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Working life in Cyprus

Cyprus

This profile describes the key characteristics of working life in Cyprus. It aims to provide the relevant background information on the structures, institutions, actors and relevant regulations regarding working life.

This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work. The profiles are systematically updated every two years.

 

2012

2022

Percentage (point) change, 2012–2022

Cyprus

EU27

Cyprus

EU27

Cyprus

EU27

GDP per capita

21,840

25,110

27,490

28,950

25.87%

15.29%

Unemployment rate – total

11.9

11.1

6.8

6.2

-5.1

-4.9

Unemployment rate women

11.1

11.2

7.7

6.5

-3.4

-4.7

Unemployment rate men

12.6

11.0

6

5.9

-6.6

-5.1

Unemployment rate youth

27.7

24.4

18.6

14.5

-9.1

-9.9

Employment rate – total

73.5

70.4

78.2

74.5

4.7

4.1

Employment rate women

66.9

64.5

73

69.5

6.1

5

Employment rate men

80.7

76.4

83.7

79.4

3.0

3.0

Employment rate youth

38.9

40.1

42.3

40.7

3.4

0.6

Notes: Values for real GDP per capita are chain-linked volumes (based on 2010 data; €). The unemployment rate for men and women is the annual average as a percentage of the active population aged 15–74 years, and the youth unemployment rate is the annual average as a percentage of people aged 15–24 years. The employment rate for men and women is the annual average as a percentage of the active population aged 15–64 years, and the youth employment rate is the annual average as a percentage of people aged 15–24 years. GDP, gross domestic product.

Sources: Eurostat [sdg_08_10], for real GDP per capita and percentage change 2012–2022; [une_rt_a], for unemployment rate by sex and age; [lfsi_emp_a], for employment rate by sex and age.

Economic and labour market context

In 2021, Cyprus’s economy once again began to experience rates of growth: gross domestic product (GDP) per capita increased by 10.5%, which was significantly above the EU27 average for that year. Similar to the rest of the EU, unemployment fell by 0.1%, although the unemployment rate of women (which decreased during the pandemic) increased by 0.3%. The total employment rate also increased, but the increase was slightly lower in Cyprus than the EU27 average. In 2022, these positive developments continued. GDP per capita increased by 4%, which again was higher than the EU27 average for that year. Unemployment further decreased by 0.7%, which was a significant decrease but was not as large a decrease as the EU27 average. While unemployment among both men and young people fell (1.1% and 0.9%, respectively), the decrease among women was minimal. Although this was the first time that female unemployment had fallen since 2020, the unemployment rate was higher than in 2020. In addition, the decrease in unemployment among young people was significantly less than the EU27 average. Total employment, on the other hand, increased in Cyprus by more than the EU27 average in 2022; however, the employment rate of young people continued to fall, in contrast with the increase of the EU27 average.

Legal context

In Cyprus’s present system of industrial relations, labour legislation is a secondary regulating tool. Given that labour law is made up by common law and statute law, the employment relationship is regulated by ordinary Contract Law principles (Contract Law (Cap. 149), as amended), supplemented by statutory rights and obligations where appropriate. In this context, until very recently, industrial relations in Cyprus were regulated by a very limited number of statutes, principally the Termination of Employment Law of 1967, as amended in 2002 (Law 159(I)/2002), and the Annual Holidays with Pay Law of 1967, as amended in 2002 (Law 169(I)/2002). However, with the enforcement of the EU acquis in the area of labour law, a series of laws were introduced from 2002 onwards that now regulate a significant number of terms of employment. In some cases, the EU acquis provided for more favourable terms than those negotiated in collective agreements (for instance, annual leave).

Industrial relations context

The present system of industrial relations was substantially consolidated after 1960 – the year that Cyprus gained its independence – on the basis of the two fundamental principles: voluntarism and tripartite cooperation. Based on these principles, collective bargaining has traditionally played a leading role in regulating industrial relations, and legislation has been a secondary tool (see above). Along the same lines, state intervention generally in industrial relations and particularly in the formulation of terms and conditions of employment is kept to a minimum. In this context, the role of the state is mainly a mediatory one. It intervenes, as also laid down in the Industrial Relations Code (Κώδικας Βιομηχανικών Σχέσεων, IRC), through the Mediation Service of the Ministry of Labour, and Social Insurance (Υπουργείο Εργασίας και Κοινωνικών Ασφαλίσεων, MLSI) in cases in which agreement cannot be reached in direct bipartite bargaining between employer organisations and trade unions. In sectors of economic activity where trade union representation is not present or is weak, the state sets, through legislation, minimum standards of the basic terms and conditions of employment, such as the minimum wage and working time for specific occupations or sectors of economic activity, for example in the retail sector. In the light of decreasing trade union density and in particular given the recent economic crisis, trade unions have, since 2013, been more inclined to be in favour of state intervention in the regulation of the minimum terms of employment. For example, in April 2016, following the renewal of the collective agreement in the hotel industry, the House of Representatives (Βουλή των Αντιπροσώπων) amended the Terms of Employment Regulation for Employees in Hotels (Οι περί εργοδοτουμένων σε ξενοδοχεία (όροι υπηρεσίας) κανονισμοί) by obliging all employers of the sector to extend the minimum entitlements and benefits to all hotel employees, independently of the collective agreement coverage. This was a major demand of the sector’s trade unions. In a similar process concerning the construction industry, the sectoral social partners reached an agreement in 2019 for the renewal of the industry’s collective agreement including the introduction of legislation setting minimum terms of employment for all of the sector’s workers. Unlike any other legal instrument setting minimum terms of employment, this legislation, which was adopted in May 2020, provides for the automatic evolution of these minimum terms in accordance with the respective provisions of the industry’s collective agreement. These developments lead to the assumption that, in future, regulatory and legislative authorities will be called upon more frequently to adopt measures regulating the minimum terms of employment.

Sure enough, 2021 and especially 2022 saw significant developments in labour legislation. Within this short period, there were amendments to the law regarding pregnancy and maternity leave and to the law on the protection of wages. Furthermore, a new law was introduced on paternity leave, parental care, force majeure and flexible working arrangements, which resulted from harmonisation with the EU Directive on Work–Life Balance. This law was enacted in early December 2022 and it abrogated the previous laws on parental leave, force majeure and paternity leave. In addition, 2022 also saw the finalisation of the social dialogue regarding the establishment of a national minimum wage for the first time in Cyprus. The relevant ministerial decree came into effect in 2023, but it was very divisive, as trade unions considered it problematic in many ways. In fact, trade unions have had a number of reasons to be dissatisfied in recent months. In addition to the problematic minimum wage decree, there have been a multitude of disputes of varying significance. These disputes include the following: a great number of hotel owners did not adhere to the collective agreement even after it became a law, as, in the opinion of the trade unions, the incumbent government’s decree that allowed hotel owners and employers in other sectors to employ an increasing number of workers from third countries added insult to injury; the bill on telework, formed after a productive process of social dialogue, never reached the House of Representatives due to the interference of employer organisations that were hoping for a more favourable EU directive on the matter; and employer organisations refused, and the government was reluctant to adhere to, the deal to restore the cost of living allowance (COLA), a situation that led to the first general strike in the history of the Republic of Cyprus. All of these disputes are still ongoing and unresolved issues.

Trade unions, employer organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes European, national, sectoral, regional (provincial or local) and company levels. This section looks at the key players and institutions and their role in Cyprus.

Public authorities involved in regulating working life

The Department of Labour Relations (Τμήμα Εργασιακών Σχέσεων, DLR) of the MLSI is the authority responsible for implementing the government’s policy in the area of industrial relations. Among its main responsibilities, the DLR provides mediation services for the settlement of labour disputes in private and semi-government sectors. Additionally, the department operates the Trade Union Registrar’s Service, which is responsible for the registration and monitoring of social partner organisations in Cyprus.

The main institutions that ensure the enforcement of employees’ rights in Cyprus are (1) the Department of Labour Inspection (Τμήμα Επιθεώρησης Εργασίας) and (2) the Labour Inspectorate (Υπηρεσία Επιθεωρήσεων). The Department of Labour Inspection was set up in 2002 in the context of International Labour Organization (ILO) Convention No. 81 and covers, exclusively, the enforcement of health and safety rules at the workplace. The Labour Inspectorate operates under the Permanent Secretary of the MLSI; it was set up through the Law on the Establishment of the Labour Inspectorate Service (Law 88(I)/2020). The Labour Inspectorate is responsible for the enforcement of a total of 30 pieces of labour-related legislation, not including health and safety legislation, and has replaced the previous labour inspection teams. These teams were multidisciplinary bodies staffed by inspectors from three different departments (the DLR, the Department of Labour and the Department of Social Insurance Services); they were in operation from 2009 until the enforcement of the Labour Inspectorate at the end of 2020.

The Department of Labour is also involved in regulating working life, as under its authority is the supervision of the application of various relevant pieces of legislation, in particular regulating the employment of European citizens and of third-country nationals.

