Zim Employees Return to Work as Union Reports Tentative Agreements
The union representing Zim’s Israeli workers has reportedly reached terms on a tentative agreement regarding employment, severance payments, and compensation after staging a strike that stopped port activity and work at the company’s headquarters. The union said a tentative agreement would be finalized between ZIM CEO and Hapag-Lloyd, and according to the news outlet Calcalist, it has total trust in Eli Glickman to honor the agreement.
The union had reacted to a lack of employment agreements and said it had not been consulted during the final phase of the negotiations. It asserted that of approximately 1,000 employees in Israel, only 120 would retain their jobs and that there was no consideration for the employees in the merger agreement. Last week, an initial strike of office workers had reportedly spread to Zim’s facilities in Haifa, Holon, and Ashdod. Media reports said the union was intent on barring Zim Chairman Yair Seroussi from entering the company’s facilities.
According to the report in Calcalist, Glickman and the unions agreed to terms that, in addition to the 120 employees to stay with the new ZIM owned by Israeli private investment firm FIMI, an additional 400 people will move to the Israeli headquarters that Hapag-Lloyd plans to establish.
Workers’ union chairman Oren Caspi and CEO Glickman also reached an understanding on several other key elements, reports Calcalist. Hapag-Lloyd is expected to allocate at least $300 million to finance severance payments for approximately 500 employees who will retire as part of the transaction, reports Calcalist. Employees will also receive a sale-related bonus, although its amount has yet to be determined, the outlet says, but the union will insist that the people moving to Hapag are permitted to first retire from Zim. The understanding they write also includes extending the collective agreement for an additional five years.
Employees began returning to work on Tuesday in Israel, while the report says Glickman will finalize the agreements with Hapag-Lloyd on Wednesday. Hapag had previously said it expected to provide for the Zim employees once the deal closed.
It removes one key sticking point in the lead-up to the completion of the merger agreement. However, as reported in the Israeli media, concerns are being raised about maintaining Zim as a national symbol and its ability to meet the terms of the Golden Share provided to the government. Zim has been viewed as a national asset critical to maintaining supplies during a time of war and for Israel’s survival.
FIMI CEO Ishay Davidi, however, asserted during government presentations on Sunday that the new company will be much stronger financially. He said it would be fully able to meet its obligations to Israel. He pointed out that Zim, in its 80-year history, has twice faced bankruptcy and has not been meeting the terms of the Golden Share.
Davidi has said the new company will have a modern fleet of 16 ships, no debt, and $700 million in equity, making it a strong player. He said it has FIMI’s assurances that it will meet the requirements of the Golden Share.
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Hapag-Lloyd and FIMI need to receive approval from Israel’s Companies Authority, which administers the Golden Share. Calcalist reports the authority has already raised questions about the viability of the new Zim, which it says would be dependent on Hapag and international relationships. Members of the Israeli Knesset (parliament) reportedly also were skeptical during Sunday’s presentation to the Economic Committee.
Zim reports it is preparing its full presentation, which will be presented to the government, for approval of the sale. Hapag said when it announced the agreement that it expected the necessary approvals of regulatory authorities and ZIM shareholders by late 2026.
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