Tnuva cancels individual contract bonuses

Employees riled at decision to eliminate bonuses while company distributes dividends to shareholders; workers with collective agreements threaten to strike

Orna Yefet, Calcalist|Published: 02.29.12 , 08:28

Calcalist Exclusive: Workers at Tnuva, Israel's leading dairy co-op, who have individual contracts with the company, will not receive their bonuses for 2011. Several days ago, the company's management informed division heads and they broke the news to the hundreds of workers. The bonuses are usually distributed to staff managers for their performance in the previous year.

Tnuva currently employs 500 employees under individual agreements and another 6,000 employees under a collective agreement.

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The announcement sparked resentment among the employees who were looking forward to their annual bonus. They claim that they had put in extra time during the summer on the backdrop of the social protest and the consumer boycott of the company's products due to the pricing of its cottage cheese.

Indignation is further fueled by the dividends the company distributed to shareholders – last month Tnuva announced it would distribute dividends to its shareholders among which are the Apax Fund, Mivtach Shamir and the kibbutzim. This follows a considerable dividend distribution in the amount of NIS 1.3 million and a NIS 570 million dividend distribution in 2009. The company did not distribute dividends in 2010.

The company is now seeking solutions to appease employees such as giving the bonus to employees from a certain rank and above.

Meanwhile, thousands of the diary's employees who are part of the company's collective agreement are in a battle against the management.

At the beginning of the month, the workers' committee announced industrial action; Monday the cooling off period imposed by the Labor Federation ends allowing the employees to call a strike. However, at this point the workers' committee is negotiating the wage agreement that expired last summer with the management and no decision has been made yet over whether to bring work to a standstill.

The collective agreement workers are bargaining for their share of the dividends that the company distributed to shareholders. Among the 6,000 collective agreement employees, 4,000 are entitled to annual bonuses.

Several weeks ago, upon the outbreak of the labor dispute, Tnuva workers' committee chairman Ahiav Simchi said: "We will not tolerate a situation wherein Tnuva's owners indulge in a bath of milk and honey. We will not agree to them garnering fat dividends while the employees get crumbs".