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Labor Relations in an Age of Change

The Annual Economic Conference, 2004

Committee Chair: Dr. Guy Mundlak, Law Faculty and Labor Studies Department, Tel Aviv University.
Committee members : Dr. Yoram Blashar, Chairman, Israel Medical Association
Dr. Chaim Binyamini, Vice President for Human Resources, “Teva” Group
Prof. Yinon Cohen, Sociology and Anthropology Department, and Labor Studies Department, Tel Aviv University
Dr. Karnit Flug, Director of the Research Department, Bank of Israel
Adv. Orna Gayle, Legal advisor in the Wage and Labor Accords Department, Ministry of Finance
Prof. Yitzhak Harpaz, School of Business Administration, Haifa University
Ms. Ronit Nadiv, Manpower Planning Authority and Labor Studies Department, Tel Aviv University
Mr. Benny Pepperman, Director of the Manpower Planning Authority, Ministry of Industry, Trade and Employment
Mr. Yossi Rosen, CEO of the Israel Corp.
Adv. Leah Vefner, Secretary-General and Legal advisor, Israel Medical Association
Prof. Zvi Zussman, Research Department, Bank of Israel
Research Assistant: Ms. Tali Crystal

The following reccomendations address the labor relations crisis, by focusing on labor disputes in the public sector and low-wage employees in the private sector. The committee’s conclusion is that the best solution for conflicts or questions on socio-economic policy is to encourage agreement through a multi-lateral process under legal control and public scrutiny, one whose ethical and professional considerations are transparent and presented to the public.

The committee’s recommendations concern the institutional structure that influences the labor market. In general, it is recommended that a labor relations authority be established, whose members include representatives of state authorities, employer organizations, employee organizations and other organizations within the civilian population. The job of this authority would be to resolve economic-political disputes within the civil service, to formulate accepted criteria regarding employment in the public sector, and to help establish occupation and employment policies in general. Consulting with the authority would be required, but its recommendations would not be binding upon the governmental authorities. Not being required to consult the authority and overlooking its recommendations would have judicial bearing on policy decisions.

Labor disputes in the public sector: The numerous strikes stem, inter alia, from the inability of existing mechanisms to resolve labor disputes. A unilateral approach to labor disputes must be avoided, an approach whereby each side uses its power to subdue the other side, or where only the legal system is used to decide conflicts. We must strive for a bilateral approach that promotes joint solutions based on agreement. In light of its analysis of existing problems, the committee recommends:

  • Prevention: The labor relations authority must define accepted norms for labor relations in the public sector and promote the use of mechanisms for resolving disputes and examining their effectiveness.
  • For economic disputes (deciding future rights): Means must be established for resolving labor disputes based on agreement – conciliation, mediation, and accepted legal and economic arbitration. This requires that the state invest in developing mechanisms for mediation, remove obstacles that are rooted in the law, and identify legal rules that can motivate the parties to enter a framework for dialogue.
  • For legal disputes (regarding existing rights): We must encourage the development of mechanisms that can be an alternative to the Labor Court, while supporting self-resolution of disputes without relying on the law, such as fact-finding procedures and conciliation.
  • For disputes that involve both labor relations aspects and political aspects: It is necessary to turn to the public labor relations authority for a consultation proceeding.
  • Binding arbitration by default