SAP Israel is “playing with fire” in move against collective agreements

In late February, SAP Israel notified employees that it intends to withdraw unilaterally from all existing collective agreements. In a letter signed by SAP Israel Managing Director Ofer Milavski, SAP Labs Israel Managing Director Orna Kleinmann, and HR Director Moran Melamuod, management announced the suspension of the agreed voluntary retirement programme and the launch of a 60‑day process to terminate the collective agreements in order to negotiate what it described as “a new contractual framework” that would “support evolving business needs and enable greater managerial flexibility.”

The Histadrut condemned the move immediately. Yaki Halutzi, Chairman of the Union of Cellular, Internet, and High-Tech Workers, told Davar that the decision represents a serious breach of labour standards: “SAP’s Israeli management is playing with fire,” he said, warning that the unilateral step is both unlawful and harmful to the workforce. He added that the implications extend far beyond a single company, noting that unilateral cancellation of collective agreements threatens the stability of organised labour across the country.

More than a decade of unionisation

Unionisation at SAP Israel began in 2014, at a time when the notion of collective representation in high tech was still met with high scepticism. Aside from major defence companies such as Israel Aerospace Industries and Elbit Systems, very few tech workplaces had organised, and even large employers like Amdocs failed to establish a representative workers’ committee.

The first collective agreement at SAP, signed in 2017, introduced transparent mechanisms for dismissals, strengthened employment security and provided structured voluntary‑retirement programmes as an alternative to forced layoffs. Mechanisms that were later renewed in subsequent agreements.

In an interview with The Marker, Halutzi said there is a sort of shared destiny in unionisation among management, the workers’ committee, and the union in global companies such as SAP. Competition between countries over R&D investments, site size, and budgets often puts local management under pressure. Therefore, achievements gained through collective bargaining benefit both employees and management by stabilising operations and preventing the relocation of projects abroad. “There are many cases where we saved projects and prevented their transfer to Eastern Europe or China.”

A shifting power balance in the tech industry

The shift from an “employees’ market” to an “employers’ market” in the industry has exposed vulnerabilities that were previously overlooked. In response to a question from The Marker, Yaki Halutzi explained that there is a common belief among tech workers that they do not need to unionise, evidenced by the large parts of this sector that are not organised. But high‑tech employees are not different to other salaried workers.

In the end, says Halutzi, “we all receive a paycheck and pay our mortgage. Even if the salary is high, there is still an employer above you, and there are market fluctuations and competing interests. That perception changes when the market shifts, as it has now, from an employees’ market to an employers’ market, with waves of layoffs and fear. After such volatility, more workers want to organise, and in this period we are indeed receiving many inquiries from employees at major high‑tech companies.”

Escalating dispute amidst national crisis

The company’s notice that it will withdraw from the collective agreements represents a sharp departure from nearly a decade of structured labour relations. Just a few days later, Israel entered a wartime emergency that brought much of the economy to an abrupt halt. SAP’s suspension of the voluntary retirement plan and its attempt to introduce a new contractual framework outside the existing agreements place additional strain and uncertainty on workers.

For the Histadrut, this is unacceptable. The Union of Cellular, Internet, and High-Tech Workers is prepared to escalate if necessary, including declaring an official labour dispute, a step that would legally permit strikes and public demonstrations. While emphasising that the union prefers dialogue, Halutzi prefers that negotiations must take place without unilateral threats from the employer.

For now, we are holding ourselves back from taking action, as there is also a war going on. But they already understand the kind of public outcry their step has triggered. We are striving for dialogue, but not with a sword hanging over our heads. If they do not withdraw their request to cancel the collective agreement, we will declare a labour dispute, which also allows us to declare a strike, and we will hold demonstrations outside Orna Kleinmann’s home. My message is this: if you want to talk, we will talk without guns on the table. Because if you put yours there, we will put ours as well.

Yaki Halutzi, Chairman of the Union of Cellular, Internet, and High-Tech Workers

The Histadrut’s stand at SAP is more than a local dispute. It is part of a wider struggle to protect collective bargaining as a cornerstone of democratic labour relations in a rapidly evolving industry here and worldwide. As the tech sector continues to reshape itself, the need for strong, independent worker representation has never been more urgent. The Histadrut remains firmly committed to defending these rights, for SAP workers and for all workers whose protections are at risk.

Information for this article was taken from a Davar article and from a The Marker article.