Representativeness

There are no specific criteria for defining the representativeness of employer associations and trade unions at national level. In legal terms, the only statutory regulation that might be considered as establishing criteria of representativeness refers to the formation of trade unions and their obligation to be registered with the Trade Union Registrar (Μητρώο Συντεχνιών). The requirement of official registration with the Trade Union Registrar also applies to employer associations, while a similar obligation applies if a trade union organisation or an employer association wishes to withdraw from the Trade Union Registrar or cease to function.

Overall, the most critical factor in assessing the concept of representativeness is an organisation’s capacity building for social dialogue. In this context, for an organisation to be recognised as a partner in social dialogue and to be classified as a ‘peak national organisation’ (or a ‘central organisation’, which is the most common term in Cyprus), the organisation must be a key player within the existing system of industrial relations. Particularly important are the organisation’s ability to define the terms and conditions of employment through collective bargaining at sector and company levels and its capacity to participate in the consultation process on possible social policy and industrial relations initiatives at national level.

Trade unions

About trade union representation

As provided for by the IRC, both sides recognise the right of employers and employees to organise freely and to belong to organisations of their own choice without any interference or victimisation from either side.

According to the Trade Union Laws, the Trade Union Registrar keeps a register of unions. All unions are obliged to register, after submitting a special application for registration, within 30 days from the date the union is established. To register, each union must have over 20 members, except when fewer than 20 workers are employed in a specific occupation.

In October 2009, a draft bill was introduced to the House of Representatives amending the legislation on trade unions, but, as of 2023, it had still not been enacted. It is currently still with the House of Representatives. The draft legislation was drawn up as part of the MLSI’s efforts, since 1995, to modernise the existing legislation and bring its provisions in line with present-day conditions. For this purpose, extensive consultations were held before the competent tripartite technical committee, which was set up through a decision of the Labour Advisory Board (Εργατικό Συμβουλευτικό Σώμα, LAB); these consultations lasted for almost 10 years. The main parts of the draft legislation were opposed by the Pancyprian Federation of Independent Trade Unions (Παγκύπρια Ομοσπονδία Ανεξάρτητών Συνδικαλιστικών Ορανώσεων, POASO) and by other independent trade unions. One sticking point was Article 9, which increased the minimum number of members required to form a trade union from 21 to 100 people.

In May 2012, Law 55(I)/2012 on the recognition of trade union organisations and of the right to provide trade union facilities for recognition purposes was passed as part of a package of legislative measures for the modernisation of the system of industrial relations, aimed at strengthening legislation provided for by ILO Convention No. 135. In short, Law 55(I)/2012 includes a number of provisions that seek to strengthen the rights to bargain collectively and to give trade union representatives access to workplaces, while still respecting employers’ rights.

The rate of trade union density fell from 76.1% in 1990 to 51.0% in 2008. Although exact figures after 2008 are not available, the Trade Union Registrar estimates that, by 2011, trade union density had dropped below 50%. Between 2011 and 2015, trade unions estimate that there was a further decline. Similarly, the three main trade union organisations that are active in the private sector have reported decreasing membership, although without providing specific figures. The most affected sectors are construction and manufacturing. In the view of the former Minister of Labour Sotiroula Charalambous, between 2008 and 2014 the decrease in union membership was one of the most important problems facing the trade union movement and caused a number of difficulties, including problems with finances. The declining trend in membership is reported by unions to have stabilised in 2016, in line with the stabilisation of the labour market. In 2017 and 2018, trade unions reported increasing membership, although without publishing concrete figures.

Trade union membership and density, 2010–2022

 2010201120122013201420152016201720182019202020212022Source
Trade union density in terms of active employees (%)*n.a.n.a.n.a.n.a.n.a.n.a.54.0951.3549.9249.33n.a.n.a.n.a.Trade Union Registrar
Trade union density in terms of active employees (%)48.045.645.346.645.843.643.3n.a.n.a.n.a.n.a.n.a.n.a.OECD/AIAS ICTWSS database 2021
Trade union membership (thousands)**n.a.n.a.n.a.n.a.n.a.n.a.168,123168,891173,285174,338n.a.n.a.n.a.Trade Union Registrar
Trade union membership (thousands)186182180175171166168n.a.n.a.n.a.n.a.n.a.n.a.OECD/AIAS ICTWSS database 2021

Notes: * Proportion of employees who are members of a trade union. ** Trade (labour) union membership of employees derived for the total (labour) union membership and adjusted, if necessary, for trade (labour) union members outside the active, dependent and employed labour force (i.e. retired workers, self-employed workers, students and unemployed people). n.a., not applicable; OECD/AIAS ICTWSS, Organisation for Economic Co-operation and Development/Amsterdam Institute for Advanced Labour Studies Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts.

Sources: Eurostat [lfsa_eegaed_custom_766159]; OECD and AIAS (2021)

 

Main trade union confederations and federations

In Cyprus, the number of members of a trade union is not considered an element of representativeness. In this context, the table ‘Main trade union confederations and federations’ includes trade union organisations that are relatively small in terms of membership but are considered influential in collective bargaining.

In addition to the three peak national organisations – the Democratic Labour Federation of Cyprus (Δημοκρατική Εργατική Ομοσπονδία Κύπρου, DEOK), the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, PEO) and the Cyprus Employees Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, SEK) – and despite notable differences between the private and the public sectors, the table also includes three union organisations that are active in the public sector: the Organisation of Greek Secondary Education Teachers (Οργάνωση Ελλήνων Λειτουργών Μέσης Εκπαίδευσης Κύπρου, OELMEK), the Pancyprian Union of Public Servants (Παγκύπρια Συντεχνία Δημοσίων Υπαλλήλων, PASYDY) and the Pancyprian Organisation of Greek Teachers (Παγκύπρια Οργάνωση Ελλήνων Δασκάλων, POED). The reason for including these three organisations is that they correspond largely to the classification of central organisations, mainly in relation to their capacity to influence the outcomes of collective bargaining. For the same reason, the Union of Cyprus Banking Employees (Ενωση Τραπεζικών Υπαλλήλων Κύπρου, ETYK) is also included.

Finally, the table also includes the Pancyprian Federation of Independent Trade Union Organisations (Παγκύπρια Ομοσπονδία Ανεξάρτητων Συνδικαλιστικών Οργανώσεων, POASO; previously POAS – it changed its name in 2020). POAS was established in 1956. The federation unites independent employee organisations, mainly those active in state-owned enterprises, and has an observer status in the LAB. Until the middle of the 2000s, POAS was struggling to survive. However, in 2007, after eight independent unions – operating in public enterprises – joined the federation, POAS emerged again as a key player. It further enhanced its position in 2020, when the Pancyprian Nurse Trade Union (Παγκύπρια Συντεχνία Νοσηλευτών, PASYNO) and the Independent Union of Cyprus’s Public Employees (Ανεξάρτητη Συντεχνία Δημοσίων Υπαλλήλων Κύπρου, ASDYK) also joined the federation. POASO member unions are signatory parties of various collective agreements in the broader public sector.

Main trade union confederations and federations

Name

Abbreviation

Number of members

Involved in collective bargaining?

2008

2015

2016

2017

2018

2019

2020

2021

2022

Democratic Labour Federation of Cyprus (Δημοκρατική Εργατική Ομοσπονδία Κύπρου)

DEOK

9,407

7,125

7,123

7,024

7,113

7,172

7,173

n.a.

n.a.

Yes

Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία)

PEO

83,132

60,686

61,559

61,372

61,458

61,656

58,291

n.a.

n.a.

Yes

Cyprus Employees Confederation (Συνομοσπονδία Εργαζομένων Κύπρου)

SEK

70,322

53,467

56,775

57,842

59,944

60,635

n.a.

n.a.

n.a.

Yes

Union of Cyprus Banking Employees (Ενωση Τραπεζικών Υπαλλήλων Κύπρου)

ETYK

10,671

9,341

8,775

8,806

9,195

n.a.

8,882

n.a.

n.a.

Yes

Organisation of Greek Secondary Education Teachers (Οργάνωση Ελλήνων Λειτουργών Μέσης Εκπαίδευσης Κύπρου)

OELMEK

5,643

5,373

5,150

5,403

5,740

5,757

5,654

5,641

n.a.

Yes

Pancyprian Union of Public Servants (Παγκύπρια Συντεχνία Δημοσίων Υπαλλήλων)

PASYDY

n.a.

15,323

14,683

14,271

14,246

14,024

21,125

21,144

n.a.

Yes

Pancyprian Organisation of Greek Teachers (Παγκύπρια Οργάνωση Ελλήνων Δασκάλων)

POED

5,174

5,545

5,560

5,708

5,923

6,287

6,247

6,271

n.a.

Yes

Pancyprian Federation of Independent Trade Union Organisations (Παγκύπρια Ομοσπονδία Ανεξάρτητων Συνδικαλιστικών Οργανώσεων)

POASO

1,842

1,422

1,329

1,302

1,227

1,228

n.a.

n.a.

n.a.

