Fading Corporatism: Israel's Labor Law and Industrial Relations in Transition

2. The Israeli Variant of Corporatism

2 The Israeli Variant of Corporatism 34 The study of Israeli law and industrial relations, which is presented in detail in the following chapters, advances the proposition that law and industrial relations were situated in a corporatist equilibrium, which gradually disintegrated, giving way to an emerging pluralist equilibrium. Labor law initially was designed to uphold, stabilize, and entrench the corporatist regime that developed in Israel from the pre-statehood period until the 1980s. Later, when the corporatist system started to disintegrate, labor law had to be rewritten to construct a new industrial relations system. The many changes in labor law are therefore embedded in social and economic institutions. Moreover, law played a role in constructing these institutions to begin with. While this book focuses mostly on the law, the explanatory framework for the discussion is the distinction between corporatism and pluralism The particular developments in law and industrial relations presented here have been chosen to illustrate this dichotomy. The legal and industrial relations systems are embedded in the historical, cultural, and economic features of Israel. It is therefore important to adapt the general and rather theoretical distinction between corporatism and pluralism to the Israeli reality. Arguably it is also necessary to justify the relevance of the distinction to Israel, as some have argued that Israel’s system in the past was never strictly corporatist (Shalev 1992; Grinberg 1991; Chermesh 1993), and it seems that any account of the present state of affairs, whether corporatist or pluralist, is likely to be even more controversial. This chapter is intended to provide a brief overview of the rise and fall of the Israeli corporatist regime.1 1. The task of presenting an industrial relations system is a difficult one, and it has been confronted in different ways by various textbooks and monographs, particularly those that present comparative overviews of systems (cf. Ferner and Hyman 1998; Visser and Russeveldt 1996). The analysis corresponds to some of the salient features of the corporatist/pluralist distinction that were presented in the previous chapter. It seeks to justify the relevance of the corporatist/pluralist framework and to describe the transition from corporatism to pluralism in the industrial relations system. However, as the presentation confirms, the Israeli case was not a paradigmatic example of corporatism, and at present it is not a classic representation of pluralism either. Like the discussion in chapter 1, the presentation here is split into two types of characteristics. In the first part I observe the institutions of the industrial relations system, with particular emphasis on the General Histadrut, around which the system as a whole evolved. In the second part I observe three salient areas in which corporatist partners are assumed to produce distinct policies— centralized collective bargaining at the national level with (almost) universal applicability, limited use of industrial action, and efforts to promote full employment and equality. In both parts, I show how the eradication of corporatist characteristics, warped as they were to begin with, led to the decline of the corporatist system. In the third part of this chapter I engage directly with the argument that the Israeli system was not corporatist, and while I agree with the critics, I still read their work and arguments as an affirmation of the chosen framework and as a guideline for the discussion that follows. The chapter concludes with a short summary of the explanations for the transition from corporatism to pluralism in Israel, opening the door to a broader discussion of the role of law in the transformation. From Corporatist to Pluralist Agents In Israel the industrial relations system represents the interests of three groups: labor, employers, and the state. Labor: To unfold the particularities of the Israeli variant of corporatism, it is necessary to start with the labor side of the triangle. Perhaps the most important and idiosyncratic feature of the Israeli system of industrial relations was the dominance of the General Histadrut. Commonly described as a federation of trade unions, the General Histadrut was actually constituted and later recognized by law as a primary organization from which trade unions evolved. However, the General Histadrut was much more than just a trade union—it was also the provider of many social services as well as an important political player. Although it was not the sole representative of labor, it was the dominant player in the past and remains so in the present, albeit to a lesser extent. Besides the General Histadrut, only a handful of trade unions participated...