The Bat Yam Regional Labour Court in Tel Aviv has permitted El Al Israel Airlines (LY, Tel Aviv Ben Gurion) to withdraw ILS105 million shekels (USD30 million) from the pension fund that the state set up for the company's employees, the financial newspaper Globes has reported.
El Al had wanted to withdraw ILS115 million (USD32.7 million) from the fund, which holds a total of ILS516 million (USD32.9 million), describing the cash as "vital oxygen" as it struggles against the effects of the coronavirus pandemic.
The fund was established when El Al was privatised in 2003, but most of the individuals it was intended for have already retired or departed for other jobs.
Around 250 eligible employees remain but the money they are entitled to, about ILS60 million (USD17 million), had previously been put into personal funds for them.
Both the Ministry of Finance and the Histadrut, Israel's powerful central trade union, approved the withdrawal following negotiations between the three sides, but El Al's employees opposed it.
The Histadrut promised that the money would be used to pay salaries to those 700 employees who are currently still working. In March, El Al said it would place 80% of its 6,300 employees on unpaid leave.
The union also suggested that the remaining NIS10 million (USD2.8 million) be used for severance pay to employees who will be laid off in cost cuts that are a condition for obtaining a state-guaranteed loan.
The labour court ruled that El Al and its employees should work together on a recovery plan.
