Labour strike averted in Israel in last minute deal

Agreement to raise public sector wages through 2017
|labour-reporter.com|Last Updated: 01/04/2016

JERUSALEM (Reuters) — A general strike was averted in Israel in late December when the government reached a last minute deal with a key labour union to raise public sector wages through 2017, giving a particular bump to those earning lower salaries.

Many Israelis had expected to wake up with the country's airports, schools, public transportation systems and many other institutions shut down in what would have been the first nationwide strike in four years.

But the finance ministry and the Histadrut — the umbrella organisation for 700,000 public sector workers — struck a deal overnight, saving the economy the harsh blow that would have stymied growth.

Business leaders had estimated direct economic damage at about 300 million shekels ($77 million) a day while the government saw total damage at 1 billion to 3 billion shekels daily.

The agreement calls for a 7.5 per cent pay increase — or 7.5 billion shekels — spread out over 3 1/2 years, but it will be distributed differentially, helping to close the salary gap between high and low earners, the finance ministry said in a statement.

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