Israeli Labor Court to Rule on General Strike That Shut Exchange
February 10, 2012, 5:18 AM ESTBy Calev Ben-David and Gwen Ackerman
Feb. 9 (Bloomberg) -- Israel’s National Labor Court met to rule on whether to allow the country’s largest labor federation to shut banks, ports and the stock exchange for a second day to protest contract workers’ conditions.
The Finance Ministry and Histadrut labor union were scheduled to report at 1 a.m. to the court on the progress of talks to settle the protest, the ministry said in an e-mailed statement yesterday from Jerusalem. The court was then to decide if the strike can continue and, if so, under what conditions.
Histadrut estimates that 250,000 Israelis employed through contractors receive on average about 30 percent less pay than comparable workers employed directly. It says it wants the government to take stronger measures to have them hired directly so they receive higher wages and benefits.
Ben-Gurion International Airport was shut for the first six hours of the strike, which involves 500,000 workers and started yesterday. The Tel Aviv Stock Exchange and the Bank of Israel were also closed.
“It is difficult to quantify the damage to the economy, which I think is biggest for importers, exporters and tourism,” Jonathan Katz, a Jerusalem-based economist at HSBC Holdings Plc, said by telephone. “If it is just a strike for one day, it’s not that detrimental to Israel’s image. If it will be a prolonged strike, it will have investors worried.”
Stocks Slip
The Bloomberg Israel-US 25 Index of Israeli stocks traded in New York dropped at one stage yesterday to the lowest in a week, on concern the strike’s continued shutdown of the Tel Aviv Stock Exchange will prevent arbitrage trading.
Histadrut said yesterday it reached an accord with private- industry groups to ensure that contract workers will get equivalent conditions to salaried employees. An end to the strike will depend on the government accepting those terms, it said.
“Private employers have agreed to equalize the conditions of contract workers and absorb them into their workforce, and the government, which is a public employer and has double the responsibility toward these workers, is not willing to do so,” Histadrut chief Ofer Eini said in an e-mailed statement.
“A strike will not solve the problem of contract workers,” Prime Minister Benjamin Netanyahu said on Feb. 7. “The Israeli economy is in a delicate situation and now is not the time to risk the stability that we have achieved at great effort and through cooperation between the government and the Histadrut in the face of the collapse of some of the world’s leading economies.”
The Finance Ministry cut its growth forecast for 2012 to 3.2 percent from 4 percent, Finance Minister Yuval Steinitz said on Jan. 18. The Bank of Israel lowered its prediction on Dec. 26 to 2.8 percent from September’s estimate of 3.2 percent.
--With assistance from Tal Barak Harif in New York and Shoshanna Solomon in Tel Aviv. Editors: Eddie Buckle, Andrew Langley
To contact the reporters on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net; Gwen Ackerman in Jerusalem at gackerman@bloomberg.net.
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
