Secretary of the IAI Workers Union, Yair Katz. Succeed in negotiating the bonus for employees. He will now have to deal with irregularities (photo: courtesy of those photographed)
The Ministry of Finance's Salary Commissioner is demanding that the affair of salary irregularities at IAI finally be closed, after five years.
In a letter sent in recent days by Shadi Azzam, a senior deputy (enforcement) on behalf of Payroll Commissioner Efi Malkin, to the IAI workers' union, he demands that he receive from him by June 15 his official response to the issue and any relevant documents, as part of the hearing for the workers before making decisions on the amounts that will be required to be returned.
In his letter, Azzam mentions the sequence of the affair, which began in 2018. At that time, the Commissioner contacted IAI's Director General and the workers' committee and reported that an audit conducted by the Ministry of Finance's Salary Commissioner at the government company revealed that 3,000 IAI employees, including administrative workers and engineers, received the government salary grades 46-45, which are usually reserved for deputy directors general and directors general in the government service. The exact salary depends on the employee's work, education, and length of employment, but it ranges from NIS 18,45 to NIS <>,<> per month.
It should be noted that only recently bonuses were approved for many employees at IAI, with the stipulation that agreements must be reached between the Ministry of Finance and IAI regarding salary deviations discovered in the government company.
Efi Malkin, Payroll Commissioner at the Ministry of Finance. His senior deputy is demanding the materials on behalf of the ministry by next Thursday (Photo: official website, spokesperson for the Ministry of Houther)
There was competition for engineers, but why for administrative workers?
Five years ago, the Director General demanded that IAI's management immediately regulate the deviation, claiming that so many employees had never been allowed to hold the high rank. The company asked for a year to deal with the issue, but since then they have requested and received extensions from the Ministry of Finance to deal with the case. The Treasury also twice agreed to pay raises at the company and bonuses for employees in exchange for ending the issue of irregularities, but this did not progress.
IAI, which employs more than 8,000 engineers, is required to provide them with competitive salary terms than they can receive at other companies, in order to recruit and retain them; However, similar pay cells are often granted to administrative workers, whose competition in their field is much smaller.
IAI has also recorded a continuous increase in sales in recent years, which has accelerated since the outbreak of the war in Ukraine. The company transferred NIS 380 million in dividends to the state on its profits in 2021, which totaled $148 million. In 2022, the company posted a net profit of $213 million.
IAI has the option of transferring employees to a research rating, which provides high salary terms and is agreed upon by the salary supervisor. The company has 3,000 employees in the ranking, but even among them, the supervisor is now investigating suspicions of salary irregularities and granting the rating even to employees who did not meet its conditions.
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With all due respect to the dividend to the state, what about the salary deviations? Chairman of IAI's Board of Directors, Amir Peretz, IAI CEO, Boaz Levy, Director General of the Government Companies Authority, Michal Rosenbaum, Chairman of the Workers' Union, Yair Katz (Photo: IAI)
It should be noted that at Rafael, management and the workers' committee reached a new labor agreement more than a decade ago, with the blessing of the Payroll Commissioner, which gave the company more flexibility in salary levels for employees. Elbit, Israel's third defense giant, is a private company that is not subject to salary restrictions in the public service.
In his letter, Azzam mentions the long sequence of events in the affair. The first contact from the supervisor to the company and the workers' committee was on July 5, 2018. IAI's management responded only after 3 months, and only in July 2019 was a meeting held on the subject between the Commissioner and the company's employees chairman, Yair Katz, with Histadrut Chairman Arnon Bar-David. In September of that year, the committee sent its response. "Although a number of extensions and opportunities were given, there was no progress in regulating salary deviations," Azzam writes.
- Israel Aerospace Industries
- Salary deviations