Yes

Source: Trade Union Registrar

At organisational level, there have been no notable developments since 2011 regarding the organisation and the role of the trade unions. During the same period, there were no legislative developments that had a direct impact on the role of the social partners in social dialogue, collective bargaining and industrial conflicts.

The most recent relevant developments are as follows.

  1. ASDYK was established in November 2014 as a result of a split from PASYDY. ASDYK was registered as a trade union in January 2015. In contrast with PASYDY’s organisational structure, the new union’s leadership has a three-year term and a two-term limit. Additionally, any leadership official who gets a promotion will automatically resign their post in the union, while union officials will not receive any payment. As of March 2017, the union had 240 members, mostly public employees of a younger age.
  2. The Cyprus Trade Union Equality (Παγκύπρια Συντεχνία Ισότητα) was registered in December 2017. The union aims to organise people with non-permanent employment relationships in the broader public sector and, at the end of 2017, it had 360 members.
  3. Two trade unions, the Cyprus Building, Wood, Mine and General Workers Trade Union (Συντεχνία Οικοδόμων, Ξυλουργών, Μεταλλωρύχων και Γενικών Εργατών Κύπρου) and the Cyprus Metal Workers, Mechanics and Electricians Trade Union (Συντεχνία Εργατών Μετάλλου, Μηχανοτεχνιτών και Ηλεκτροτεχνιτών Κύρου) (both belonging to PEO), finalised their merger in 2022; the process began in late 2021.
  4. The Independent Trade Union of Technical and Labour Staff of the Electricity Authority of Cyprus (Ανεξάρτητη Συντεχνία Τεχνικού και Εργατικού Προσωπικού Αρχής Κύπρου) was formed in 2021, while the Cyprus Association of Firemen (Σύνδεσμος Πυροσβεστών Κύπρου, trade union) was formed in 2022.
  5. The Pancyprian Trade Union of Government Pharmacists (Παγκύπρια Συντεχνία Κυβερνητικών Φαρμακοποιών) disbanded in 2021 and the Free Workers and Employees Trade Union of the Cyprus Petroleum Storage Company (Ελεύθερη Συντεχνία Εργατουπαλλήλων Κυπριακής Εταιρείας Αποθήκευσης Πετρελαιοειδών, a member of SEK) disbanded in 2022.

Membership data for 2016–2019, as presented in the preceding table, indicate that the country’s two peak trade union confederations, SEK and PEO, are recovering from the significant membership loss during the recent economic crisis. However, their membership remains far below the pre-crisis level of 2008. Although the data from 2020 onwards are incomplete, it appears that, in general, trade union membership is remaining relatively stable.

 

Employer organisations

About employer representation

As far as employer organisations are concerned, to date, the structure, organisation and operation of the employer organisations in Cyprus have not been studied and examined in a systematic way.

Most references in this regard are contained in literature that either examines issues of labour law and industrial relations in general or approach the issue of the operation of employer organisations historically.

The two national peak employer organisations are the Cyprus Chamber of Commerce and Industry (Κυπριακό Βιομηχανικό και Εμπορικό Επιμελητήριο, CCCI) and the Cyprus Employers and Industrialists Federation (Ομοσπονδία Εργοδοτών και Βιομηχάνων, OEB). There are no systematic data available regarding employer organisation density. Nevertheless, both the CCCI and the OEB have reported that there is a clear trend of an increasing number of members and a unique rallying of members. In the view of the OEB, the new economic situation that has emerged as a result of the economic crisis, the insecurity of enterprises in this new environment and the urgent need to find solutions have led more enterprises to seek means of representation and protection of their interests. In this context, losses in membership have been offset by new members joining. A noteworthy development in recent years is the dissolution in December 2015 of the Cyprus Bankers Employers’ Association (Κυπριακός Εργοδοτικός Σύνδεσμος Τραπεζών, KEST). KEST was dissolved on the decision of its final remaining members soon after major banks, such as the Bank of Cyprus and Cooperative Central Bank, left the association. Now, the ETYK must negotiate collective agreements with each bank separately.

The Trade Union Registrar (which is also responsible for employer organisations and business associations) testified that, in 2022, there was an increase in the interest and the mobilisation of employers to form new organisations; in fact, the most significant development was the initiation of a process to reinstate KEST in 2022, a process that was finalised in December 2022, eight years after its disbanding.

Employer organisation membership and density, 2012–2022

 

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source
Employer organisation density in terms of active employees (%)

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

66.1

n.a.

n.a.

n.a.

n.a.

OECD/AIAS ICTWSS database 2021
Employer organisation density in private sector establishments (%)*

n.a.

43

n.a.

n.a.

n.a.

n.a.

n.a.

11

n.a.

n.a.

n.a.

European Company Survey 2019

Note: * Percentage of employees working in an establishment that is a member of any employer organisation that is involved in collective bargaining.

Sources:Eurofound and Cedefop (2020); OECD and AIAS (2021)

 

Main employer organisations

In addition to the CCCI and the OEB, the table ‘Main employer organisations and confederations’ also includes two sectoral employer associations that are influential in terms of collective bargaining: the Federation of Associations of Building Contractors Cyprus (Ομοσπονδία Συνδέσμων Εργολάβων Οικοδομών Κύπρου, OSEOK), which is a member of the OEB, and the Cyprus Hotel Association (Παγκύπριος Σύνδεσμος Ξενοδόχων, PASYXE), which is a member of the CCCI. It also includes the Association of Cyprus Tourist Enterprises (Σύνδεσμος Τουριστικών Επιχειρήσεων Κύπρου, STEK), which is a member of the OEB.

Main employer organisations and confederations

Name

Abbreviation

Members

Year

Involved in collective bargaining?

Source

Cyprus Chamber of Commerce and Industry (Κυπριακό Βιομηχανικό και Εμπορικό Επιμελητήριο)

CCCI

145 professional associations

2023

Yes

ccci.org.cy

Cyprus Employers and Industrialists Federation (Ομοσπονδία Εργοδοτών και Βιομηχάνων)

OEB

113 employer associations, businesses and professional associations

2023

Yes

oeb.org.cy

Federation of Associations of Building Contractors Cyprus (Ομοσπονδία Συνδέσμων Εργολάβων Οικοδομών Κύπρου)

OSEOK

5 district associations

2021

Yes

oseok.org.cy

Cyprus Hotel Association (Παγκύπριος Σύνδεσμος Ξενοδόχων)

PASYXE

235 member companies

2023

Yes

cyprushotelassociation.org

Association of Cyprus Tourist Enterprises (Σύνδεσμος Τουριστικών Επιχειρήσεων Κύπρου)

STEK

32 hotel members, 20 member companies and 1 professional association

2023

Yes

acte.com.cy

 

Tripartite and bipartite bodies and concertation

In Cyprus, although the law does not institutionalise social dialogue bodies, there is a long tradition of social dialogue. The implementation of almost all proposals and policies regarding industrial relations is the result of social dialogue between the government, employer organisations and trade unions. However, social partners have been voicing more complaints in the last few years over unilateral decisions and initiatives of the government.

On a practical level, cooperation between the three parties is achieved partly through the operation of technical committees and other bodies of tripartite representation, but mainly through the representation of the stakeholders in the LAB within the MLSI, which is considered to be the most important mechanism of tripartite representation. In the past, every governmental initiative was subjected to exhaustive consultations in the LAB, but, in recent years, a higher number of legal measures have been processed unilaterally by the government without any tripartite negotiation.

The LAB, as the sole body for social dialogue, is occasionally subject to criticism. The main criticism is that social dialogue representation is restricted to a very small number of trade unions, at confederation level only, but without the participation of all confederations. In this context, all other trade unions are practically excluded from the official bodies of tripartite representation and the LAB in particular. Specifically, on behalf of the employers there are three representatives from the CCCI and three from the OEB, while on behalf of the trade unions there is one representative from DEOK, three representatives from PEO and three representatives from SEK. However, depending on the issue in question, representatives from other trade unions or employer associations might be invited on an ad hoc basis, but mainly participating as observers. The LAB was not convened regularly during the recent economic crisis (2012–2015). Since 2018, the Minister of Labour, Welfare and Social Insurance has been resorting to consultations with social partners within the context of the LAB more frequently.

In terms of the issues covered, there is a relatively limited social dialogue agenda and there is a lack of initiative on behalf of the social partners to expand into new areas, such as economic and monetary issues. In the context of the European Semester, for example, the Cyprus National Reform Programme is mainly being prepared by the ministries and other public agencies involved. The involvement of social partners is minimal and limited to the initial stage of the preparation process. Trade unions in particular have, during the recent economic crisis (2012–2015), also criticised the government for committing to various far-reaching agreements with its international creditors (the International Monetary Fund, the European Commission and the European Central Bank) without conducting any consultations with the country’s social partners. Trade unions see such practices as an outright attack on the existing system of industrial relations, which is based on the principle of tripartite collaboration.

