largest creditors, followed by Discount Investment at NIS 60 million, bondholders at NIS 55 million and banks at NIS 45 million.

Histadrut officials met with Maariv employees yesterday. An officially declared work dispute exists at Maariv, and the Histadrut says it will do whatever necessary to protect workers' rights.

Histadrut chief Ofer Eini said he will meet soon with Maariv employees to examine all options available. Both the sellers and buyers will have to sit down with the Histadrut and union to discuss employee rights, including a new collective bargaining agreement, said Histadrut officials.

At the end of 2011, Maariv employed 2,010 people, including 850 permanent salaried workers. The rest were hourly workers.

Maariv's printing plant employs 177. Many of the workers are expected to remain with Maariv after the sale, at least until Discount Investment arranges the sale of the printing plant and its land - which is not included in the deal with Ben-Zvi.

Discount Investment is publishing a separate tender for the printing plant and land, and hopes to use the funds to pay off some of Maariv's debts. The printing plant is expected to go for about NIS 80 million.

Already two years ago, Maariv workers said the paper was not transferring its pension deductions to the appropriate funds.

Instead, Maariv was deducting the amounts from workers' salaries, but not paying into the pension savings plans as required by law - and even though their salary slips stated that the money had been transferred.

Discount Investment declined to comment for this report.

Striking Maariv workers last week opposite Discount Investment Corporation headquarters.
Hadar Cohen