Tension mounts in hotels industry

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In summer 2004, bargaining over a new collective agreement for the Cypriot hotels industry has reached a deadlock, and the matter has been referred to mediation. The tense industrial relations climate has been exacerbated by allegations that many employers in the sector are systematically breaching the terms of collective agreement and labour law.

A period of industrial relations tension in the hotels industry came to a head in July 2004. There were two main causes: the difficulties involved in renewing the sectoral collective agreement; and alleged breaches of employees’ terms and conditions of employment by a large proportion of employers.

Renewal of agreement

On 30 March 2004, one day before the sectoral collective agreement for the hotels industry was due to expire, the Union of Hotel and Recreational Establishment Employees of Cyprus (SYXKA-PEO), affiliated to the Pancyprian Federation of Labour (PEO), and the Federation of Hotel Industry Employees (OUXEB-SEK), affiliated to the Cyprus Workers' Confederation (SEK), submitted a joint framework of trade union demands for renewal of the agreement for the next two years. The agreement covers around 16,000 workers.

On pay issues, except as regards the starting wages of new labour market entrants, the unions' demands are not generally considered to impose significant additional costs. On the former point, the unions are demanding a 7.5% wage increase for people who have entered the labour market since 1 July 2003, effective retroactively from 1 April 2004. The unions are also demanding that such wages be increased by the full general wage rise payable on 1 April 2005.

On non-pay issues, the most important demands pertain to staffing structure in hotels, workplace health and safety and the inclusion of new occupations in pay scales. Regarding personnel structure - a subject on which the employer side has expressed strong opposition, arguing that it falls within the scope of management prerogative - the unions recommend that the social partners discuss the issue for a specified time and then reach an agreement on determining the staffing structure in hotels on the basis of the number of beds, the nature of the public areas and the category in which the hotels are classed. If an employer intends to employ people in addition to the permanent staff to meet emergency needs, it should enter into dialogue with the trade unions before employing such staff. In the unions’ opinion, the existence of a specified staff structure will help avoid work intensification on the one hand and downgrading of services on the other, as the Cyprus Tourism Organisation’s current strategic plan also seeks to do on quality issues. In the same context, the abolition of skilled, high-cost jobs is regarded by the unions as an inhibitor to career advancement. Overall, the way the industry has operated in recent years, in conjunction with other factors such as seasonality and the increased insecurity it entails, are making the industry unattractive, it is argued.

As concerns workplace health and safety, the unions are demanding the establishment and operation of health and safety committees in hotels, based on the provisions of current legislation (CY0404102F). Finally, the unions are calling for the inclusion of new occupations, some of which are not present in all hotels, in the collective agreement's pay scales following an evaluation of the jobs involved, so as to provide a minimum of pay security. Such occupations include trainers, butlers, kindergarten teachers, public relations assistants and salespeople.

The demands of the employer side were jointly submitted on 31 March 2004 by the Pancyprian Association of Hoteliers (PASYXE) and the Association of Cyprus Tourist Enterprises (STEK). They consist mainly of a proposed package of changes to existing benefits such as annual paid leave, sick leave and compensation for work performed on public holidays. The employers are proposing a one-year term for future collective agreements in the industry, ending on 31 October each year.

The two trade unions have rejected any dialogue on the changes proposed by the employer side, on the grounds that their purpose is to reverse the gains achieved by workers. For their part, the employers reject almost all the demands submitted by the unions. Direct bargaining reached a deadlock as a result of this negative attitude om both sides. After four meetings held between 25 May and 23 June 2004, a labour dispute was declared, which on the request of the two unions was referred for mediation to the Industrial Relations Department of the Ministry of Labour and Social Insurance.

Alleged breaches

On 8 July 2004, a trade union demonstration was held in protest at alleged constant violations by employers of the hotel industry’s collective agreement, labour legislation and the overall terms and conditions of employment of Cypriot workers as well as immigrants from other EU Member States or third countries. For example, workers from elsewhere in the EU made allegations of poor treatment, lack of information from the employers’ side, and violations of basic human and trade union rights and freedoms, such as prohibitions of organising in unions. SYXKA-PEO and OUXEB-SEK claim that the use of individual employment contracts on terms less favourable than those of the collective agreement, intimidation, threats, work intensification, use of immigrants as a source of cheap labour, violation of basic human rights and some employers’ perceived complete lack of respect for employees are everyday phenomena aimed at upsetting labour relations in the industry. The trade unions hold the employers responsible for the quality of the sector's final product as well. Both unions believe that the quality of services provided is lower as a result of dismissals of technically trained staff, the subletting of parts of hotels to third parties in violation of legislation, and the non-existence of a training or pricing policy on the part of the employers. According to PEO and SEK, such violations in an industry as sensitive as the hotel industry both place industrial peace at risk, and jeopardise Cyprus’s reliability in implementing the 'acquis communautaire' (the body of EU law that new Member States must implement).

In this context, hotel workers' trade unions have sent resolutions to the Minister of Commerce, Industry and Tourism, the Minister of Labour and Social Insurance and the presidents of the relevant employers' associations. Their main demands include the following:

• faithful implementation of collective agreements and labour legislation;

• immediate 'codification' of the industry's collective agreement, an issue that has been outstanding for years, a delay that is blamed on employers;

• revision of the terms of service in hotels to bring them into line with the terms and conditions of employment currently in effect based on collective agreements and the legislation. A terms of service committee should begin operations and the employers’ representatives on the committee should be appointed immediately;

• joint action between the employers’ organisations and unions to combat effectively the establishment of 'yellow' (employer-dominated) unions, which will be injurious not only to the interests of the workers who join them, but also to the existence and credibility of the employers' organisations;

• immediate implementation of the legislation regarding the operation of hotels and tourist accommodation;

• upgrading of the services provided, by employing suitably trained staff and creating a staff structure in hotels;

• establishment of a 'tourism academy' for the continuing training and retraining of workers; and

• creation of a common pricing policy.

Commentary

Apparently, the initial objective of the social partners to renew the collective agreement in the hotel industry within a reasonably short period of time cannot be met. The two sides' diametrically opposed positions on the content of the new agreement are giving rise to serious questions as to whether an initial agreement is feasible, even at the mediation stage. Of decisive importance on the pay front are the two sides’ different interpretations of the term 'labour productivity', and in non-pay areas the intention of the employers’ side to reduce existing benefits is intensifying the climate of confrontation between the two sides, which has already been exacerbated to a great extent by constant violations of collective agreements and labour legislation. (Eva Soumeli, INEK/PEO)