JERUSALEM – Israel Aerospace Industries workers’ union has reached an agreement with the government’s Finance Ministry under which so-called salary deviations previously provided to company employees will be recognized as special retroactive subsidies, the union said.
IAI’s labor dispute came to light in early May after the ministry demanded the return of money that the company’s employees had received for several years without government approval, contrary to what is common in state-owned enterprises. The disagreement jeopardized the delivery of the Arrow 3 air defense system to Germany.
IAI is expected to pay out about a third of its $320 million profit in the form of bonuses to its approximately 15,000 employees from 2023. Half of IAI’s profits go to the state as dividends.
“The apparent oversight described will allow for a timeframe to attempt to regulate the alleged salary discrepancies, while at the same time allowing employee salary promotions,” Yair Katz, president of the workers’ union, told Defense News. “The new agreement should be signed in about three weeks. And with its signing, it will be possible to definitively state that the threat of a labor dispute has been taken off the table.”
Despite the previous threat of business disruption, IAI management supported its employees and presented a united front with the union in the talks with the ministry, claiming that the funds were intended to retain the employees.
Defense News has contacted IAI and the ministry for comment.
