Jewish
Frontier

The National Committee for Labor Israel works to build support for and educate the public about the achievements of Israel, especially its labor sector. It is committed to strengthening ties among the Jewish community, the labor movement and Israel, and to help Israel fashion a society based on peace, social and economic justice, and equality of all of its citizens.

THE MIDDLE EAST:
VIOLENCE AND ECONOMIC CHANGE

In the last few years, Israel has undergone tremendous economic changes. It is still in the process of a radical transformation from a planned, centralized economy to a free-market economy. The policies of all governments in the same period, whether right or left, were designed to divest the state from direct involvement in the economy and to privatize an array of state-owned companies. At the same time a process of "rationalization" of industrial units was put in place, whereby units of production were to become separate entities responsible for their own profits and losses. As an unforeseen consequence, however, this led to the loss of secure jobs. In a twist of fate it also led to an increased reliance on outsourcing and an expanded reliance on manpower companies providing temporary employment.

At virtually the same time Israel began to suffer a major recession. In the food sector alone a steep decline developed in production, reflecting the loss in purchase power of many families. As a result factories were forced to close or were consolidated, and within a short period of time over 4,000 workers became unemployed.

To complicate matters, the Histadrut, the General Federation of Labor in Israel, went through a traumatic change process of its own. Once viewed as a general social and economic movement involved in all facets of life, a role it played before Israels proclamation of statehood, it began to concentrate on its central task as a federation of 21 separate trade unions, with 30 regional branches scattered throughout the country.

The most serious of the changes took place in 1994, when the decades long link between Histadrut and the major, nationwide health service, Kupat Holim Clalit, was severed by law. This led to a dramatic decline in membership, from 1.6 million to approximately 700,000. Many Histadrut members, such as retirees, could now opt to enroll in Kupat Holim directly, without paying dues to the labor federation.

An eroding political and security situation complicated matters. Beginning in September severe economic crisis slowly unfolded in the the launching by Palestinians of what was described as the "AI-Aqsa Indfada." Within armed violence mounted, marked by Arab murders and Israeli military responses.

Today, Israel is suffering from a severe recession, with unemployment hovering at approximately 230,000, or 10% of the work force. Some sectors were especially hard hit by recent developments, with tourism a major victim.

Rated as one of Israel's major industries, tourism provided work to thousands of Israelis and Palestinians. The nationwide network of hotels alone reportedly employed more than 36,000 people.

The widely broadcast acts of violence caused by Palestinian murder bombers led to a precipitous decline of about 75% in the number of tourists arriving in Israel. This led to a loss of $2.6 billion in revenue, a major factor in the rapid decline of Israel's Gross Domestic Product (GDP) from $9.2 billion to $6.4. The evaporation of about $2.8 billion is attributable to the tourist industry and is more than a two percent decline in overall economic growth.

Many hotels throughout the country were forced to close and 16,000 workers were fired immediately. The remaining workers had their salaries cut by 20% to 50%.

The Histadrut, together with the Hotel and Restaurant Workers Union, quickly agreed on short-term measures, and persuaded the government to help alleviate the situation. Among other things they secured job guarantees for 5,000 workers scheduled to be fired and enabled them to take three months of unpaid leave, while receiving unemployment benefits and vocational retraining. The arrangement committed employers to continue paying workers' benefits, and to rehire them at the conclusion of the unpaid leave.

By the end of May of last year the security situation had not improved, while the grace period had ended. To prevent a near disaster the Chairman of the Histadrut, MKAmir Peretz, and the General Secretary of the Hotel and Restaurant Workers Union, Rachel Abanayim, requested that the Ministers of Finance and of Labor extend the unpaid leave by an additional three months. They also suggested that the Histadrut and the Government try to encourage tourism and enlisted local labor councils for this purpose. At the same time employers were to agree not to fire workers. Within a month the Government ratified the agreement and massive layoffs were prevented.

In the wake of the September 11 attack on New York's World Trade Center and the heightened waves of terrorist attacks inside Israel, the hotel and tourist industry seemed to be heading toward rock bottom. The hotel workers union and the Associations of Hotels, aware of the possible impact on the country, signed an additional agreement early this year that diverted additional massive layoffs. As a result 2,000 workers were fired, instead of an anticipated 7,000. An additional 400 workers accepted early retirement, while 11,000 out of 18,000 workers agreed to reduce some benefits, such as holiday payments. They were rewarded, in part, with a reduction in union dues.

An unexpected blow to the hotel industry was the fallout from a softening of Israels high-tech exports. Executives and workers in this sector had been accustomed to meet in hotels for workshops and conferences, and for recreation. A sharp decline in income caused them to halt this practice.

Also hit hard was the food sector whose members suffer from a severe loss in income caused, to a great extent, by the decline in tourism. This was aggravated by the loss of $250 million resulting from the virtual halt in trade with the Palestinian Authority.

IMPACTING THE HISTADRUT

Tn he economic decline during the last year and a half has been painful for all Israelis. It has had a profound affect on the financial position of its unions, including the central federation.

