Courts in Conflict over Decision to Liquidate El Al

Two courts were in conflict today over a shareholders’ decision to liquidate El Al, the country’s national airline. A labor court here is expected to rule tomorrow on an appeal by the airline workers against the liquidation decision But the shareholders have already asked a district court for a liquidation order. The government owns 98 percent of El Al stock.

The legal dispute is whether the district court can issue the liquidation order while the labor court is considering the employes and Histadrut’s appeal against it. The Attorney General’s office contended yesterday that the labor court has no jurisdiction in liquidation matters and a clash between the two courts would be contrary to the public interest.

The shareholders, chiefly government proxies, decided last week to wind up the money-losing carrier and place it in the hands of a receiver. The Cabinet is expected to endorse that recommendation. The workers accused the shareholders and management of acting in bad faith. They pointed out that new labor agreements had been reached with all of the El Al workers groups except the pilots and that negotiations should have continued.

The labor court issued a 24-hour restraining injunction Friday and called on management to use the time to try to complete a new labor contract. But the order only delayed the liquidation request which was filed with the district court yesterday. Angry workers marched on Herut party headquarters here today to demonstrate against Finance Minister Yoram Aridor who was expected to speak there tonight.

Re-enforced police units surrounded the building to prevent the workers from entering or disrupting traffic. Gaby Saltzman, a spokesman for the El Al employes. said they were demonstrating “against Begin’s Likud government which wants to liquidate the national airline.”

ISSUE OF EL AL DEBTS

Meanwhile, the Transport Ministry has informed the International Air Transport Association (IATA) of which El Al is a member, that the government will be responsible for all El Al debts owed to member airlines. Israeli and foreign banks announced today that they will no longer accept El Al checks. They said they must study the scope and amount of El Al indebtedness to local banks which is said to amount to $180 million. Other complications arose.

El Al workers shut down Ben Gurion Airport over the weekend, affecting II incoming and nine outgoing flights. Foreign airlines cancelled some flights and reschedules others. The SITA communications network, a computerized network linking all international air carriers, became inoperable when police cut off electricity to the El Al offices at the airport. The system was functioning again today however after a limited number of striking workers were called back by court order.

In another development, the Israel Pilots Association appealed to El Al pilots today not to agree to management demands to work longer hours in the cockpit. The Association noted that this would endanger aircraft safety and was a violation of standards fixed by international aviation experts and flight surgeons. The El Al management has insisted that pilots agree to 16-hour shifts.