Unions condemn report findings on low-paid work

In March 2007, the Statistical Service of Cyprus published survey findings on the earnings of workers in the five occupations that are paid on the basis of the national minimum wage, as well as in another three occupations. The results have sparked strong reactions from the trade union movement, both with regard to the violation of existing legislation on minimum pay and also in terms of the failure to provide basic benefits to workers in selected occupations.

Survey on earnings

On 23 March 2007, the Statistical Service of Cyprus (Στατιστική Υπηρεσία της Κυπριακής Δημοκρατίας, CYSTAT) published the conclusions of a special survey on the pay of workers in eight selected occupations. Unlike the two previous surveys held in 1987 and 1991, the 2006 survey was extended to include the occupations of caregiver, cleaner and guard in private companies, which are not covered by the existing legislation on minimum pay. These three occupations were chosen in addition to the five occupations paid on the basis of the national minimum wage: shop assistant, office clerk, nursing assistant, day care assistant, and nursery and school assistant (see the Cypriot contribution (55Kb MS Word doc) to the EIRO comparative study on Minimum wages in Europe).

The purpose of the survey, which was conducted in May 2006 and completed in December 2006, was to study and determine the rate and structure of salaries and wages in the eight aforementioned occupations. The survey was carried out on the recommendation of the Department of Labour Relations (Τμήμα Εργασιακών Σχέσεων) of the Ministry of Labour and Social Insurance (Υπουργείου Εργασίας και Κοινωνικών Ασφαλίσεων, MLSI), with a view to revising national minimum wages. The issues covered by the survey were decided on by the tripartite committee of the Industrial Advisory Body, which comprises representatives of the MLSI, the employer organisations and the trade unions.

When selecting the survey sample, information on employees’ nationality was requested, in order to compare the terms and conditions of employment of Cypriot employees and employees from EU Member States and other countries. The sample, which focuses on the private sector only, was based on the 2005 Census of Establishments carried out by CYSTAT. In all occupations except that of cleaner, the workers surveyed were employed at least 30 hours a week. Since a substantial number of cleaners work fewer than 30 hours a week, the survey covers all of these employees in the selected companies, but data on their pay have been converted into hourly earnings rather than being broken down on a monthly basis.

Distribution of wages

The survey findings show that 16% of all employees in the five occupations paid on the basis of the national minimum wage receive a monthly salary of less than CYP 384 (€656 as at 20 July 2007). The latter amount is the minimum wage set in the most recent decree, which came into effect on 1 April 2006 (Regulatory Administrative Act 271/2006). By occupation, 39% of nursery and school assistants, 16% of sales staff, 11% of nursing assistants and 10% of office clerks receive less than the national minimum wage. As far as the three new occupations not covered by the existing legislation are concerned, the figures are 37% for caregivers, 36% for cleaners and 31% for guards.

Classified by sex, in the occupations where there is a large concentration of both men and women, a significant wage gap was noted at the expense of women: wage differences are greatest among sales staff, where salesmen’s pay is 55% higher than saleswomen’s. For office clerks, the difference is 20%, while the smallest gap is seen in the occupation of guard, where men’s pay is only 5% higher than that of women. Caregiver and cleaner are considered to be predominantly women’s occupations, which is why in Greek they are referred to in the feminine gender.

Working time and basic benefits

The survey found that the adverse treatment of workers in the occupations under examination also involves basic terms and conditions of the employment relationship other than wages – that is, mainly working time and annual leave. Specifically, apart from school and nursery school assistants, whose average working week is 35.6 hours, the average working week for sales staff, nursing assistants and caregivers ranges between 40 and 41 hours. Guards work the longest hours: for 74% of such workers, the average working week is 46.2 hours and, for the remaining 26%, it is over 55 hours. The minimum statutory annual leave of 20 days is violated only in the case of cleaners, whose average annual paid leave is 18 days.

The results of the survey regarding basic benefits are also pessimistic, specifically with regard to the cost-of-living allowance, the 13th month’s salary and the Provident Fund. Particularly worrying is the fact that 57% of the people employed in the occupations under examination are not covered by any healthcare scheme. When comparing Cypriot workers with those from other EU and non-EU countries, the situation is different depending on the type of benefit. For example, 38% of Cypriots receive the cost-of-living allowance, whereas for EU citizens the proportion is 19% and for workers from other countries it is 30%. Similarly, 40% of Cypriots contribute to the Provident Fund, while for EU citizens the figure is 32% and for workers from other countries it is 25%.

Finally, the majority of people employed in the occupations under examination are not covered by a collective agreement, a fact which in part explains the even worse terms and conditions of employment of workers in those occupations where the coverage is lowest.

Trade union reactions

The findings of the CYSTAT survey sparked strong reactions from the trade union movement. The three largest union organisations made statements in which they reiterated their longstanding positions on the problem of violation of the existing labour legislation, as well as the more general exploitation of a large proportion of workers. The three unions concerned are the Democratic Labour Federation of Cyprus (Δημοκρατική Εργατική Ομοσπονδία Κύπρου, DΕΟΚ), the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, PΕΟ) and the Cyprus Workers’ Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, SΕΚ).

Notably, DEOK stated that the decree on minimum wages must be extended in two key directions:

• to cover all occupations in all sectors of the economy where there is no industry-wide or enterprise-level agreement specifying terms and conditions of employment;

• to include other minimum terms and conditions of employment and basic benefits, such as payment of the cost-of-living allowance, the 13th month’s salary and paid sick leave.

In addition, DEOK states that dialogue must begin at once on the statutory regulation and modernisation of industrial relations, based on the proposals that the unions have submitted to MLSI (CY0602104F, CY0607019I). As regards the national objective of increasing the minimum wage to 50% of the median wage by 2008 (CY0405101N), DEOK has reiterated its view that minimum pay should be increased by 10% a year until it reaches 60% of the median wage, so that no worker earns wages below the poverty line.

PEO made statements along the same lines, and appealed to all workers covered by the decree on minimum wages to lodge complaints with the labour inspectors about their employers’ violations. Finally, SEK focused on the pay gap between women and men and, like the other organisations, emphasised the need for immediate, full application of the principle of gender equality.

Commentary

The publication of the survey findings comes at a time of heightened interest in the question of low-paid work in general. The latest Economic and Employment Outlook of the Cyprus Institute of Labour (Ινστιτούτο Εργασίας Κύπρου, INEK), the results of which were presented on 26 March 2007 (CY0704019I), underlines that the growth of the Cypriot economy in 2004–2006 had its basis in cheap labour. Moreover, the interim results of INEK’s ongoing study on Wages in Cyprus: Determining factors and pay inequalities (CY0704059I) show that 25% of wage earners in the economy as a whole are defined as low paid.

In this context, the trade union movement has focused its activity on immediately and effectively addressing the problem of violation of the existing labour legislation and also of the more general exploitation of a large proportion of workers, by bringing poverty and low-paid work to the fore as questions of major importance. The government is already making some efforts towards the better protection of workers: a law on the protection of wages was brought into effect on 21 March 2007, and plans to harmonise existing legislation should allow for more effective monitoring by labour inspectors (CY0704069I).

Eva Soumeli, Cyprus Institute of Labour (INEK/PEO)