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The Power to Alter Personal Provisions in Collective Agreements*

Published online by Cambridge University Press:  12 February 2016

Frances Raday
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Extract

On two notable occasions in the past two years, it was found necessary to use legislation in order to buttress the potency of general collective agreements. The first of these occasions was when legislation was used to give overriding legal force to a general collective agreement between the Histadrut and the Government incorporating the tax reform recommendations of the Ben Shachar Committee. The second was a similar use of legislation with regard to the general collective agreement between the Histadrut and the Government incorporating the special increments recommendations of the Barkai Committee. The two collective agreements concerned shared one important quality: They both purported to derogate from rights previously enjoyed by employees under existing collective agreements. One of the reasons for legislative intervention to support these agreements was the existence of doubt as to the legal effectiveness of their attempt to derogate from the individual employees' rights.

The source of the doubt as to the legal effectiveness of such agreements lies in the existence of two distinct levels at which a collective agreement functions: the collective and the individual levels. At the collective level, conditions are determined by the collective bargaining parties, the employer or employers' organisation on one hand and the employees' organisation on the other; at this level, the collective agreement is a consensual arrangement between the parties to it, the parties fix the terms and have a contractual right to demand their enforcement. The terms fixed at the collective level take effect, however, also at the individual level; the individual employees of an employer bound by the agreement are both bound by the agreement and entitled to enjoy the rights bestowed by the agreement. The Collective Agreements Law gives forceful expression to the effect of the collective agreement's personal provisions at the individual level, giving them immediate and mandatory effect as part of each individual employee's employment contract.

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Articles
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Israel Law Review , Volume 13 , Issue 3 , July 1978 , pp. 326 - 358
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Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 1978

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References

1 Collective Agreements Law (Ad hoc provision) 1975, S.H. no. 766, p. 122Google Scholar. The Ben Shachar Committee was the Committee for Tax Reform, established by the Minister of Finance, 15 December 1974; the Committee presented its report, “Recommendations for Changes in Direct Taxation”, on 12 March 1975.

2 Collective Agreements Law (Ad hoc provision) 1976, S.H. no. 809, p. 182, 11 May 1976Google Scholar. The Barkai Committee was the Committee for Examination of Wage Issues in the Public Sector, established by agreement between the Government and the Histadrut, 10 October 1975; the Committee presented its report on 5 March 1976.

3 All collective agreements function on these two levels, whether or not they are governed by the Collective Agreements Law, 1957, 11 L.S.I. 58. However, the legal effect of collective agreements not governed by the Law is different from that of agreements under the Law, and it is beyond the scope of this article to examine the problem of collective alteration of provisions of collective agreements which are not governed by the Law. For discussion of the legal effect of collective agreements not governed by the Law, see Reuven and Shimeon v. Slate of Israel (1975/76) 7 P.D.A. 120, 141–142; The Technion v. Histadrut, General Federation of Labour in Israel (1975/76) 7 P.D.A. 313, 327–328. For the general normative effect of collective agreements under the Law, see Collective Agreements Law, 1957, secs. 15(c), 16(c) (11 L.S.I. 58); Vinestein v. El Al (1976/77) 8 P.D.A. 44, 54.

4 Collective Agreements Law, sec. 19; “personal provisions” are defined in the section as “provisions of a collective agreement concerning terms of employment and termination of employment, and personal obligations imposed on, and rights granted to, an employee and employer by such provisions”.

5 Ashdod Port Committee of Maintenance Work Managers v. Israel Ports Authority (1971/72) 3 P.D.A. 60.

6 At 83.

7 At 75.

8 Reuven and Shimeon v. State of Israel (1975/76) 7 P.D.A. 120.

9 Plonim v. The National Labour Court and the State of Israel (1976) (III) 30 P.D. 382, 389.

10 Dr. Ben-Israel notes that there is an “internal contradiction” in the dicta of the National Labour Court in the Ashdod Port Case: see Ben-Israel, , A New Dimension in Collective Agreements (Hebrew University, Faculty of Law, 1976) 87, n. 62.Google Scholar

11 See, particularly, for judicial exposition of this approach, Bank Ozar Lehayal Ltd. v. Central Committee of Clerk's Histadrut and Beersheva Water Council (1970/71) 2 P.D.A. 260, 269; El Al, El Al Works Committee, and Others v. Herut and Others (1976/77)8 P.D.A. 197; see, generally, Ben-Israel, , A New Dimension in Collective Agreements, op. cit., 43–62.Google Scholar

12 Collective Agreements Law, 1957, secs. 13, 14; see infra n. 16.

13 Goldwasser v. State of Israel (1976/77) 8 P.D.A. 124, 135.

14 Cf. Plonim v. The National Labour Court and the State of Israel (1976) (III) 30 P.D. 382, 389, see discussion in text infra at n. 39, 40.