After the accession of Cyprus to the European Union, the National Employment Committee (NEC) was created. The NEC has a tripartite composition and is chaired by the Minister of Labour, Welfare and Social Insurance. The NEC played an advisory role on issues related to the implementation of the European employment policy, the performance of the labour market, the modernisation of the Public Employment Service, the monitoring of the National Action Plan for Employment and the reformation of the employment framework of third-country nationals. The NEC has reportedly not been active since the summer of 2015.

It should be noted that the social partners participate in almost all policymaking organisations, such as the Human Resources Development Authority (HRDA) and various other committees and councils of minor importance.

Main tripartite bodies

Name

Abbreviation

Type

Level

Issues covered

Source

Labour Advisory Board (Εργατικό Συμβουλευτικό Σώμα)

LAB

Tripartite

National

All issues related to labour relations

Own elaboration

National Employment Committee (Εθνική Επιτροπή Απασχόλησης)

NEC

Tripartite

National

All issues related to employment policy

Own elaboration

 

Workplace-level employee representation

Cyprus has a weak tradition in terms of the existing structures for employee representation at establishment level. In this context, the main representation structures to date are the trade union representation and safety committees, while recently established structures such as the European works councils do not seem particularly viable.

In the framework of its mediating role, the MLSI encourages the social partners to promote the establishment of information and consultation (I&C) bodies. As a result, a number of collective agreements at both sectoral and enterprise levels have now incorporated a special clause that refers to social partners’ intention to establish I&C bodies in accordance with the provisions of Law 78(I)/2005 on establishing a general framework for informing and consulting employees. However, so far it has not resulted in any practical and meaningful measures. At the same time, although the social partners agree that the adoption of Law 78(I)/2005 is important as far as it lays down employees’ right to information and consultation on a wide range of important issues, they are not motivated to introduce I&C arrangements, as, in their opinion, I&C rights are safeguarded by the industrial relations system itself.

It should be noted that safety committees exist in establishments with 10 or more employees, as provided for by the legislation on health and safety at work (Law 89(I)/1996) and the relevant regulations on safety committees (Regulatory Administrative Act 134/1997).

Regulation, composition and competencies of the bodies

BodyRegulationCompositionCompetenciesThresholds for/rules on when the body needs to be/can be set upSource
Trade unions’ local committees in the private sector, local administration and state-owned enterprisesBy the trade union’s own statutes or on an ad hoc basis

Every trade union maintains its own committee

Representatives are elected or appointed by trade unions

The number of representatives varies between trade unions (from 1 to 10 members)

Theoretically, they can deal with everything

Practically, they deal with workplace-specific issues, working conditions and individual complaints

They observe the application of collective agreements and report violations to trade unions

They cooperate with trade union officials on the conclusion or renewal of collective agreements

They provide information for and undertake consultation with the employer

No thresholdsOwn elaboration
Joint departmental staff committees for public servants (set up at the level of ministries)By formal regulations negotiated with PASYDY and ratified by the Council of Ministers

Equal representation of the employer and employees

The employer (the state) is represented by three high-ranking officials

Employees are represented by three people appointed by PASYDY

Advisory role: decisions are considered as recommendations to the government

They deal only with issues related to working conditions of the ministry in question

They deal only with questions affecting public servants of the ministry in question

No thresholds mentioned

Joint departmental staff committees operate at every ministry

Authors’ own elaboration
Local committees in the public sector for hourly paid workers and employees (operation in governmental departments)By formal regulations negotiated and concluded between the government and the trade unions

Committees are composed of the official side (employer) and the employee side

The official side is represented by one high-ranking official of the department in question

Employees are represented by elected representatives whose number is determined by the total number of the department’s employees (up to 100 employees are represented by three elected representatives, 101–200 employees are represented by five representatives and 201 or more employees are represented by seven representatives)

Advisory role: decisions are considered as recommendations to the government

They deal with the application of the regulations determining the working conditions, welfare and training of hourly paid employees, as well as productivity-related issues in the department in question

No thresholds mentioned

Local committees operate in every department of the government

Authors’ own elaboration
Safety representatives/safety committeesHealth and safety at work law of 1996, as amended in 2015 (Law 89(I)/1996)

In establishments with 2–9 employees, a safety representative is chosen, appointed or elected

In establishments with 10 or more employees, a safety committee has to be set up consisting of two elected representatives in establishments with 10–19 employees, three representatives in establishments with 20–49 employees and one additional representative for every 50 additional employees after that

The employer is also represented in the safety committee

Advisory role

They provide information to and undertake consultation with employees as regards health and safety

Thresholds apply

In establishments with 2–9 employees, a safety representative is chosen, appointed or elected

A safety committee has to be set up in establishments with 10 or more employees

Authors’ own elaboration

The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in Cyprus.

Bargaining system

The right to collective bargaining is guaranteed and safeguarded by the Constitution of 1960. In particular, Article 26(2) of the Constitution provides that ‘a law may provide for collective labour agreements of obligatory fulfilment by employers and workers with adequate protection of the rights of any person, whether or not represented at the conclusion of such agreement’.

In the absence of relevant law, however, the collective agreements concluded thus far are considered ‘gentlemen’s agreements’. This implies that the regulatory part of the agreements – terms regulating pay and working conditions issues, along with other issues arising from the provision of labour – has no direct or obligatory effect on workers.

In practice, the system of free collective bargaining developed in the framework of the IRC applies to both the private and the semi-public sectors.

Despite a clear trend towards decentralisation of collective bargaining, as reported by both trade unions and employer associations, a mixed situation continues to exist in Cyprus in which bargaining levels alternate between the sector and company levels. In this context, it is rather difficult to assess which is the predominant level, mainly with regard to the total bargaining coverage rate. Specifically, despite the numerical preponderance of the enterprise level, the sectoral level is seen as just as important, if not more important, as far as coverage is concerned.

Wage bargaining coverage

The available data on collective bargaining coverage are fragmented and derive from various sources, while the methods by which they are collected and processed are unknown. In this context, it is problematic to cite any specific data, while it is extremely important to differentiate between the public/broader public sector, where the proportion of coverage reaches almost 100%, and the private sector. As far as the private sector is concerned, without providing an exact figure, trade unions have reported that there has been a trend of decreasing bargaining coverage since 2007 and that the pace of this trend has been steadily increasing since 2010. This trend became more evident over the course of the recent economic crisis.

Collective wage bargaining coverage of employees

Level% (year)Source
All levels43.3 (2016)OECD/AIAS ICTWSS database 2021
All levels61 (2013)European Company Survey 2013
All levels35 (2019)European Company Survey 2019
All levels49 (2010)*Structure of Earnings Survey 2010
All levels44 (2014)*Structure of Earnings Survey 2014
All levels36 (2018)*Structure of Earnings Survey 2018

Note: * Percentage of employees working in local units where more than 50% of the employees are covered under a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013 and 2019 (including private sector companies with establishments of >10 employees (Nomenclature of Economic Activities (NACE) codes B–S), with multiple answers possible; Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01], Structure of Earnings Survey 2010, 2014 and 2018 (including companies with >10 employees (NACE codes B–S, excluding O), with a single answer for each local unit); OECD and AIAS (2021).

 

Bargaining levels

In Cyprus, collective bargaining takes place at sectoral and enterprise levels. At sectoral level, direct negotiations are always held between the two sides of industry, in most cases between the two biggest confederations from the employees’ side (PEO and SEK) and the OEB from the employers’ side. At enterprise level, collective agreements are drawn up and negotiated, usually directly, between the trade union representatives and the employer, but in a number of cases with the assistance of the company’s affiliated employer association.

Levels of collective bargaining, 2022

 

National level (intersectoral)

Sectoral level

Company level

Wages

Working time

Wages

Working time

Wages

Working time

Principal or dominant level    

X

X

Important but not dominant level  

X

X

  
Existing level      

Articulation

Articulation between the two bargaining levels is rather weak. As a result, bargaining at sectoral level does not constitute the basis for setting pay on a more specific level such as enterprise level.

Timing of the bargaining rounds

The time when collective bargaining takes place is not set. Nevertheless, based on the provisions of the IRC, the party seeking to modify an existing collective agreement should give the other party at least two months’ notice of its intention to do so, before its expiry, and accompanied by a list of either claims or modifications. The only exception is when, in the case of small undertakings, a different process is stipulated in the collective agreement.

When both parties agree, the existing collective agreement will continue to be in force for a period equal to the length of the delay in the submission of the claims if this delay does not exceed 15 days. If the party seeking to modify an existing agreement has failed to give notice of its intention to do so, the collective agreement remains in force for another year.

As a result of the economic crisis, an objective of employer organisations is the conclusion of longer-term collective labour agreements, something that they believe the unions are also seeking. Unions, however, believe that the term of collective agreements should be shorter, as many provisions are judged to be temporary due to the economic crisis.

