Cyprus: Latest developments in working life Q1 2019

A 24-hour strike by construction workers, a dispute about the admission of third-country nationals into the hotel industry and the involvement of social partners in the European Semester are the main topics of interest in this article. This country update reports on the latest developments in working life in Cyprus in the first quarter of2019 .

Construction industry workers walk out

On 13 February, more than 15,000 workers in the construction industry took part in a 24-hour work strike. The strike was in response to the fact that, in October 2018, the Federation of Building Contractors’ Associations of Cyprus (OSEOK) withdrew from the ‘special agreements’ it had previously signed with the sectoral trade unions (the Pancyprian Federation of Labour (PEO), the Cyprus Workers’ Confederation (SEK) and the Democratic Labour Federation of Cyprus (DEOK)). The special agreements provide for the renewal of the collective agreement, which has been pending since 2013 due to the economic crisis, and the legal regulation of the fundamental rights of workers.

The Secretary General of PEO, Michalis Papanikolaou, stated during the strike that OSEOK was not really seeking an agreement, but instead wanted to maintain a stalemate that would eventually cause the collective agreement to be repealed. He also said that the workers would never abandon their efforts to ensure that the provisions of the collective agreement were implemented by all contractors. The trade unions announced that they were likely to escalate their actions in the near future if the dispute is not resolved.

OSEOK condemned the strike and called on the trade unions to return to the negotiating table. The federation declared its readiness to continue dialogue on renewing the collective agreement, but refrained from taking a position in relation to the special agreements.

A crucial meeting has been set up for 15 April in an attempt to resolve the dispute. This meeting will include all stakeholders, as well as the Minister of Labour, Welfare and Social Insurance.

Concern over deregulation of industrial relations in the hotel sector

In Q1 2019, the Cyprus Hotel Association (PASYXE) and the Association of Tourist Enterprises (STEK) asked the government to permit the free employment of third-country nationals in the hotel industry. This request sparked a new round of conflict with the sectoral trade unions: the Union of Hotel and Recreational Establishment Employees of Cyprus (SYXKA-PEO) and the Hotel, Catering and Restaurant Employees Federation (OEXEKA-SEK).

The employer organisations justified their request by referring to staff shortages in hotels and the lack of interest that native workers have shown in entering the industry.

SYXKA-PEO and OEXEKA-SEK believe that the free admission of third-country nationals into the industry will contribute to the deregulation of industrial relations, since employers sometimes offer employment terms and wages for such nationals that are worse than those provided for in the collective agreement. The Secretary General of SYXKA-PEO, Lefteris Georgiades, stated that the request from the employer organisations was unreasonable because 30,000 native workers are currently unemployed. He pointed out that the lack of interest from native workers in the industry is due to poor working conditions, the violation of collective agreements by a large percentage of hoteliers, low wages and exploitation.

Hotel sector collective bargaining begins

Trade unions and employer organisations in the hotel industry also began negotiating the renewal of the collective agreement in the sector, which has been pending since December 2018. The employer organisations presented the following demands:

  • the restoration of all working benefits and rights granted in 2013
  • pay increases for all employees and the inclusion of a pay scale
  • the introduction of a thirteenth month’s salary
  • the introduction of a welfare fund

If stakeholders do not reach an agreement by mid-May, the mediation services of the Ministry of Labour, Welfare and Social Insurance will take the lead in the process. The trade unions stated that they are ready to take industrial action if an agreement cannot be reached.

Trade unions meet with tourism minister

On 22 February, the Secretary Generals of PEO (Pambis Kyritsis) and SYXKA-PEO (Lefteris Georgiades) met with the newly appointed Deputy Minister of Tourism, Savvas Perdios. They submitted a memo explaining the positions of their unions with regards to the current problems faced by the hotel industry. The topics discussed included the admission of third-country nationals into the industry and the need to regulate the implementation of collective agreements through legislative means.

Involvement of social partners in the European Semester

Local social partners met with the European Commission on 2 April, following the publication of Cyprus’s country report on 27 February. Trade unions believe that the report confirms the threat posed by inequality and deregulation within the labour market, particularly for the younger generation. However, employer organisations believe that the findings correspond to the problem of reforming the labour market and the economy as a whole.

Some of the social partners believe that the following points should be also underlined in the Cypriot report.

  • After three years of cyclical growth, real wage increases remain limited although unemployment is now at a low level.
  • There have been limited improvements in labour market conditions, despite prolonged economic growth.
  • Although poverty and material deprivation indices have improved, they remain at higher levels than in 2008.
  • The quality of working conditions, according to the European Trade Union Institute’s job quality index, were worst in Cyprus in 2015 compared to other EU Member States.

Commentary

The disputes in the construction and hotel industries – two of the largest sectors of the labour market in Cyprus – are the result of deep-rooted discontent. Given that the positions of the stakeholders are sufficiently different, and that the problems in both industries have been persisting for a long time, it is unlikely that an agreement will be reached in the near future. Further strike action may therefore take place.

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