15 Secs. 7, 9, 10:

7 “A collective agreement and any variation or extension thereof shall be in writing.”

9 “A collective agreement and an agreement varying or extending a collective agreement shall be exempt from stamp duty.”

10 “Within three months from the date of signing, a copy of any collective agreement … shall … be sent for registration … the same shall apply to an instrument of variation, cancellation or extension of a document as aforesaid”.

16 Secs. 13, 14:

13 “Where a period of validity of a collective agreement for a specific period has expired, and neither of the parties to the agreement has given notice to the other, in due time and in writing, of the termination of the validity thereof, the agreement shall continue in force as a collective agreement for an indefinite period; the time for notice of termination shall be as determined in the agreement or, where a time has not been so determined, not less than two months before the expiration of the validity of the agreement.”

14 “Where a collective agreement is for an indefinite period, either party may terminate it by giving the other party advance notice at a time determined in the agreement or, where a time has not been so determined, not less than two months before the day of cancellation: Provided that the period of validity of a collective agreement originally made for an indefinite period shall not be less than one year.”

17 This is the interpretation of sec. 19 apparently given by Berinson, Justice in Shahad v. Dardikman (1971) (II) 25 P.D. 182Google Scholar, and also by Hausman, and Goldberg, , Labour Law (Sadan, 1973) 63aGoogle Scholar. However, even if the phrase providing for “variation” is indeed intended to qualify only the phrase immediately preceding it, it does not inexorably follow that the legislature intended to exclude “variation” where the collective agreement has not yet lapsed. This does not appear to be one of those cases where a rigid application of the rule inclusio unius exclusio alterius is called for; see, for instance, the interpretive possibility suggested below in Alternative Two (b).

18 In Plonim v. The National Labour Court (1976) (III) 30 P.D. 382, 389, the Supreme Court held that secs. 7 and 9 of the Law lent weight to this interpretation of sec. 19; however, it is submitted that, since these sections are merely procedural and do not indicate when a “varying” agreement is or is not valid, they add nothing conclusive to the question of whether a valid varying agreement may be concluded during the course of a collective agreement or not. For the substance of these sections, see supra n. 15.

19 The language of the section in the original Hebrew (ca'din), “lawfully”, lends itself to this interpretation, for, even if restrictively interpreted, it would surely include amendment by the collective bargaining parties themselves, who have been recognised as an “autonomous legislature” by the Labour Courts.

20 See, by way of analogy, Elgim v. Seglovitz (1974/75) 6 P.D.A. 16, 21.

21 Shahad v. Dardikman (1971) (II) 25 P.D. 182, 184–185. Ashdod Port Committee of Maintenance Work Managers v. Israel Ports Authority (1971/72) 3 P.D.A. 60, 83.

22 This interpretation of sec. 20 as preempting collective waiver is more conceivable in the context of interpretation (b) than of interpretation (a) above, for according to interpretation (a) personal provisions may even be “repealed” and hence it would be incongruous to say they cannot be waived ab initio by the collective bargaining parties.

23 (1955) H.H. no. 7, p. 233.

24 See text supra at n. 11.

25 The anomaly of a restriction on the freedom of contractual parties to modify their obligations in English common law arose from the technical requirement of consideration and is not relevant in Israel after the passing of the Contracts (General Part) Law, 1973, 27 L.S.I. 117.

26 It should be noted that a collective agreement under the Collective Agreements Law cannot be considered a contract for the benefit of a third party under the Contracts (General Part) Law 1973, since the Collective Agreements Law, secs. 15, 16, 19, creates a lex specialis regarding the relationship between the collective agreement and the individual employee (see sec. 61 (a) of the Contracts (General Part) Law). Hence the restrictions on modification of contracts for the benefit of a third party under the Contracts (General Part) Law, secs. 34, 36, are not applicable; nor do they provide a source of analogy since the principles of interpretation of the normative provisions of a collective agreement are based on analogy with statutory and not contractual interpretation – see supra n. 11.