Coordination

Although there is no operational coordination between the different levels of bargaining, in a few sectors of economic activity, such as hotels, metalworking and the construction industry, collective bargaining constitutes the basis for setting pay in other sectors of economic activity, at either subsectoral or company level. This means that these sectors are informally considered as pacemaking sectors.

Extension mechanisms

Collective agreements apply to signatory parties’ members only. However, in Cyprus, there is no general legal provision for mandatory extension of the collective agreements, nor is there a functional equivalent.

The Christofia’s government submitted, in February 2013, a draft law aimed at introducing an extension mechanism for sectoral collective agreements. The Anastasiades’ government, which took office in March 2013, revoked the draft law. Thereafter, the president of the Labour Committee of the House of Representatives resubmitted the draft law with minor essential changes. As of end of 2022, the draft law was still with the Labour Committee and had not yet been taken into the committee’s priority agenda.

A type of extension mechanism was introduced by legislation in May 2020. The legislation is specific to the construction industry. The legislation extends the following five provisions of the sectoral collective agreement to all of the industry’s workers: (1) public holidays, (2) a provident fund, (3) working time, (4) remuneration of overtime and (5) a 13th salary payable to workers in December.

In relation to wage indexation that applies to the outcomes of collective bargaining, all employees are covered, regardless of whether they are a member of a trade union.

Derogation mechanisms

Derogation is possible, but no concrete figures on its extent are available for Cyprus. The DLR reported for 2012 that there was an increase in the number of employers that introduced unilateral changes to the terms and conditions of employment, which, in most cases, resulted in a partial violation of collective agreements and fewer people being covered. Partial violation means either that not all of the provisions of the agreement were observed or that only a small portion of the staff were covered (with those covered usually being permanent staff who are union members).

Opening clauses have been more common since 2012, as a result of the economic crisis. There is no relevant legislative or institutional framework and, prior to 2008, opening clauses were not used. It should be noted that, in Cyprus, instead of the term ‘opening clause’, social partners prefer to refer to ‘special/ad hoc agreements’ (or provisions within an existing agreement) that take the form of a hardship clause as a result of the economic crisis. The OEB has stated that, since 2012, most renewals have been made in the framework of this type of agreement, being entered into for a short period of time, usually for one year. As regards their content, these special/ad hoc agreements refer almost exclusively to pay and working time. In practice, the ad hoc agreements function as framework agreements, allowing deviations from the original agreement, whereas any individual deviations take place at enterprise level, depending on the special conditions faced by each individual enterprise. As the economy returned back to positive growth rates, from the second half of 2015 the main trade unions of the private sector began focusing on the recovery of all of the terms provided by collective agreements.

Expiry of collective agreements

Until their renewal, the previous agreements usually remain in force. In the view of PEO, however, this is a grey area in which it is unclear what is or is not in force. In this context, PEO has pointed out that, as a result of the economic crisis, there have been more delays in renewing collective labour agreements and therefore many workers both in individual enterprises and in whole sectors of economic activity have remained uncovered by basic terms and conditions of employment.

Peace clauses

Not all collective agreements contain a peace clause, and those collective agreements that do have a peace clause point to the provisions of the IRC anyway. The IRC is merely a ‘gentleman’s agreement’ and therefore does not produce legal obligations. However, social partners involved in collective bargaining adhere to its provisions. The IRC deals with industrial peace according to the nature of the dispute. For conflicts over interests (conflict arising out of negotiations for the conclusion of a new or the renewal of an existing collective agreement), the IRC provides that the parties must not resort to industrial action either during the validity of a collective agreement or during mediation, arbitration or public inquiry.

In the case of disputes over grievances (defined as disputes arising from the interpretation and/or implementation of existing collective agreements or of existing conditions of employment or from a personal complaint including a complaint over a dismissal), the parties undertake not to resort to any industrial action. Trade unions may resort to industrial action if an employer, against the recommendations of the MLSI, flagrantly violates a provision of the collective agreement.

Other aspects of working life addressed in collective agreements

In terms of its content, collective bargaining is rather limited and covers traditional issues such as pay and working time. Other issues related to individual employment and working conditions are considered to be of secondary importance.

Legal aspects

The right to strike is guaranteed by the Constitution of the Republic of Cyprus. Specifically, Article 27, paragraph 1, provides that:

the right to strike is recognised and its exercise may be regulated by law for the purposes only of safeguarding the security of the Republic or the constitutional order or the public order or the public safety or the maintenance of supplies and services essential to the life of the inhabitants or the protection of the rights and liberties guaranteed by this Constitution to any person

According to paragraph 2 of Article 27, people belonging to the armed forces, police and gendarmerie do not have the right to strike. A law could be passed to extend this prohibition to public employees. However, no such law has ever been enacted.

The issue of regulating strikes and of the dispute settlement procedure in essential services had remained pending for a number of years, with three attempts to regulate the matter through legislation resulting in a deadlock. In March 2004, a tripartite agreement on the procedure for resolving labour disputes in essential services was finally signed. The accord introduces an arbitration procedure in such disputes but does not rule out industrial action. In the framework of the new agreement, Defence Regulations 79A and 79B, which were issued on the basis of an existing essential services order, should be abolished. Both the International Labour Office and the Council of Europe have remarked that Regulations 79A and 79B are not consistent with treaties of these bodies ratified by the Republic of Cyprus.

There is no specific reference in the Constitution, or any other law, to a right to introduce a lockout. In a study on the matter by the attorney general, it was concluded that, in accordance with existing legislation in Cyprus, lockout, although not recognised by the Constitution, ‘is a right the employer has, provided it is exercised for safeguarding or promoting the lawful interests of the employer during a trade dispute and without committing any penal or illegal act or activity’. Additionally, the IRC, under part II, section B, paragraph 1(d) (violations of collective agreements), provides that ‘the aggrieved party may resort to any lawful action, including a strike or lockout, in defence of its interests’.

Developments in industrial action, 2012–2022

 

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Number of strikes

56

31

43

31

14

16

37

139

21

13

n.a.

Number of employees involved

37,542

44,089

23,741

6,393

5,520

5,074

8,839

42,052

2,482

1,133

n.a.

Working days lost

48,294

605,464

29,653

13,224

35,801

3,990

24,717

74,969

4,685

1,106

n.a.

Source: DLR (undated)

 

Dispute resolution mechanisms

Collective dispute resolution mechanisms and individual dispute resolution mechanisms

In the current system of collective bargaining, government coordination is rather weak. The state intervenes, as laid down in the IRC, through the Mediation Service of the Ministry of Labour when reaching an agreement in direct bipartite bargaining between employer organisations and trade unions is difficult.

Specifically, the IRC consists of two parts. In the first part, under the title ‘Substantive provisions’, the two main participating parties recognise and ensure certain fundamental rights to free collective bargaining, while, in the second part, titled ‘Procedural provisions’, the IRC provides for separate procedures to be followed for the settlement of disputes over interests and for the settlement of grievances/disputes over rights. As reported by the Ministry of Labour, given the complex nature of the agreements, many labour disputes arise from the interpretation of the agreements (disputes over grievances), leading to a constant stream of labour disputes.

Over the past decade, the MLSI has played an important role in maintaining industrial peace by providing mediation services for the renewal of collective agreements. In this context, it is worth mentioning that, during the same period, increasingly fewer sectoral collective agreements were concluded at the direct bargaining stage, causing serious delays in the renewal of agreements. Specifically, according to official data provided by the DLR of the MLSI for 2017, 150 labour disputes were referred to mediation, involving a total of 14,144 employees, compared with 177 labour disputes in 2016, involving a total of 61,693 employees.

Use of dispute resolution mechanisms, 2012–2022

 

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Number of mediations

316

280

229

228

177

150

211

168

341

273

n.a.

Number of employees involved

30,962

46,191

19,197

13,063

61,693

14,144

25,927

29,420

32,201

28,669

n.a.

Source: DLR (undated)

‘Individual employment relations’ refers to the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over terms and conditions. This section looks at the start and termination of the employment relationship and entitlements and obligations in Cyprus.

Start and termination of the employment relationship

Requirements regarding an employment contract

The employment relationship is not regulated by legislation. However, some legal regulations apply concerning the protection of young people in employment.

The minimum working age is 18 years and it is regulated by Law 48(I)/2001 on the protection of young people at work. The main purpose of Law 48(I)/2001 is to protect people under the age of 18 at work. The basic provisions of the relevant legislation are the following.

  • It prohibits the employment of children.
  • It lays down the hours of work, the daily and weekly rest and the night-work restrictions for children and adolescents.
  • It regulates the placement of children under combined work and training programmes. It sets the general obligations of employers in this regard.
  • It specifies prohibited types of employment.
  • It prescribes the offences and penalties.

Dismissal and termination procedures

In terms of dismissals and termination procedures, the core legislation is Law 24/1967 on the termination of employment and Law 28(I)/2001 on collective redundancies.

