After hours of high-level talks, Finance Minister Moshe Kahlon and Histadrut Labor Federation chief Avi Nissenkorn agreed overnight Tuesday-Wednesday to increase the salaries of public sector workers, removing the threat of a general strike which had been scheduled to begin early Wednesday morning.
During a meeting at the Finance Ministry in Jerusalem, the Histadrut leader agreed to call off the strike, which had been expected to shutter or seriously hamper operations in the nation’s schools, municipalities and airports, among other institutions.
According to the agreement, public sector workers will receive a 7.5% salary increase over five years, backdated to begin retroactively from 2013, Channel 2 reported. Low-wage workers, however, will receive a salary increase higher than 7.5%. The Histadrut had previously demanded an 11% salary increase, while the Finance Ministry sought to keep the increase at a lower 3%-7%.
The salary increments will be distributed differentially, with 50% of the increase paid in cash, and the other 50% in a percentage raise, a statement issued by the Finance Ministry and the Histadrut said. In addition, employees will receive a bonus of NIS 1,000 ($256) in January 2016, and another bonus of NIS 1,000 in January 2017.
Kahlon and Nissenkorn will hold another meeting in 10 days to flesh out any remaining details that may have not been addressed in the last-minute agreement.
“The higher-wage employees showed social solidarity as they explicitly stated they are willing to give up their share for the benefit of low-wage earners,” Kahlon said following the agreement. “This agreement is no less than historic.”
The last wage agreement, sealed in November 2010, provided for a 6.25% increase over three and a half years, plus a one-off sum of NIS 2,000 ($512) for each worker.
Ahead of the talks and subsequent agreement, Israeli airlines El Al and Arkia changed their flight line-ups for Wednesday, scheduling more than 20 flights to take off before 6 a.m. All passengers with flights scheduled for Wednesday were asked by the companies to arrive at the airport at least three hours before the new departure times. The schedule updates remained in effect despite the strike’s cancellation.
Kahlon warned Monday that a general strike would cost Israel’s economy NIS 600 million ($154 million) per day.