27 Sec. 22.

28 Ashdod Port Committee of Maintenance Work Managers v. Israel Ports Authority (1971/72) 3 P.D.A. 60, at 83.

29 Ibid., at 75.

30 Reuven and Shimeon v. State of Israel (1975/76) 7 P.D.A. 120, at 134.

31 We shall examine the policy aspects of the distinction below, and we shall show that the dicta on retroactive cancellation and renegotiation are not, in the view of this writer, reconcilable on the basis of the policy resulting from the Court's differing treatment of the two issues.

32 See Ben-Israel, , The Collective Agreement in Israel as a Normative System, doctoral thesis, (Hebrew University, Jerusalem, 1975) 284, n. 626.Google Scholar

33 The case was one of retroactive waiver, as indeed referred to in the quotation itself.

34 The terms used were “retroactive waiver” and “estoppel”.

35 The relevance of the distinction drawn in the dictum, between the rights in question and statutory rights, is most clearly understood in the context of the judicial history of division of opinion between the Supreme Court and the National Labour Court on the issue of retroactive waiver of statutory rights.

36 This approach may be supported by two other decisions. In Moshe Lustman v. Joseph Pearl (1973/74) 5 P.D.A. 184, at 193–195 where a later collective agreement, with retroactive effect, was seen as supplementary to and part of an earlier collective agreement which apparently continued to be in force. It was later held that this decision was not relevant to the question of derogation from personal provisions in a current collective agreement: Arad Chemical Industrial Incorp. v. Elisha Peled and Moshe Azrie (1973/74) 5 P.D.A. 431, at 440. Hence we could conclude that the earlier case determined only that favourable or neutral conditions in the later agreement could modify existing personal provisions under the earlier agreement; this in spite of the fact that there is some evidence of the facts of the Lustman case which reveals a derogation from employee rights in the later agreement; see p. 188 of the “proceedings”.

37 1957, 11 L.S.I. 47. See similarly cases in preceding note.

38 The result of the Supreme Court decision, in terms of judicial precedent, is in effect to establish a parallel legal approach to that of the National Labour Court rather than to replace it: see Zori, Pharmaceutical and Chemical Co. and Others v. Dr. Z. Rikas (1972/73) 4 P.D.A. 479, at 510, 511, and see the subsequent judicial history of the National Labour Court's decision in that case: Raday, , “Collective Dismissal” in Israeli Reports to the 10th Congress of Comparative Law (The Sacher Institute for Legislative Research and Comparative Law, the Hebrew University, Jerusalem)Google Scholar. It is, however, beyond the scope of this article to explore the source of this judicial phenomenon.

39 The Supreme Court put forward these views in response to a claim made by the employees that their representative organisation could not waive rights bestowed upon them by the arbitral decision under discussion, because sec. 20 of the Collective Agreements Law preempted such waiver. Plonim v. The National Labour Court and the State of Israel (1976) (III) 30 P.D. 382, 389.

40 The failure of the Supreme Court to make this all-important distinction by: (a) the Court's reliance on sec. 14, which enables the parties to terminate a collective agreement of indefinite duration, for support of the view that the parties to an agreement may ‘change’ it, and (b) the Court's posing of the policy problem as a choice between unlimited freedom to renegotiate and eternal immutability of the personal provisions even after the collective agreement lapses.

41 Nor is the distinction between varying or repealing personal provisions in current agreements and terminating the whole agreement in order to open new negotiations merely technical: see text supra at nn. 12 and 13.

42 See text supra at nn. 25, 26; see also Despax, , Conventions Collectives, in Camerlynck, , ed., Traité de Droit du Travail (Dalloz, 1966) 192Google Scholar. “Par transposition des principes applicables à la résiliation des contrats individuels de travail à durée déterminée, on doit admettre que la convention collective à durée déterminée peut cesser prématurément d'être applicable si d'un commun accord, les parties signataires décident de la résilier”.

43 Despax, Conventions Collectives, op. cit., 198; Durand, , Traité de Droit du Travail (Dalloz, 1956) 504.Google Scholar

44 See contra, Durand, , Traité de Droit du Travail, op. cit., 504Google Scholar; Durand regards the fixed term agreement in France as ensuring that determination of conditions is “temporary”, in contrast with statutory provisions which remain in force until repealed.

