WAC’s Petition to the High Court

A Job to Win (Chapter 3)

The Workers Advice Center (WAC), through its lawyer, Bassam Karkabi, has petitioned the High Court of Israel, asking it to make the government enforce its own policy, as reflected in a decision of December 2001. This decision would have set a ceiling of 23,000 on the number of foreign workers allotted to building contractors in the year 2002. The effect would have been to re-open jobs for local Arab labor. As in past confrontations, however, the contractors’ lobby stepped up the pressure and the government backed down. For this reason WAC has gone to court.

We shall summarize the main points of the WAC petition. First, for readers who would like a refresher course in the issue, here is the basic background:

In the early nineties, Israeli entrepreneurs latched on to the trend of globalization, farming labor-intensive industries out to countries where labor is cheap. (This has been the case with textiles, for instance, in which many of the Israel’s Arab women once worked.) Construction, however, cannot be farmed out. Building contractors took an opposite tack: importing cheap, unorganized foreign labor. (They began doing this at a time when Israel slapped closure on the Territories, a move that cut 120,000 Palestinians off from their jobs.) The national Employment Service may give permits to the contractors, however, only on condition that no Israeli workers are available. The contractors claim that this is the case. Israelis, they say, are unwilling to work in construction. We at WAC know this to be false with regard to the Arabs, and we are taking pains to prove it both on the ground, by organizing work teams, and in the courts.

The foreign workers are indentured servants, bound to the employer who imports them for as long as they are here. Many go illegal. (Of the 250,000 or more foreign workers in Israel today, only 100,000 are legal.) They often arrive in debt, having paid thousands of dollars for the privilege of working here. (These payments are illegal, but no one enforces the law.) Foreign laborers represent a major saving for construction firms. A foreigner doing basic construction costs his employer, on average, $5.00 per hour, while a local worker costs $7.00. In the course of a year that amounts to a saving of $4800 per foreigner.

The effect on Arab labor, which was once the main force in the construction sector, has been devastating. From 1996 until the year 2000, during a building slowdown, the number of people employed in construction declined by 18,000 (from 245,000 to 227,000). Yet the number of Israelis (almost all of them Arabs) declined by 35,000 (from 150,000 to 115,000). Thus the number of foreign workers in construction rose during this period of general decline, partly offsetting the drop in Arab workers.

By exploiting the poverty of third-world countries, employers have sought to divide the workers, pitting foreign labor against local. WAC is alert to the interests of all workers. We believe that foreign workers should receive the same pay and benefits as locals – and not be used to break the local labor market. The easy exploitation of foreign labor points up how vital it is for workers to stay organized.

The WAC Petition (selections in summary form)

In December 2001, the Israeli government’s Council of Ministers on Foreign Labor decided to cut the number of permits for foreign workers in construction from 45,000 to 23,000. This was one of several steps that the government took to combat local unemployment. It faced a worsening economic situation. The nation had witnessed its first negative growth since 1953. The jobless rate had climbed to 10.2%. To preserve its international financial standing, Israel had to cut its budget for 2002 by 6.15 billion NIS (about $1.5 billion or 2.5 % of the total).

As the economy declined, the Arabs in Israel suffered the most. “Before the present economic crisis,” writes a group of researchers, “unemployment among non-Jews was similar in proportion to that among Jews; it has since grown at a rate three times as high as that which characterizes the Jewish population.” (Leah Achdut, Victor Lavi and Victor Sola, “Unemployment in Israel in the Last Decade: Tendencies, Characteristics and Patterns of Change,” The Economic Quarterly October 2000.)

The decision to cut back on foreign labor made sense economically. Foreign workers send most of their earnings out of the country, while jobless Israelis absorb a large chunk of the national budget in unemployment compensation or welfare payments.

The Association of Contractors and Builders in Israel (ACBI) petitioned the High Court to prevent the cutback. The court postponed discussion several times, giving ACBI and the government a chance to reach an agreement.

Meanwhile, the economic situation continued to worsen. On April 28, the government decided upon an emergency measure: in addition to the 6.5 billion NIS, it would cut 13 billion NIS out of its present, working budget. And how was this to be done? By toughening the criteria for unemployment compensation and for guaranteed minimum income (“welfare”). These draconian measures, the government said, would move many of the chronically jobless back into the labor market.

Despite this critical situation and against all economic logic, on June 24 the Council of Ministers on Foreign Labor increased the allotment of permits for foreign workers in the present year from 23,000 to 30,000. The protocol of the meeting includes this sentence:

“The chairperson of the Council of Ministers opened by presenting the proposal for decision¸ pointing out that the number of permits for employing foreign workers in construction, namely 30,000 for the year 2002, was agreed upon with the representatives of the contractors, taking into account the decline in the amount of building in Israel during 2002, compared with 2001 – a decline of 35% on average for all types of construction.”

Instead of reducing the number of permits for foreign workers from 45,000 to 23,000, as decided in December 2001, the Council reduced them only to 30,000, an amount corresponding to the 35% decline in building activity. Thus the Council preserved the status quo, creating no job openings for local workers.