As far as the termination of employment is concerned, the purpose of Law 24/1967 is to protect employees against dismissal. Law 24/1967 covers all employees, whether in the private or the public sector, including apprentices. It also covers the shareholders of private companies who are employed by their companies. Employees of the UK government and of the Navy, Army and Air Force Institutes working in Cyprus are exempted from the provisions of the specific legislation. Under Law 24/1967, an employer intending to terminate the employment of an employee who has completed at least 26 weeks of continuous employment with that employer is obliged to give the employee a minimum period of notice, depending on the length of the employee’s service, as provided by the law. In Cyprus, every dismissal is considered unfair unless the employer proves otherwise. For more information on individual dismissal procedures, the reader can consult the termination of employment guide of the MLSI (undated).

In the case of collective redundancies, the purpose of Law 28(I)/2001 is to protect employees in the event of collective redundancies. A minimum of 21 people must be employed in the establishment for the company to fall within the remit of the law. To fall within the scope of the legislation, employers must be planning to dismiss or make redundant 10 or more employees within 30 days in enterprises with 21–100 employees, 10% of the workforce in enterprises with 101–299 employees and 30% of the workforce in enterprises employing 300 employees or more.

Civil servants, workers employed by semi-governmental organisations, local authorities or legal entities covered by public law, seamen and workers on fixed-term contracts are exempt from the legislation.

Entitlements and obligations

Parental, maternity and paternity leave

In August 2017, paid paternity leave of two weeks was introduced, in addition to maternity and parental leave. Furthermore, there was a significant development in the relevant legislation in 2022, which was brought by harmonisation with the EU Directive on Work–Life Balance. The new paternity leave, parental care, force majeure and flexible working arrangements law was enacted in December 2022 and it abrogated the previous laws on parental leave, force majeure and paternity leave. This law allows for flexible work arrangements – that is, employees who have children up to eight years of age have the possibility of adjusting their form of employment, through, among other things, telework, flexible hours or reduced working hours. They also have the right to request to return to their original form of employment before the end of the agreed period for which flexible arrangements were made. Note that the changes brought by this law led to the update of the laws regarding termination of employment, social security, annual leave and the equal treatment of men and women in the workplace.

Statutory leave arrangements

Maternity leave
Maximum duration

Maternity leave is currently set at 18 consecutive weeks, of which 11 are considered mandatory. It must be used in the following way: two weeks before the expected week of birth and nine weeks after the birth.

As of November 2021, maternity leave was increased by four weeks for a second childbirth or the adoption of a second child, including through surrogacy, and by eight weeks for a third or subsequent childbirth or the acquisition of a third or later child by adoption or surrogacy.

ReimbursementThe weekly rate of maternity allowance is equal to 72% of the weekly value of the insurance point of the insured person’s basic insurance in the relevant contribution year.
Who pays?The Social Security Fund (Ταμείο Κοινωνικών Ασφαλίσεων) – but the employer can pay part of it if so desired; however, this condition is not explicitly provided by the relevant legislation.
Legal basisProtection of Maternity Law (Law 100(I)/1997)
Parental leave
Maximum duration

Every working parent who has completed six months of continuous service with the same employer is entitled to parental leave. The total duration of parental leave is up to 18 weeks for each child under the age of eight years, adopted child under the age of 12 years or child with a disability under the age of 18 years, and is 23 weeks in the case of a widowed parent. Parental leave is taken with a minimum duration of one week and a maximum duration of five weeks per calendar year; following the relevant application by an employee, parental leave may alternatively be granted in a flexible manner, provided that the right to receive parental leave in flexible ways is limited to the possibility of receiving it with a minimum period of one day.

Moreover, provided that, on the date of submission of the application, the parent has completed 12 months of employment within the last 24 months, during the eight weeks of parental leave, they receive a parental leave allowance. In the case of a child with a disability, the duration of the parental leave allowance is extended by:

  • four weeks, provided that the child has been certified by the Disability and Functionality Assessment System of the Department of Social Inclusion of Persons with Disabilities (Σύστημα Αξιολόγησης Αναπηρίας και Λειτουργικότητας του Τμήματος Κοινωνικής Ενσωμάτωσης Ατόμων με Αναπηρία) as a person with a severe disability or with a moderate mental disability
  • six weeks, provided that the child has been certified by the Disability and Functionality Assessment System of the Department of Social Integration of Persons with Disabilities as a person with a total disability
ReimbursementThe weekly amount of the benefit amounts to 72% of the weekly value of the insurance point of the insured person’s basic insurance in the relevant year of contributions, and 60% of the weekly value of the number of insurance points of the insured person’s supplementary insurance of the relevant tax year.
Who pays?

The Social Security Fund.

In addition, a small number of enterprise collective agreements may provide for part of the parental leave on a full pay basis (for instance, the French School of Nicosia).

Legal basisThe Leave (Paternity, Parental, Caring, Force Majeure) and Flexible Work Arrangements for the Work–Life Balance Law of 2022 (Law 216(I)/2022)
Paternity leave
Maximum durationEvery working father is entitled to paternity leave of two consecutive weeks and can take it from the birth of the child up to two weeks after the end of the maternity leave. He receives it when he has a child with a natural mother, with a surrogate mother or through the adoption of a child up to 12 years old. The father is also entitled to paternity leave in the event of a stillbirth and, if the mother dies before or during childbirth or during maternity leave, the right to paternity leave increases with the remaining weeks of maternity leave that the mother would have been entitled to if she had not died.
ReimbursementThe weekly rate of paternity allowance is equal to 72% of the weekly value of the insurance point of the insured person’s basic insurance in the relevant contribution year.
Who pays?The Social Security Fund – but the employer can pay part of it if so desired; however, this condition is not explicitly provided for under the relevant legislation.
Legal basisThe Leave (Paternity, Parental, Caring, Force Majeure) and Flexible Work Arrangements for the Work–Life Balance Law of 2022 (Law 216(I)/2022)

Sick leave

Under Cyprus law, there is no statutory obligation on the employer to pay sick pay. When an employer does not enter into a specific arrangement with its employees about sick pay, the sickness benefit is covered by the Social Insurance Scheme (Σχέδιο Κοινωνικών Ασφαλίσεων), which is applicable to all those who are entitled to this benefit, irrespective of the applicant’s age. Nevertheless, under the existing system, the sickness benefit is paid to employees and self-employed people aged between 16 and 63 years who are incapacitated for work. People who do not satisfy the insurance conditions for entitlement to an old-age pension at 63 years of age are entitled to a benefit up to the required date, but never after the age of 65. The weekly rate of sickness benefit is the same as that of the unemployment benefit and is calculated in the same way.

Retirement age

From 2008 to 2012, a significant reform of the pension system took place in three distinct phases, as part of a wider reform of the social insurance system aiming to ensure the long-term financial sustainability of the system. During the first phase (which was completed in 2009), a number of measures were put forward that aimed primarily to increase revenue through higher contributions. During the second and third phases, a number of measures were introduced as part of the country-specific recommendations and the memorandum of understanding. In the context of these reforms, the general retirement age is set at 65 years in the private sector. Employees who have accumulated sufficient social security rights can still take their pension at the age of 63; however, if they do so, a penalty is imposed amounting to 0.5% for every month they take their pension before the age of 65. In the public sector, the retirement age was gradually increased from the age of 60 to 65 years. In the social security reform of 2012, the retirement age was linked to the increase in life expectancy. According to this provision, a review must take place every five years. The first review will reflect the change of life expectancy from 2018 to 2023.

Retirement age is gender neutral.

For workers, pay is a reward for their work and their main source of income; for employers, it is a cost of production and a focus of bargaining and legislation. This section looks at minimum wage setting in Cyprus and guides the reader to further material on collective wage bargaining.

Since 2011, developments regarding pay have been determined by the economic crisis. In the context of the crisis, measures of the government to increase revenue and/or reduce expenditure included pay cuts, the introduction of special contributions and a general recruitment halt in the public sector (these measures are described below), as well as the freezing of COLA. In the private sector, in 2013 trade unions ‘silently’ also accepted the suspension of COLA. Furthermore, trade unions followed an ‘organised retreat’ strategy by concluding time-limited special agreements allowing the derogation from certain provisions of the collective agreements, such as pay, remuneration of overtime and remuneration of work on public holidays. Since 2015, with the economy returning to positive growth rates (reaching an estimated growth rate of 3.8% in 2017), trade unions have increasingly been exerting pressure for the pre-crisis wage levels to be reinstated and for the reinstatement of benefits such as COLA, the renewal of collective agreements and the abolition of special agreements. In 2016 and 2017, various significant agreements were concluded, the most important of which are presented below.

In 2017, an agreement was reached providing for the reinstatement of COLA. The agreement was valid for three years (2018–2020) and provided for the disbursement of COLA at a rate of 50% once at the beginning of the year. Negotiations under the guidance of the Minister of Labour, Welfare and Social Insurance took place in 2020 with the aim of determining a new permanent agreement for the terms and frequency of COLA. In view of the COVID-19 crisis, the agreement was extended until the end of 2021.