45 See supra n. 16.

46 Such preemption of pressure has been largely achieved on a theoretical level by a combination of statutory provision and labour court doctrine: see Raday, , “The Unprotected Strike” (1977) 12 Is. L.R. 86CrossRefGoogle Scholar. It seems from dicta of the National Labour Court that unilateral action by either party to modify agreed terms of the collective agreement will also probably not be effective: State of Israel v. Histadrut of Certified Engineers and Technicians (1973/74) 5 P.D.A. 197, 218–219: The Israel Ports Authority v. The Executive Council of the Histadrut and Others (1975/76) 7 P.D.A. 143, 154–155, 158. See also Morris, , The Developing Labour Law (The American Bar Association, Washington, 1971) 474–475.Google Scholar

47 See text supra at nn. 1, 2.

48 Durand, Traité de Droit du Travail, op. cit., 543–544.

49 Neumann, , “Allemagne”, in Droit du Travail, Jura Europae, (Beck Thurich, Editions Techniques Juris-Classeurs, Paris, 1974) vol. 1, 10.50–32, para. 95.Google Scholar

50 Durand, Traité de Droit du Travail, op. cit., 544.

51 Despax, Conventions Collectives, op. cit., 8–201.

52 Ibid., 200–201.

53 Secs. 19, 20.

54 Ashdod Port Committee of Maintenance Work Managers v. Israel Ports Authority (1971/72) 3 P.D.A. 60, 83.

55 See text supra at n. 11.

56 Bank Ozar Lehayal Ltd. v. Central Committee of Clerk's Histadrut and Beersheva Works Council (1970/71), 2 P.D.A. 260, 269.

57 Langan, , Maxwell on the Interpretation of Statutes (London, 12th ed., 1969) 215–220.Google Scholar

58 Cf. The refusal of the National Labour Court to accept the principle of non-retroactivity of collective agreements on the analogy of statutory interpretation, in Arad Chemical Industries Incorp. v. Elisha Peled and Moshe Azrie (1973/74) 5 P.D.A. 431, at 440; however, in that case (a) there was no retroactive derogation from employees' rights (b), the Court was interpreting the agreement itself and not the intention of the Legislature underlying the Collective Agreements Law.

59 Ashdod Port Committee of Maintenance Work Managers v. Israel Ports Authority (1971/72) 3 P.D.A. 63, 83.

60 E.g., Belulu v. Decade of Israeli Independence Institutions (1965) (II) 19 P.D. 689, 698–9. Mezid Machtavi and Others v. Eilat Pipe-Line Co. Incorp., (1971) (II) 25 P.D. 622, 629.

61 Shahad v. Dardikman, (1971) (II) 25 P.D. 182.

62 See also Arad Chemical Industries Incorp. v. Elisha feled and Moshe Azrìe (1973/74) 5 P.D.A. 431, at 440: referring specifically to the Ashdod Port case. The National Labour Court averred, “Questions associated with the retroactive effect of a collective agreement which derogates from employment conditions in a collective agreement which is still in force have not yet arisen for determination and they will require examination”. However it is not clear from the dicta whether the emphasis is on the continuing effect of the prior collective agreement or the distinction between waiver through failure to enforce rights and waiver through a subsequent agreement with retroactive effect.

63 The question whether the Works Committee was the appropriate organ of the employees' organisation to act on its behalf in this way was not raised in the decision itself: cf. Mekorot Water Co. v. Markovitch (1974/75) 6 P.D.A. 125, 134.

64 See Israel Ports Authority v. Antebbe (1972/73) 4 P.D.A., 449, 455.

65 “The possessor of the right may on occasion be prevented from claiming [its] enforcement”; note also the working of Dictum III from the Reuven and Shimeon case, in text supra at n. 30 where the employees' organisation's own right to enforce the personal provisions of the collective agreement is emphasised”.

66 Arad Chemical Industries Incorp. v. Stenzler (1975/76) 7 P.D.A. 271, 279. Dr. Ben-Israel interprets the Ashdod Port case itself as restricting retroactive waiver by the individual, A New Dimension in Collective Agreements, op. cit., at 87.

67 Shetreet and Others v. Maspenot Israel, Haifa Workers' Council (1972/73) 4 P.D.A. 337, 350.

68 Tel Aviv University and Others v. Academic Staff Organisation of Tel Aviv University and Others (1973/74) 5 P.D.A. 85, 96–101.

69 The existence of “collective” action which is not “organisational” has been expressly indicated by the National Labour Court in The Histadrut, General Federation of Labour in Israel v. Elko Ltd. (1976/1977) 8 P.D.A. 57, 74.Google Scholar

70 At 83.

71 Moshe Lustman v. Joseph Pearl (1973/74) 5 P.D.A. 184, 194–195.

72 Arad Chemical Industries Incorp. v. Elisha Pearl and Moshe Azrie (1973/74) 5 P.D.A. 431, 440.

73 Ibid., at 441.

74 Moshe Lustman v. Joseph Pearl (1973/74) 5 P.D.A. 184, while it appears from the reported facts that the later agreement contained some provisions which were disadvantageous to certain categories of employees, the issue did not arise explicitly in relation to the dispute before the Court.