The decline in the food and tourism industries has led to a serious erosion of income for the labor federation that depends heavily on affiliation fees. Ironically, the losses to those unions suffering from severe deficits came at a time when their members needed additional assistance to help overcome a decline in wages and benefits.

For the Histadrut the security and economic situation prompted an aggressive effort to increase membership. To facilitate this goal, help was promised by expanding legal services to members, designed to guarantee the status of workers in an era of globalization and privatization. Among other things, counselors were made available for the 30 regional branches of the Histadrut, and legal advice expanded to include members in places of work that are not organized. The use of legal aid has, in fact, already been brought into vigorous use during the current crisis.

In addition, the Histadrut and its affiliated unions have reached out to all workers to organize and join their ranks, with working women as a special target.

A situation room was created to help prepare the Histadrut deal with events on the ground, either as a coordinating body or to initiate and mold policy. It also acts as staff headquarters providing support for the organization and management of the new campaign. Furthermore, the strike-fund was reinforced so workers could campaign for their rights, without drawing upon funds needed for living.

In a departure from old patterns the Histadruts accelerated organizing activity includes extensive marketing through the electronic and print media, street posters, personal encounters, telernarketing, and the wide deployment of union representatives in all working places.

Another target was the protection of temporary workers who use manpower companies. The expanded reliance on these workers to fill long-term positions had been a sore point for years. The Histadrut maintained that many employers, including government agencies, were taking advantage of the security crisis and rising unemployment to expand the use of unprotected workers.

The Chairman of the Histadrut, a Knesset member, initiated legislation to change the relationship of manpower companies to new workers. Any person from a manpower company employed in the same work place for a maximum of nine months may now become permanent and be eligible for a full and equal basket of benefits. During this period they will have the same rights and receive the same benefits enjoyed by permanent employees. It is anticipated that this will end the practice of limiting the rights of temporary workers, who will now find improved conditions from the start.

ASSISTING THE PALESTINIAN WORKERS

Labor unions, traditionally, are proud of their adherence to the principle of international labor solidarity. Since the signing of the Oslo accords in 1993, the Histadrut had focused most of its energies on working with the PGFTU (Palestinian General Federation of Trade Unions). It also supported programs at the International Institute-Histadrut in Kfar Saba that brought participants to Israel for specialized training, from over 100 countries. This included many eager candidates from the Palestine Authority.

The framework Agreement for Cooperation signed on March 5, 1995 between the PGFTU and the Histadrut leans heavily on the support that both organizations gave to what was then an unfolding peace process. They also agreed that efforts to achieve a just, comprehensive and lasting peace would be based on UN SecurityCouncil Resolutions 242 and 338 to help secure the well being of Israelis and Palestinians.

The Agreement also dealt with fund transferences from the Histadrut, with specific goals to help support PGFTU trade union activities. The PGFTU and the Histadrut agreed to the direct transfer of funds from the Israeli Occupational Services Office to PGFTU. These funds were to come from the organizational dues of the Palestinian workers in Israel, with $0% to be transferred to the Histadrut and the other 50% to the PGFTU. According to the Histadrut, the PGFTU received $2,287,518 between 1995 and 2001, an amount the PGFTU claims is much too low. A recent rupture in relations has prevented accurate adjudication of the issue.

Other examples of solidarity include the following:

1. Attorneys were assigned the responsibility of handling the legal needs of Palestinians employed in Israel. While they maintained legal offices in Israel, they worked directly with the PGFTU and its members in the West Bank and Gaza.

The range of legal claims were primarily for severance pay, delayed wages, and other rights covered by Israel's Labor Law, such as annual vacation pay. They also covered such issues as convalescence pay, clothing stipends, social allotments, and disputes with the National Insurance Institute. This level of cooperation was especially helpful in assuring benefits for the Palestinian workers.

2. A joint workshop for Israeli, Palestinian, and German garage workers, held in Tel Aviv and financed through a fund established by Japanese trade unions. The venture focused on health and safety issues, and was rated as highly successful, from a professional and personal point of view. It was also an effective means to enhance relations between unionists in a global economy.

3. A variety of training programs aimed at building the civil society and strengthening democratic unions were organized with the PGFTU at the International Institute-Histadrut, in Kfar Saba. This study program was supported by Israel's Foreign Ministry. Virtually all union activities and contacts have been halted, following the deterioration in relations between Israel and the Palestine Authority. Formal meetings were prohibited either in Israel or in the Authority. Furthermore, workers covered by the arrangement between the Histadrut and the PGFTU could no longer be employed in Israel.

It remains unclear what the future will bring, and whether Israel and the Palestine Authority will soon return to the negotiating table. In the meantime the Histadrut recognizes that meaningful links with the PGFTU are unlikely to resume until peace and cooperation are restored in the region.

Jerry Goodman is executive director of the National Committee for Labor Israel. Avital Shapira works for the International Department of the Histadrut.