Two months after a labor court ordered an end to the payment of excessive wages at the government-owned Israel Electric Corporation and after the Finance Ministry demanded that IEC employees collectively return 650 million shekels ($169 million) in salaries beyond what the law allowed, the ministry is forgoing efforts to collect the entire wage increases that were paid to the employees over the years beyond what was permissible.
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Following recent closed-door meetings between representatives of the Histadrut labor federation, the IEC workers’ committee, IEC management and the Finance Ministry’s wage division, the parties agreed on Wednesday that the IEC will only cut 60% to 70% of the portion of employees’ future pay that exceeds what is legally allowed, TheMarker has learned.
The Finance Ministry has also agreed to forgive most of the overpayment of wages that workers have received since 2000. As a result, present and former employees will be required to return an estimated 250 million to 300 million shekels of the 650 million shekels that the ministry’s former wage director, Kobi Amsalem, had ordered returned.
In exchange, the workers’ committee has agreed in part to withdraw the strike threat it had posed over the issue, and the government has agreed to withdraw the appeal it filed over the labor court’s decision.
The appeal had been filed in an attempt to increase the amount of the repayments from IEC staff.