The Tel Aviv Regional Labor Court blocked Walla from advancing planned layoffs and organizational changes before completing talks with the Union for Journalists in Israel, rejecting the company’s request to prevent the union from taking organizational action over the dispute.
In a decision issued on Wednesday, Senior Judge Kamel Abou Kaoud ruled that Walla had not fulfilled its duty to hold genuine consultations with the union before moving ahead with what the company described as an efficiency plan – a cost-cutting process that included restructuring parts of the company and reducing staff.
The decision explained that, in a unionized workplace, a company cannot move forward with layoffs and major structural changes before giving the workers’ representatives the information needed to understand the plan, question it, and suggest alternatives.
Should Walla still choose to pursue the plan, the court said, it must first complete the process set out in its collective agreement with the union. That includes providing relevant financial and organizational information, including the economic basis for the cuts, the savings the company seeks, the alternatives it considered, and the criteria used to decide which workers would be affected.
The dispute began after Walla informed the union in May, during discussions on another matter, that it intended to carry out an efficiency plan involving organizational changes and workforce reductions. The union asked for data that it said was necessary to understand the plan, its scope, and its justification, but the talks did not lead to agreement.
The dispute began in May when discussions discussed prospective layoffs and workplace changes
Walla argued that it had provided the information required at that stage and that other material was commercially sensitive. The union argued that the company had withheld essential information and was seeking to present workers with decisions that had already been made.
The court sided mainly with the union.
“Consultation is not tested by the number of meetings held, nor by the amount of time devoted to negotiations,” the court said. “The question is substantive: whether the workers’ organization was given a real opportunity to understand the basis on which the efficiency plan rests, examine its necessity and propose alternatives.”
The court said that question could not be answered in the affirmative.
According to the decision, Walla did not provide sufficient information about its economic condition, the size of the financial cut it sought to achieve, the expected savings from layoffs, the alternatives considered before deciding to reduce staff, or the criteria used to determine which workers would be affected.
Without those details, the court said, the union could not fulfill its role.
“One cannot propose an alternative without knowing the economic target the company seeks to achieve,” the decision said. “One cannot propose another mechanism for reducing expenses without knowing the scope of the savings sought.”
The court also rejected Walla’s attempt to separate the organizational restructuring from the layoffs, saying that the two were intertwined in practice. Even if a company can make structural changes as part of its managerial authority, the court said, those changes triggered the consultation mechanism because they were tied to workforce reductions and directly affected organized workers.
The ruling emphasized that employers generally have the authority to run their businesses, reorganize, and make cost-cutting decisions. But that authority is not unlimited in a unionized workplace. Where a collective agreement requires consultation before layoffs, the company must conduct a real process in good faith before making irreversible decisions.
The court also rejected Walla’s reliance on the collective agreement’s “industrial quiet” clause – a provision meant to prevent labor disruptions while the agreement is in force – to block union action.
Industrial quiet, the court said, is not a one-sided obligation imposed only on workers. It is part of a wider set of mutual commitments: the union is expected not to take disruptive action on matters covered by the agreement, while the company is expected to follow the agreement’s procedures, including consultation and disclosure of relevant information.
Accepting Walla’s position, the court said, would lead to a harsh result: an employer could refuse to provide information, advance a cost-cutting plan unilaterally, create irreversible facts on the ground, and at the same time prevent the union from using organizational tools to enforce the agreement.
Such an interpretation, the court said, would turn industrial quiet into a “one-way undertaking.”
A clear business justification for the efficiency plan must be presented
The court further noted that Walla had claimed a clear business justification for the efficiency plan, but had not presented the court with financial statements, forecasts, revenue-decline data, a savings target, alternatives considered, or the data used to draw up the list of affected workers.
The panel acknowledged that some of the information sought may be commercially sensitive, but said that did not erase Walla’s obligation to provide relevant information. The parties may use confidentiality mechanisms, including professional representatives, to protect sensitive material, the court said.
However, the court rejected the idea that Walla could show the data only to a financial expert on behalf of the union, who would then relay only general conclusions. The right to consultation belongs to the workers’ organization itself, the court said, not to an accountant or outside expert acting in its place.
The court therefore ordered Walla to refrain, at this stage, from making or implementing irreversible decisions regarding layoffs, organizational changes, or other parts of the efficiency plan until the consultation process is completed.
The parties were ordered to continue talks in good faith. If they failed to reach an agreement within 30 days from service of the decision, then either side may return to court.
A hearing in the main proceeding was set for August 25.