The Histadrut ‘Price Tag’

The Histadrut is forcing aggressive unionization on private companies. Who on earth would want to open a business in Israel in these conditions?

The recent wave of strikes is just the tip of the iceberg when it comes to the real story: the strengthening of the Histadrut in the private sector · A series of legal precedents allow the Histadrut to unionize members without any interference from management, which thus loses control of its own personnel · The Labour Court: a militant and aggressive union is preferable

הסתדרות הוט
Punishing the boss. HOT workers protesting management. Photo: Flash90

Compensation amounting to a million shekels – this is the unprecedented amount ‘Hot Mobile’ was forced to pay the Histadrut for “harming the right of organization of its workers.” Thus the verdict of the Labour Court last week. This verdict is a significant escalation in the efforts of the Histadrut – under the aegis of the Labour Court – to strengthen its hold in the Private Sector. But the story behind the scenes reveals an even bigger drama: a struggle between the General Histadrut and the National Histadrut, the latter of which has a more moderate approach and prefers mediation and cooperation to open conflict with employers.

And this is the story: last April, after years of attempts by all three workers’ unions (including “Power to the Workers”) to organize the workers of the HOT telecommunications company, the General Histadrut declared success in signing on a third of the members of Hot Mobile – a daughter company of the group – which allowed it to serve as the sole legal representative of the company’s workers. ‘HOT’ management panicked, and argued before the court that the HOT group is one unit and that one cannot separately unionize one of its daughter companies.

On the 25 May, the National Histadrut suddenly declared that it succeeded in signing on a third of all HOT workers and that it is the sole representative of the group’s workers. HOT management received this news with relief, but the General Histadrut was furious and it quickly appealed to the National Labour Court.

Because management tried to intervene in the unionizing attempt at ‘HOT Mobile’ – by blocking the Histadrut website on company computers and summoning one of the heads of the workers’ committee for a pre-firing hearing – HOT faced two lawsuits dependent on the question of whether ‘HOT Mobile’ is legally considered a separate company. If the court decided yes, then the General Histadrut would become the legal representative of HOT Mobile’s workers, and management’s action will be judged to be an illegitimate intervention in unionizing; but if the court decided no, then the National Histadrut – which unionized all HOT workers – would be the representative, and the company’s actions will not have been prohibited. As how can one wrongly intervene in a union which isn’t considered as such?

The judges, who understood the consequences perfectly well, ruled in favor of the General Histadrut and ruled that HOT Mobile must pay compensation to its workers – a step which will no doubt deter other companies from trying to influence the future of their personnel.

The Socialism Court

The General Histadrut owes its strengthening in the private sector to the Israeli Labour Court, which has served as its legal arm of enforcement for all intents and purposes. In January 2013, the Court set a new precedent by ruling that: “The employer may not intervene in organization attempts by his employees, by action or by word opposing the organization, directly or indirectly.” Thus company owners were now denied the right to even voice an opinion on organization trends: “The employer may not approach the employee by personal correspondence, may not initiate or meet with the workers, as regards organization and its consequences.”

This means that as soon as an organization attempt has begun, the employer has effectively lost control of the management of its personnel, even before the workers were actually organized by the Histadrut. The Pelephone precedent became a turning point when the Histadrut jumped at the chance, starting an aggressive campaign to organize workers in other private companies in the economy. The cellphone companies ‘Cellcom’ and ‘Orange’ were next, and after them fell many well-known companies: Burger Ranch, McDonalds, Agadir, Paz, Shenker College, Ynet, Globes, Channel 2, as well as insurance companies and investment houses.

The insurance companies Clal and Migdal also suffered the wrath of the Labour Court. Migdal was prohibited from employing additional workers to compensate for the damage of workers’ sanctions against it. Now we have the HOT ruling which determines an exorbitant price tag which will deter other companies from influencing its workers organization efforts.

The attitude of Judge Ruth to the issue is especially instructive: “We therefore received with complete surprise the return to the arena like a swift phoenix of the National Histadrut which declared […] itself to be a representative union at HOT.” It’s hard to miss the venomous sarcasm here: What do you think, HOT – you think we didn’t notice that you prefer the moderate National Histadrut? Who are you to be involved?

Later she makes a serious accusation against ‘HOT’: “From the correspondence between the HOT group and the National Histadrut […] one can learn that the National Histadrut did not object to one-sided outsourcing in Hot Systems as Power to the Workers did, or to conducting one-sided changes in the structure of [HOT Group].” And notice this accusation: “[HOT Group] no doubt saw the National Histadrut as more ‘comfortable’.”

According to the Labour Court, this is how the economy should look: the workers should aggressively organize and take a perpetually confrontational stance towards management. This unionization should take place without the knowledge or involvement of the employer. Most importantly, that union must prevent any one-sided outsourcing or structural changes.

Who on earth would want to open a business in Israel in these conditions?

English translation by Avi Woolf.

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