The labor relations crisis at SAP Israel, stemming from the management’s attempt to cancel collective agreements, was discussed on Tuesday in the Knesset’s Labor and Welfare Committee.
The chair of the Internet and High-Tech Union at the Histadrut, Yaki Halutzi, clarified that the unilateral announcement to cancel the agreements came after principled understandings had already been reached with the workers’ committee regarding an efficiency process at the company.
“It is fine and acceptable for an employer to seek to change collective agreements, and this is something we know how to sit down, discuss, and work through,” Halutzi said. “A unilateral announcement to cancel all collective agreements is a very unusual step, especially in a workplace with active labor relations, and especially in a European company that employs 110,000 workers worldwide, many of them under collective agreements. This strips away all collective protections from about a thousand workers in Israel.”
Halutzi emphasized that SAP Israel employees organized already in 2014, and since then seven collective agreements have been signed at the company without the need to declare any labor dispute until now. During the period in which these agreements were in force, the Israeli hub of SAP continued to grow and expand, including through the acquisition of other companies whose employees were also incorporated into the collective agreements.
“Labor relations at SAP until now were good, and therefore we were very surprised. It should be said that the high-tech sector in Israel is also affected by the war, and it may be connected to SAP as well. It has become less comfortable to do business here, and this can stem from various reasons — not only anti-Israel sentiment but also ‘why do I need the headache of employees going to reserve duty,’ and concerns about the ability to provide service to clients during wartime.”
Gad Ravid, chair of the SAP workers’ committee, said: “It is true that today there is an AI revolution and there is a need for efficiency. We also know how to become more efficient and we have already done so in the past through agreements.”
Ravid added that senior executives in the global company are talking about efficiency of 1%–2%, while in the Israeli unit they are speaking about efficiency cuts of tens of percent. “That is a problem. We are sitting in negotiations with a manager from Italy who tells us explicitly that he wants to carry out efficiency measures here because in Germany, France, and Italy it is harder for him to fire people since the state protects workers. Our role as a labor union is to protect workers in Israel from arbitrary dismissals, and that is what we want to do.”
SAP did not send representatives to the hearing, but in a letter sent to the committee it argued that this is a legally complex issue and expressed doubts as to whether a substantive discussion could be held without proper preparation.
The company referred to the statement made by the Commissioner of Labor Relations from last week, according to which it had not met the legal and collective agreement requirements necessary for their cancellation to be registered as valid, and argued that the Commissioner’s authority on the matter is merely “declarative,” and that in practice the agreements had already been terminated in accordance with the company’s notice.
“Israel is one of the strongest democracies in the Western world, and within it the principle of freedom of contract has always been, and remains, a supreme principle,” the management’s position paper stated. “It is self-evident that one cannot compel a party to an agreement, even a collective agreement, to continue its application forever and under all circumstances.”
Geula Tzemach said that the law sets clear conditions for the registration of a collective agreement, as well as for the registration of its cancellation, and added that the ministry does not have substantive authority to determine whether the agreement has been terminated or not. However, according to a straightforward reading of the agreements, the ministry’s position is that the company did not comply with the provisions of the law and the agreements themselves in its request to register their cancellation.
According to her, there is a dispute between the Histadrut and the company’s management, which can only be resolved through agreement between the parties or by filing a case with the Labor Court.
She added that both sides have approached the Commissioner of Labor Relations at the Ministry to assist as part of her role in mediation and accompanying the dispute.
Halutzi added that the parties are currently in negotiations, that they are updating the labor relations commissioner, and that he himself is involved in the negotiations with the company’s management.
The chair of the committee, MK Michal Waldiger (Religious Zionism), clarified that the committee is not authorized to rule on disputes between the parties, but nevertheless saw value in holding the discussion.
“I leave with an optimistic feeling that there is dialogue between you. I hope that the company and the workers’ committee will reach agreements, perhaps with the support of the commissioner. I think it is very important that more companies like this come to Israel. It is a win-win for the company itself because our economy and market are strong, and also for the workers and employment here.”
The hearing was convened at the request of the deputy chair of the Histadrut and head of its liaison office with the Knesset, Roei Yaakov.