Arab Bank continues operations in Cyprus after agreement with trade unions

In November 2005, after agreement with trade unions, Arab Bank has finally decided to retain part of its business in Cyprus, by dismissing a total of 60 employees.

After almost two months of difficult negotiations, the Arab Bank and the Cyprus Union of Bank Employees (ETYK), managed to reach an agreement that recalls the former’s decision to cease operations in Cyprus and dismiss its 176 employees (CY0510101N).

Specifically, on 31 October 2005, the majority (100 employees) of the employees in Arab Bank voted in favour of the agreement reached between ETYK and the management of Arab Bank. According to the content of the new agreement, the bank decided to reduce dismissals from a total of 68 employees down to 60 employees. As far as the severance pay is concerned, actually the main cause of dispute between the bank and ETYK, the bank agreed to pay compensation in the range of CYP 2.5 million, representing 8-week pay for each year of service of the 60 desmissed employees, over and above the compensation from the Redundancy Fund and based on the procedures provided for collective dismissals. The bank has also accepted the term for a minimum compensation sum of CYP 15,000.

It should be noted that the new agreement will be in effect retroactively from 1 November 2005.

Although the content of the new agreement differs from ETYK’s initial demands (CY0510101N) failure to achieve agreement would have had extremely negative results on employment, especially in view of the fact that Cyprus is recently facing a growing number of restructuring cases followed by collective dismissals.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.