Average gross monthly earnings by branch of economic activity and sex: 2012, 2017, 2019 and 2021 (€)

NACE group

2012

2017

2019

2021

Total

Men

Women

Total

Men

Women

Total

Men

Women

Total

Men

Women

A–S

1,988

2,162

1,787

1,892

2,037

1,721

1,979

2,123

1,806

2,056

2,213

1,866

A

838

860

785

837

842

824

882

873

913

911

904

933

B

2,308

2,411

1,772

2,802

2,939

2,233

3,324

3,513

2,521

2,781

2,904

2,227

C

1,561

1,725

1,255

1,522

1,676

1,238

1,598

1,745

1,317

1,645

1,780

1,369

D

2,914

2,987

2,536

2,625

2,663

2,437

2,815

2,852

2,633

3,049

3,097

2,811

E

1,931

2,027

1,695

1,628

1,756

1,378

1,875

1,899

1,787

1,897

1,899

1,890

F

1,588

1,607

1,462

1,482

1,490

1,427

1,563

1,567

1,534

1,633

1,642

1,564

G

1,476

1,691

1,237

1,416

1,586

1,221

1,492

1,667

1,288

1,526

1,713

1,307

H

2,218

2,433

1,788

2,192

2,387

1,748

2,259

2,433

1,848

2,390

2,572

1,981

I

1,253

1,426

1,101

1,214

1,344

1,083

1,299

1,434

1,162

1,053

1,197

904

J

2,490

2,780

2,017

2,546

2,866

2,011

2,651

2,912

2,192

2,923

3,210

2,420

K

3,423

4,093

2,926

3,152

3,779

2,684

3,425

4,132

2,872

3,674

4,422

3,060

L

1,476

1,659

1,263

1,541

1,725

1,351

1,784

2,121

1,444

1,817

2,174

1,457

M

2,284

2,851

1,899

2,244

2,724

1,896

2,357

2,809

2,011

2,481

2,952

2,099

N

1,471

1,646

1,311

1,535

1,692

1,366

1,687

1,871

1,499

1,882

2,114

1,631

O

2,794

2,899

2,691

2,641

2,646

2,636

2,793

2,809

2,776

2,886

2,914

2,859

P

2,122

3,019

1,733

1,923

2,729

1,579

1,965

2,773

1,617

2,014

2,849

1,666

Q

1,571

2,307

1,407

1,559

2,134

1,380

1,638

2,229

1,446

1,783

2,436

1,562

R

1,709

2,026

1,217

1,605

1,867

1,166

1,781

2,041

1,341

1,834

2,120

1,317

S

1,450

1,850

1,207

1,384

1,726

1,179

1,459

1,813

1,249

1,473

1,831

1,266

Source: Statistical Service of the Republic of Cyprus (data from the records of the Social Insurance Fund)

 

Minimum wages

Cyprus previously did not have a minimum wage at national level that needed to be observed in collective bargaining at sectoral or company level. Instead, based on Chapter 183 of the Minimum Wages Law, national minimum wages and salaries applied to just nine specific occupations: sales staff, clerical workers, auxiliary healthcare staff, auxiliary staff in nursery schools, auxiliary staff in crèches, auxiliary staff in schools, security guards, caretakers and cleaners.

From May 2012 onwards, that is, when the relevant legislation was last renewed, the amount of the minimum wage was set annually by the government in consultation with the social partners, with the minimum fixed at a monthly rate and enforced by a decree of the Council of Ministers.

In accordance with Decree No. 180/2012, which came into effect retroactively from 1 April 2012, the minimum monthly salary for new job entrants in seven of the nine occupational categories (excluding cleaners and security guards) was increased to €870 (from €855 in 2011), while, for employees who had worked for the same employer for six consecutive months, the minimum wage was set at €924 (increasing from €909 in 2011). For the occupational category of cleaners, the minimum hourly rate was set at €4.55 and at €4.84 for employees who had worked for the same employer for six consecutive months, while the minimum hourly rate for the occupational category of security guards was set at €4.90 and €5.20, respectively.

A second decree (Decree No. 6/2020) released by the Council of Ministers in January 2020 set the minimum wage for 13 professions in the hotel industry, with monthly rates ranging from €870 to €1070 and hourly rates ranging from €5.28 to €6.50.

It should be noted that domestic workers from third countries have a minimum wage; it is set out in the mandatory fixed contract that both they and their employer must sign for the foreigner to be allowed to come to Cyprus and work as a domestic worker. For domestic workers, the monthly minimum wage is €460 gross, as employers provide for some of the expenses of the worker, for example lodging.

In 2018, a debate was triggered by a statement of the President of the Republic that his government intended to introduce a statutory national minimum wage applying to all workers and employees in all economic activities once the unemployment rate fell below the 5% margin. In a hearing of the Labour Committee of the House of Representatives, the MLSI revealed that it had already commissioned studies and sought the cooperation of the ILO and the European Commission in this respect. At the beginning of 2021, the relevant studies had been completed. However, at that time, the government suspended the review process because of the increasing rate of unemployment during the course of the COVID-19 crisis.

In 2022, the social dialogue process regarding the national minimum wage was completed (the resulting decree came into effect in 2023). The new decree (which replaced the previous decree that covered only a small number of professions) raised the initial monthly minimum wage to €885 gross, increasing to at least €940 gross after a six-month continuous period of employment with the same employer, and established it as a right for every worker in Cyprus, with the exception of domestic workers from third countries, workers in agriculture and workers in marine shipping. The logic behind the exceptions is that employers in these sectors provide for some of the expenses of the worker, for example lodging. In addition, the decree does not apply to the employees covered by the aforementioned decree relating to minimum wages in the hotel industry (Decree No. 6/2020).

Minimum wage rates apply to all, irrespective of age.

Collectively agreed pay outcomes

As a result of the economic crisis, collective bargaining during 2011–2014 was characterised by abstention and long delays in renewing collective agreements, while many agreements at both sectoral and enterprise levels either were put on hold or reached a deadlock at the stage of direct negotiations or at the stage of mediation. During this time, most of the agreements that were renewed provided for pay freezes or pay cuts.

In the public sector, based on Cyprus’s commitments under all four priority areas of the Euro Plus Pact, the government put forward a number of measures. Specifically, to foster competitiveness, a policy of containment of public sector wages was put forward, including wages in the civil service. In this context, the most important measures that directly affected the wages of employees in the broader public service were the following:

  • a total freeze of wages, salaries and pensions for a period of two years from 1 January 2011 to 31 December 2012 (Law 192(I)/2011)
  • a total freeze of wages, salaries and pensions for a period of four years from 1 January 2013 to 31 December 2016 (Law 185(I)/2012, amending Law 185(I)/2011)
  • a total freeze of payments of COLA – initially, the measure was applied for a period of two years (2011 and 2012) but, with the enactment of Law 185(I)/2012 on 21 December 2012, the measure was extended to cover the period from 1 January 2012 to 31 December 2016
  • a reduction of gross monthly earnings of wages, salaries and pensions, initially for a period of two years from 1 December 2012 to 31 December 2014, with an extension for another two years until the end of 2016

The trade unions were not in favour of the government’s intention to regulate wage increases in the broader public sector through legislation that set upper thresholds for wage increases equal to the annual growth rate of nominal GDP, and the corresponding draft law by the House of Representatives was rejected. This forced the government to withdraw. Both the opposition by the trade unions and the rejection of the draft law by the House of Representatives were justified on the basis of the IRC, which provides for collective bargaining between employer organisations and employee organisations. Thereafter, the government entered into negotiations with the two major trade unions in the country, PEO and SEK. The negotiations resulted in the conclusion of a framework agreement on 4 January 2017 covering the period from 1 January 2015 to 31 December 2018 and applying to all employees in the broader public service (not public servants), that is, employees of local authorities, employees of state-owned enterprises, wage earners of the public service, etc.

The agreement provided for zero wage increases for 2015 and 2016. For 2017 and 2018, the agreement set out the introduction of a mechanism for the determination of upper thresholds of the payroll increase equal to the growth rate of nominal GDP. For the calculation of the upper thresholds, reference periods were agreed that applied to both the payroll and the growth rate of nominal GDP. Under the agreement, any changes in the level of employment would not be taken into consideration for the calculation of the payroll. In practice, the framework agreement paved the way for the negotiation of collective agreements in the broader public sector. Negotiating parties are now obliged to adhere to the limits set by the framework agreement.

The Minister of Finance, Mr Georgiades, negotiated and concluded a similar framework agreement on 6 February 2017 with PASYDY covering public servants. However, PASYDY refrained from demanding wage increases other than COLA and increases due to pay scales.

