Discount Bank last night announced the new and surprising employee agreement. Instead of regularity – bonuses. They have all the details:
Following on from the report of the third quarter of 2021 (p. 191), regarding negotiations with the workers’ representatives, the Bank is honored to report that on December 23, 2021, a special collective agreement was signed between the Bank and the workers’ committee and the new General Workers’ Union. Extension of the validity of the Labor Constitution and industrial silence for five years. In addition, special collective agreements were signed regarding wages and grants for three years, regarding the transfer of the Bank’s headquarters and other units to the Discount Campus
The validity of the Labor Constitution has been extended until December 31, 2026, subject to changes, the main one of which is the conversion of workers from a “temporary” status to a “stable” status. The employment in an employee’s bank with “stable” status will be indefinite in time, and may be terminated by the bank in accordance with the provisions of the law. Workers in “stable” status will be unionized, but will not be subject to the Labor Constitution and all collective agreements and arrangements, except for certain collective agreements. The number of stable employees shall not exceed 2,000 at any given time within a period of ten years from the date of signing the agreements. The bank undertook to convert 300 employees to “full-time” status by the end of this period. Additional changes to the labor constitution were also agreed upon, including the employment of department managers in personal contracts and improved mechanisms for the mobility of employees.
The transfer of employees of the Bank’s headquarters and other relevant units to the Discount Campus has been arranged.
Arrangements were made for remote work one day a week.
Salaries and grants for the years 2024-2022:
For employees at the clerical level, starting from the July 2023 salary, an average monthly salary increase of NIS 1,350 gross per employee for the years 2024-2022 will be paid.
Employees at the managerial level will be paid a salary increase at an average rate of 3% per employee and no more than a total cost of NIS 10 million per year for all employees, for each of the years 2024-2022.
Employees in “stable” status will be paid a wage increase at an average rate of 2.66% per employee, for each of the years 2024-2022, and at a total cumulative rate of no more than 8% for the entire period.
Annual bonus conditional return – The bank will pay employees for each of the years 2024-2022, an annual bonus conditional on the amount of the annual return on capital. The bonus levels have been adjusted to improve the Bank’s performance in such a way that compared to the previous wage agreement, a higher return will be required at each bonus level. Thus, for example, with a return of 10%, one salary will be paid less compared to the previous wage agreement, and in order to receive a maximum bonus, a return of 14% or more is required.
Consent Grant for Moving to Campus During 2022, the Bank will pay employees who worked at the Bank on the day of signing the agreement a one-time grant for agreeing to move to the Discount Campus and the changes involved in this transfer in the total amount of NIS 90 million (before the tax effect).
Grants for the changes agreed in the Labor Constitution
– For changes agreed between the parties in the agreement to extend the validity of the Labor Constitution, employees at the clerical level who worked at the bank at the time of signing the agreement in the “full” status will be paid a one-time grant in the total amount of NIS 100 million (before tax effect).Employees at the management level will be paid a one-time grant depending on the return on capital, which will be paid subject to an annual return of 10% in the previous year and the total cost not to exceed NIS 8 million per year for all employees at this level in each of 2024-2022.
Grant for branch employees – During 2022, the Bank will pay the employees of the branches an additional one-time grant with a total cost of NIS 10 million (before the tax effect).
The new wage outline reflects a wage increase at an average annual rate, which is not materially different from the wage outline under the previous wage agreement. At the same time, a decrease in the volume of bonus payments is expected to depend on yield so that total wage expenses are not expected to change materially.
The Bank’s management estimates that the agreements will not have a material effect on the Bank’s profits in the years 2022-2024. The financial statements as of December 31, 2021 will require a provision for one-time grants in the amount of NIS 200 million (before the tax effect). , A provision in the amount of approximately NIS 50 million has already been registered, and therefore in the fourth quarter an additional provision in the amount of approximately NIS 150 million (before the tax effect) will be included.
The above includes, among other things, assessments by the Bank’s management that are forward-looking information. The aforesaid reflects the assessment of the Bank’s management, taking into account the information in its possession and the plans that exist at the time of preparation of the report. This may not materialize in the event of material changes in the size of the employee population or in composition, in the starting salary levels of new employees due to the state of the labor market, or in the Bank’s profitability.
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