Here is another way to view the absurdity of this decision. The economy was so bad in December 2001 that the government cut the number of permits for foreign workers to 23,000. Since then, the economy has worsened even more. It would have been logical, therefore, to cut the number of permits still further. Instead, the Council increased them. It would have been logical to establish a mechanism for putting Israelis in place of foreign workers, for example, by making it a condition that for every hundred permits, a contractor must hire a specific number of Israelis.

No such measures were taken.

The Council consists of thirteen ministers. Only one was present at the meeting – the rest sent representatives. Three of those present voted: the lone opponent was a representative from the Treasury.

The Employment Service rushed into action, issuing the permits within nine days of the decision, although by law it should not have gone into effect until fourteen days had passed, giving ministers a chance to appeal.

Absurd as it may seem, however, the Council decision did not result from blindness or negligence. It does serve an interest: that of the building contractors. It does not serve the interests of jobless Israelis nor those of the nation’s economy.

Israel’s Basic Law, “Freedom of Occupation,” protects the citizen’s right to work and find a job. The Council decision harms the chances of unemployed Israelis to work in the construction sector. It infringes on their freedom of occupation to an extent that the circumstances cannot justify.

In determining the number of permits for foreign workers, the Council accepts at face value the contractors’ claim that there is a shortage of Israeli labor power. This is unreasonable, given the fact that the contractors have other motives to prefer foreign labor.

WAC has amassed considerable experience in trying to connect building firms with potential Israeli workers.

Assaf Adiv, the national coordinator of WAC, is in frequent contact with the contractors. He affirms that except for one, Solel Boneh Inc., he has found no willingness on the part of these firms to hire Israelis.

Here are a few examples, selected from many. (In the Petition, WAC used only the initials of the companies, since they were not a direct party to the case. – Ed.)

1. K.B. Inc. After contacts with this company and at its request, WAC sent it workers’ phone numbers. The company refused to commit itself to pay the wage deemed fair by the labor laws. ACBI promised to intervene. As far as WAC knows, nothing was done.

Recently the Employment Service published a “Report on Permits for Foreign Workers in the Construction Sector for 2002.” It shows that K.B. Inc. has received permits to employ 82 foreign workers this year.

2. B.Y.G. Inc. After WAC approached this company, its representative met with Assaf Adiv and Dani Ben Simhon on June 25. He reported that his company employs 740 foreign workers. He explained that the building firms today are based on foreign labor. “If all the companies make the transition to hiring Israeli workers,” he said, “the situation will change, but today the tenders are calculated on the basis of employing foreign workers, both with respect to hours of work and with respect to labor costs.”

According to the “Report on Permits,” B.Y.G. Inc. received permits for 421 foreign workers in 2002.

3. T.S.B. Inc. This company initiated contact with WAC in April 2002. At the firm’s request, WAC sent it a letter detailing the types of work done by WAC registrants who seek jobs in construction, along with their addresses. A company representative then phoned Assaf Adiv on April 25, asking WAC to supply workers for a week at a site in Tel Aviv. Adiv asked whether the company hires temporary workers only. He learned that the company employs about eighty foreign workers on a permanent basis. Adiv then explained that WAC is not a personnel (“manpower”) company and that it does not supply short-term labor. He suggested that the company turn to WAC when it is ready to replace at least some of its foreign workers with the local unemployed.

According to the “Report on Permits,” T.S.B. Inc. received permits for 421 foreign workers in 2002.

4. D.C.A. Inc. On January 27, twenty Israeli Arabs had been working for twelve days, through a personnel company, at a building site in Kiryat Yam. They witnessed the arrival of a new group of Rumanian workers, who at once were assigned to jobs at the site. The company supervisor informed the twenty Arabs that they were no longer needed and told them to collect their tools.

The Arab workers complained to WAC. After confirming their account, Adiv approached the company manager for the northern region and laid out the facts. Adiv also stated WAC’s readiness to aid in mobilizing Israeli construction workers from among its members. The manager responded, in a telephone conversation on February 10, that the Arabs had been hired as temporary workers only. He said he had been forced to take local people because of a shortage of foreign labor: inspectors from the Labor Ministry had come to the site at Kiryat Yam and removed his former foreign workers, on the grounds that the company did not have permits for them in the first part of January.

On checking further, Adiv was able to establish that the Arab workers in this case have had years of experience in construction. Some are willing to give affidavits supporting the above account.

According to the “Report on Permits for Foreign Workers in the Construction Sector for 2002,” this company has now received permits to employ 1201 foreign workers.

5. A counter-example: Solel Boneh, Inc. has appointed one of its own, Mr. Sharga Katz, to find and hire Israeli workers. Through a joint effort with WAC, 150 Israelis are now employed in the company’s projects. [Since the petition, the number has increased to 225. – Ed.] This success shows that when a company is willing to pay a fair wage, it has no difficulty finding workers.

Final paragraph of the petition:

The decision by the Ministerial Council on the Issue of Foreign Labor is unreasonable in the extreme. It fails to fit the economic reality and impinges on the right of Israelis to work. It contradicts government policy, whose avowed purpose is to increase the employment of Israelis in construction, while reducing that of foreign workers. The decision increases unemployment precisely at a time when the latter is on the rise and the economy is declining. At the expense of Israel’s jobless, the decision serves the interests of a narrow group that prefers foreign labor because it is cheap.

From Challenge # 75 September-October 2002

אודות Wac-Maan