75 “[Personal provisions] shall be regarded as a contract of employment between each employer and each employee to whom the agreement applies and shall have effect even after the expiration of die collective agreement, so long as they have not been validly varied or repealed”.

76 We would further argue that it cannot be regarded as “valid” under sec. 19 to repeal such terms by retroactive collective agreement after the work had already been performed.

77 Committee of Air Stewards, El Al and Others v. Edna Hazin (1972/73) 4 P.D.A. 436. In this case, the Court held that provisions in a collective agreement, which were discriminatory, on a sex basis, were contrary to public policy and hence invalid. The National Labour Court has indicated that it will use this power of review sparingly, see El Al, El Al Works Committee and Others v. Herut and Others (1976/77) 8 P.D.A. 197.

78 “…on n'a pas rencontré semble-t-il, de clauses imposant rétroactivement une nouvelle condition de validité du contrat de travail, ou supprimant un droit acquis par les salariés … Mais il paraît impossible d'admettre en droit français les propositions formulées par H.C. Nippedey selon lesquelles la rétroactivité ne peut entraîner la prohibition ou la nullité d'un acte, permis ou valable lorqu'il a été accompli. Et notre droit ne connaît aucune disposition, comparable à celle du paragr. 821 C. civ. allemand et tendant à la protection des droits acquis”. Durand, Traité de Droit du Travail, op. cit., 536.

79 See text supra at n. 4. It may be difficult to determine how far the collective agreement in fact bestowed rights upon the individual employee. In the case of Reuven and Shimeon itself the problem of finding of facts was an acute one. The employees claimed a right to sabbatical by virtue of collective agreements prior to 1964 and extented by agreements subsequent to 1964; the employer denied the existence of such a right and both sides referred the dispute to arbitration. The National Labour Court found that the dispute was an “economic dispute” but it is submitted with respect that, from the facts as they appear in the report of the case, it could as easily have been found that the dispute was as to interpretation of the earlier agreements between the parties and hence a “legal dispute” regarding the extent of the employee's vested rights.

80 Contracts (General Part) Law, 1973, sec. 27(a).

81 Contracts (General Part) Law, 1973, sec. 26.

82 In a rather different context from that of the discussion here, the National Labour Court has held that the employees' organisation is not competent to change pension conditions for an ex-employee who is on pension: State of Israel v. Wilhelm Rosenblatt (1973/74) 5 P.D.A. 42.

83 In the United States the only restriction imposed upon the employees' bargaining representative, in similar circumstances, would appear to be the duty to represent the employees fairly; this duty would seem not to extend to absolute protection of the individual employee's right to “earned income” but would only protect him against “hostile discrimination” or “irrelevant and insidious considerations: Morris, , The Developing Labor Law (Bureau of National Affairs, 1971) 743Google Scholar; Cox, , “Rights under a Labor Agreement” (1955–1956) 69 Harv. L. R. 601, 619, 630–638CrossRefGoogle Scholar. The approach suggested in the present article is, however, consonant with local labour law which, as has been judicially observed, places a different emphasis on the place of individual employees in the collective bargaining framework than that which exists in the American Labour law systems: see El Al, El Al Works Committee and Others v. Herut and Others (1976/77) 8 P.D.A. 197, 221, 222.

84 See text supra at n. 82.

85 Camerlynck, , “La clause de maintien des avantages acquis dans les conventions collectives” (1959) Droit Social 406, 411.Google Scholar

86 Ibid., at 407–409: there is indeed controversy as to whether the doctrine exists at all, in the absence of its activation by express clause in a collective agreement, except with regard to rights acquired by the employee individually by statute or in the context of his employment contract; see Durand, et Vitu, , Traité de droit du Travail, vol. III, Collectives, op. cit., at 321–323.Google Scholar

87 See text supra at n. 66.

88 See text supra at nn. 71–76.

89 Such retroactivity appears to be recognised in France: Durant, , Traité de Droit du Travail, op. cit., 534Google Scholar; and in Germany: Neumann, , “Allemagne” Droit du Travail in Jura Europae, op. cit., 10.Google Scholar 50–32, para. 93.

90 See, generally, on this topic, Rossiter, , Constitutional Dictatorship — Crisis Government in the Modern Democracies (Princeton Univ. Press, 1948, reprinted Harbinger Books, 1963)Google Scholar.