Adalah to Labor Minister: Aged-Based Pension Insurance Discriminates Against Arab Citizens, Ultra-Orthodox Jews and the Disabled
On 2 March 2008, Adalah sent a letter to the Minister of Industry, Trade and Labor, Eli Yishai, the Director of the Coordinating Bureau of the Economic Organizations, Shlomo Neuman, and the Chairman of the New Histadrut General Federation of Labor, Ofer Eini, demanding the extension to all employees aged 18 and above, men and women alike, mandatory pension insurance. In the letter, Adalah Attorney Sawsan Zaher stressed that the application of the collective labor agreement not be limited to women employees who are 20 years old and over and to male employees who are 21 years old and over.
The agreement to institute mandatory pension insurance was signed on 19 November 2007 and entered into effect on 1 January 2008. The agreement, the full title of which is “General Collective (Framework) for Comprehensive Pension Insurance in the Economy,” requires every employer to provide pension insurance for his or her employees. According to the agreement, the employer must allocate a percentage of the employee’s wages for pension insurance purposes, or an amount equal to the average wage in the economy, whichever is lower. During the first year, 2.5% of the
employee’s wages will be allocated for pension insurance. The rate of the allocation will grow over the following five years until it reaches 15% of the employee’s wages. However, the requirement for pension insurance will not apply to women under the age of 20 or to men under the age of 21.
Adalah argued instituting mandatory pension insurance is an essential step to enabling the worker to continue to enjoy the standard of living to which he or she has become accustomed prior to retirement. The requirement of pension insurance is all the more important in light of the fact that most poorly paid workers do not have pension insurance and the standard of living of many workers declines drastically after retirement. Thus, the selective application of the pension insurance requirement to cover only those who are at least 20 years old (women) or 21 (men) discriminates against any worker under these ages. The result is that these workers do not enjoy pension insurance and are prevented from receiving the same social conditions their colleagues are entitled to receive, solely on the basis of their age. This discrimination is contrary to the directives of the Equal Employment Opportunities Law (1988), which prohibits discrimination on the basis of age with regard to labor conditions provided to workers.
Pension insurance must apply to all workers from the starting date of his or her work, regardless of age. This also is true as regards payment and/or allocations of other social benefits, such as recuperation pay and annual leave.
In addition, the collective agreement wrongfully distinguishes between the ages of workers according to gender: as mentioned above, the pension insurance requirement applies to women from the age of 20 and to men from the age of 21.
Adalah also argued that this issue will only affect workers who are able to enter the job market at age 18. This group primarily comprises Arab citizens of Israel, ultra-Orthodox Jews and people with disabilities, the majority of whom do not serve in the army and, therefore more likely to enter the job market at the age of 18. Conversely, most employees who will not be adversely impacted belong to the non-ultra-Orthodox Jewish population, which serves in the army between the ages of 18 and 20 (in the case of women) or 21 (in the case of men).
