Treasury Agrees to Underwrite Paid Leave to Stave Off Firings

Employers will have to continue covering social benefits, under accord reached between state, union and employers.

The state, the country's main trade union and major employers reached an agreement yesterday under which the Finance Ministry will directly underwrite leaves of absence for workers as an alternative to widespread dismissals.

The treasury is to allocate NIS 150 million to the project, which is aimed at preserving employment in the country's industrial, planning services and systems programming sectors.

It will be implemented in facilities located in National Priority Area A (the Negev and the Northern Galilee), with special precedence given to those located in peripheral areas and whose management undertakes to provide professional training during the leave period. Companies with 25 or more employees are eligible.

The idea is for the company to place the participating employees on three months' unpaid leave (officially) instead of dismissing them. The workers will receive the same amount they would otherwise receive as unemployment benefits from the National Insurance Institute, which will be funded - up to NIS 150 million total - by the Finance Ministry.

Employers must continue to pay their share of social benefits while employees are required to use up any vacation days coming to them before the leave arrangement kicks in.

Employers can place up to 25% of their workers - but not more than 100 - on leave at a time, in four three-month shifts during the year. Each worker can go out on leave only once during the year, and for a period of no less than one month and no more than three.

In addition, employers who opt to join the project are obligated to retain at least 75% of the workforce they had in the quarter preceding their application for the program for at least one year from the end of the program.

Meanwhile, the list of companies laying off staff or shortening the working week was joined yesterday by Intel Israel and Nortel Israel. And tomorrow will bring a fateful meeting of creditors owed money by Vita Pri Hagalil, the food-processing company in northern Israel struggling to survive. If they can't agree on an arrangement, hundreds more will join the list of the jobless.