POVERTY OF SOCIAL POLICY IN ISRAEL

Insufficient social protection of Israeli workers

  Comparison to the European Charter clauses

Consequences on Israeli Society

 Didier BERTIN – 15 March 2009

 

Reference to the Charter of Fundamental Rights of the European Union regarding work regulations and in particular with:

Article 12 - Freedom of assembly and of association

Article 24 - The rights of the child

Article 27 - Workers' right to information and consultation within the undertaking

Article 28 - Right of collective bargaining and action

Article 29 - Right of access to placement services

Article 30 - Protection in the event of unjustified dismissal

Article 31 - Fair and just working conditions

Article 33 - Family and professional life

Article 34 - Social security and social assistance

Article 35 - Health care

Article 36 - Access to services of general economic interest

Article 38 - Consumer protection

 

I-Introduction

Israeli work regulations do not protect workers as in continental Western Europe or as stated in the European Charter of fundamental rights. Individual contract is the corner stone of work relations since the national legal frame related to work is very liberal. The employers have generally the lion’s share in work contracts since any employee may be dismissed at any moment without any justification.

This report is made on the basis of information collected locally from workers and which could contains errors and omissions. The weakness of workers protection is particularly visible in medium and small companies, which employs most of workers. The few Israeli big companies may offer very good work conditions on their own initiatives or at the  request of companies’ workers ‘committees, which act as Trade Unions in a field limited to each particular Company with no national implications .

 This report will be submitted to few Israeli members of Parliament, who show an interest for working conditions and whose opinion on the report will be welcome.

Whatever is the adopted economic system in a country, which is currently the “ultra-liberalism;” citizens need stability in their work to face the needs of their families without fearing the short term future and for sake of individual dignity necessary to social stability.

II-Working hours

The working hours are 43 hours (or 45 hours with lunch time) as compared to 35 to 39 hours generally applied in Western Europe.

III-Minimum wage

The minimum wage is particularly low as compared to price index. This wage is 3 600 NIS for 43 work hours i.e. approximately 680 € or 550 € for 35 hours, but lower in purchasing power parity with France or Germany e.g. a flat rents in the suburbs of Tel Aviv s area may represent easily an amount in the vicinity of  the minimum wage. The minimum represents only 41% of the French minimum wage in France. The absence of day care centres for children involve heavy expenses, which reduce substantially the effective earned revenues. Some families are financially obliged to leave very young children alone after school.

IV-Redundancies

As indicated an employee may dismissed at any moment and without any justification. This creates instability not in line with family needs and Social order. Stating that an employer able to easily dismiss employees, is more inclined to hire them, is a wishful thinking especially in case of crises. Employers should pay one month of indemnity per year of seniority in their company. This indemnity is applicable after one year of seniority.

 V-Holidays

The paid holiday’s right is 1 day per worked month with a maximum of 12 business days per annum over the first 4 years in the same company and might be increased thereafter for people remaining in this same company. In fact these days are often utilized to compensate religious holidays during which many companies are closed and are not obliged to pay their employees except for 8 days and one additional for independence day. The numerous religious holidays may absorb all paid holidays. Some companies may decide on their initiative and without any obligation to grant longer vacations or pay religious holidays.

VI-Trial period and Lay-off pre-notice

The trial period can be any period decided by the employer.  The lay-off pre-notice is 14 days after 6 month seniority and one month after one year.

VII-Temporary closing of companies

As already mentioned there are no obligations to pay the employees in case of closing for religious holidays but even in case of closing for any other reason decided by the employer.

VIII-Absence for health reasons and health care at work

In case of sickness, the employees are not paid during the first day and receive 37.5% of their wages the second and third day. After these 3 day period they are paid at 75% over a maximum period of 12 days per annum and not paid at all thereafter. This wage reduction system may disorganize substantially the budget of a modest family for a simple sickness of a few days.

It must be noted that for example the duly paid absence for health problem is 12 months in France (3 fully paid months and 9 half paid months) and could be longer for very serious illness.

Employers are not obliged to organise any periodical medical examination of workers to determine systematically their general health conditions or to identify any occupational disease for sake of prevention or work adaptation. No systematic medical control of work premises is done for sake of workers protection. The few Israeli big companies may organize medical checking on their own initiative.  

IX-Consumption credits and overdrafts

In order to compensate insufficient revenues, Israeli workers utilize very often overdrafts and credits even to pay food. Systematically the cashiers of supermarkets ask clients in how many instalments they want to pay their purchases, which are mostly food. Paying food by credit may only lead consumers to over-indebtedness and bankruptcy.

X- Unemployment indemnity

The unemployment indemnity paid by the National Agency in charge of unemployment represents roughly 70 to 80% of the normal wage over a period not exceeding 175 days.

XI- Retirement

The retirement age is 62 years for women and 67 years for men, which gives the latter only 11.5 years of retirement expectancy as a result of an average life of 78.5 years. The monthly pension is very approximately in the vicinity of 2 000 NIS (380 €). A worker may decide to save voluntarily part of his wage in a pension fund and in this case the employer should add a monthly amount to such saving. The pension fund is most of the time paid in one lump sum on retirement date. The amount of the pension fund will vary from a company to another according to internal decision of each company.

XII–Poverty and inequality of national revenue repartition

21.6% of the population live below poverty line of about 3 600 NIS (680 €). This amount is roughly similar to the minimum wage. The poverty line is normally defined as half of the averaged wage but average wage is meaningless in case of substantial   inequality of revenues. Poverty may affect Israeli middle class and full time academic workers. Single mothers are particularly vulnerable.

As a matter of fact this inequality as reflected by a Gini index of 0.386 to one, is similar to the one of Jordan Kingdom, as compared to 0.28 for France and Germany and 0.23 for Sweden.

Low revenues generate over-indebtedness and insufficient saving capacity to face decently post retirement period.

XIII- Trade Unions and Government policy

There are no trade Unions in Israel as known in Europe. There are association of workers by company, whose action is limited to the sole company.  These associations are thus “Company Committees”, who do not defend the workers nationally.

Histadrout is the sole national Trade Union usually and its inefficiency is questionable regarding the above mentioned situation. The workers are consequently running high risks under very rightist governments.

XIV- Rights of Consumers

The lack of competition between food distributors and the absence of strong consumer organizations involves high prices as compared to Europe where hard discount system is now widely developed.

XV – Workers condition – Social policy - Defence budget

Many leaders tend to convince workers that their economical difficulties are due to compulsory high Defence expenses despite 90% of such expenses of approximately USD 10 billions, are offset by unrequited foreign transfers. As a result workers neglect their own rights at the time of elections.  Security tends to monopolise the political communication despite an important matter should not involve the negligence of another.