Soon after the conclusion of the framework agreement, a bipartite technical committee was set up to calculate the upper thresholds within which wage increases were supposed to be negotiated. The technical committee calculated a total threshold of 2.4% for both 2017 and 2018. Thereafter, the unions of the broader public sector requested that negotiations begin for the renewal of the collective agreements and to set the threshold of pay increases or the reduction of pay cuts imposed during the economic crisis to 2%, as a guideline. The Minister of Finance rejected the demands regarding pay increases or pay cut reductions (other demands were accepted). He countered that these demands could not be satisfied at the current stage because of the necessity to maintain the state budget in balance. Even a meeting between the leaders of the two peak trade union confederations and the minister could not lead to a positive outcome. Only when the trade unions – which considered the minister’s stance to be a breach of the framework agreement – called for warning strikes at the beginning of October 2017 did the minister signal his readiness to discuss the demands of the trade unions. In renewed negotiations held in October 2017, a new complementary framework agreement for 2015–2018 was concluded.

The complementary agreement provided for the negotiation of pay increases or the reduction of pay cuts of up to a cumulative 2% for 2017 and 2018. The negotiated deal was completed in the second half of 2018 and also included a gradual elimination of the pay cuts imposed during 2012–2015 by the end of 2022. In late 2020, trade unions of the broader public sector entered into negotiations with the Ministry of Finance for the review of pay for 2019, 2020 and 2021. As the negotiations took place during the COVID-19 crisis, wages were frozen at the 2018 level, with the intention being for possible pay increases or a reduction of pay cuts to be addressed in 2022.

Reinstatement of the cost-of-living allowance from 2018

Wage setting in Cyprus is determined by COLA, which is a wage indexation system, that is, wages increase or decrease according to the movement of the consumer price index. Trade unions have traditionally attached great importance to COLA, as it neutralises the impact of price increases on the purchasing power of wages and has contributed to the conclusion of long-term collective agreements and to labour market peace. COLA was initially introduced in the 1940s for the public sector and from the 1960s onwards also in the private sector. COLA is an integral part of every collective agreement in Cyprus.

As, over the course of the economic crisis, the public finances began to deteriorate, the government concluded, in 2011, an agreement with the broader public sector trade unions that included pay cuts and the suspension of COLA. After the conclusion of the memorandum of understanding between the government of Cyprus and its creditors, the pay cuts and suspension of COLA were expanded to the whole duration of the adjustment programme. In view of the suspension of COLA in the public sector and the contraction of the economy, trade unions ‘silently’ accepted the suspension of COLA also in the private sector in 2013.

On the initiative of the Minister of Labour, Welfare and Social Insurance, an agreement was reached on 28 July 2017 over the reinstatement of COLA. The agreement set out some changes to the COLA terms. The new COLA system was temporary and would be valid from 1 January 2018 to 31 December 2020. The intention of the minister was to use those three years for further consultations with the social partners to conclude a final agreement over COLA and its terms of application.

The agreement for the transitional arrangements on COLA provides for (1) the calculation and disbursement of COLA once a year (1 January), (2) the disbursement of COLA at a reduced rate of 50%, (3) the incorporation of the accumulative COLA rate into basic salaries on 31 December 2017 and the accumulation of the new COLA rate to start from zero and (4) the suspension of COLA in the event of economic contraction in both the second and the third quarters of the preceding year. In view of the COVID-19 crisis, the agreement was extended until the end of 2021.

The agreement applied only in the private sector; however, a similar agreement was also in place for the public sector.

It was not until the final weeks of 2022 that the Minister of Labour, Welfare and Social Insurance began the social dialogue process regarding COLA, with trade unions demanding its complete (even if gradual) restoration and employer organisations demanding its abolition or at least the establishment of the present transitional arrangements as the final and permanent form. The dispute, which sparked a three-hour Pancyprian work stoppage, is still ongoing, with the new Minister (after the presidential elections of February 2023) restarting the social dialogue process with the social partners.

Working time is ‘any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises the regulation of and issues regarding working time, overtime, part-time work and working time flexibility in Cyprus.

Working time regulation

Prior to the accession of Cyprus to the EU in 2004, working time was regulated either in collective agreements or by an agreement between the employer and the employee.

With the transposition of EU legislation, specifically the enactment of Law 63(I)/2002 on the organisation of working time, the main aspects of working time, such as the maximum working week and rest periods, are now provided for by legislation. However, the working time legislation in Cyprus does not provide a definition of the statutory normal working week. The legislation determines only upper thresholds for the working week, including overtime, which is set at 48 hours.

Overtime regulation

Overtime is regulated either in collective agreements or by an agreement between the employer and the employee, but the total working week, including overtime, is set at 48 hours, as provided for by Law 63(I)/2002.

As a result of the economic and financial crisis (2012-2015), a number of agreements were put in place for changes to the manner of compensating overtime. Specifically, in most cases, there was a reduction in the rate of compensation for overtime from double the usual rate to 1.5 times the usual rate, or from 1.5 times to 1.25 times the usual rate. In a number of cases, the threshold of total time worked, above which compensation is paid for overtime, was increased from 38 to 40 hours a week. In addition, in a number of cases, differences in compensation were introduced for holidays and for weekend working. Renegotiations of derogations from collective agreements as far as overtime pay is concerned have been taking place over the last five years on the initiative of trade unions, with the aim of returning to the normal provisions of collective agreements. According to information from trade unions in 2020, the great majority of these special arrangements no longer exist.

Part-time work

As far as flexible forms of employment are concerned, although no analyses in this regard have been made to date, from the statistical data on part-time work in the EU27, it seems that part-time work increased during the recent economic crisis (2012–2014), reaching a peak of 13.3%. With the return of the Cyprus economy to positive growth rates (2015–2019), part-time employment returned almost to pre-crisis levels.

Although part-time employment continues to be more frequent among female employees, over the years of the economic crisis an increase in part-time work was also observed among men. More specifically, part-time employment among men increased from 6.3% in 2012 to 11.2% in 2016, but then fell to 7.4% in 2018 and 6.1% in 2019, while part-time employment among women increased from 12.8% in 2012 to 15.5% in 2017 and then fell to 14.4% in 2019. The main reason for the overall increase from 2012 to 2019 (when considering both men and women together) of 0.7 percentage points is attributed to the scarcity of full-time jobs during this time. In 2020–2022, the downwards trend that was beginning to be seen around 2018–2019 continued, with part-time work decreasing to a lower level than in 2012 for the first time in a decade, mainly due to the decrease in women working part-time.

The definition of part-time employees is given in the Part-time Employees (Prohibition of Discriminatory Treatment) Law of 2002 (Law 76(I)/2002): an employee whose working hours are calculated on a weekly basis or whose average working hours over an employment period of a year are less than the normal working hours of a comparable full-time employee.

Night work

The night period is the period beginning at 23:00 and ending at 06:00, and a night worker is a worker who works, on a regular basis, at least three hours of their daily working time during the night period.

Shift work

Shift work is defined as any method of organising work in shifts whereby workers succeed each other at the same workplace according to a certain pattern, including a rotating pattern, and which may be continuous or discontinuous, entailing the need for workers to work at different times over a given period of days or weeks (this definition is the same as in the EU Working Time Directive).

Weekend work

In Cyprus, there is no definition of the weekend, there is only a definition for the week – that is, the time period beginning at 00:01 of Monday and ending at 24:00 of the following Sunday.

Rest and breaks

‘Rest period’ refers to any period that is not working time (this definition is the same as in the EU Working Time Directive). Every worker must have a daily rest time of at least 11 continuous hours in every 24 hours, with the 24 hours beginning at 00:01 and ending at 24:00. Every worker is entitled to a 15-minute break if their daily working time is more than six hours. Every worker is entitled to a continuous weekly rest time of 24 hours; if it is necessary because of the work objective, for technical reasons or because of the organisational conditions of work, the rest time may be set at two continuous periods of 24 hours or a single continuous period of 48 hours within a period of 14 days.

Working time flexibility

As far as a worker’s autonomy to change working time is concerned, there are no available statistical indicators to allow for a comparison through the years. Nevertheless, according to the results of a European Union Labour Force Survey (EU-LFS) ad hoc module on reconciliation between work and family life, it is apparent that workers in Cyprus have a low degree of control over their working time schedule. Specifically, 82.0% of employees (83.2% for men and 80.7% for women) had a working time schedule that was decided by their employer, with fixed start and end times of their working day without any possible alterations by the employee. Some 5.4% of employees (5.7% for men and 5.0% for women) determined their own work schedule with no formal boundaries at all, while 6.2% (5.7% for men and 7.4% for women) had their daily number of hours fixed but with some flexibility within the day. This specific ad hoc module was part of the EU-LFS for 2010; it covered only April–June (the second quarter) and the target population was people aged 15–64 years.

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity through the ill health of their workers. This section looks at psychosocial risks and health and safety at work in Cyprus.

Health and safety at work

The main law in Cyprus regulating health and safety at work is the Health and Safety at Work Law of 1996, as amended in 2015 (Law 89(I)/1996), which sets out the basic framework. Further laws and regulations on health and safety for particular activities or for activities dealing with dangerous agents complement and extend the scope of the basic framework. The main features of the legislation are the determination of employers’ and self-employed people’s responsibilities and general duties, general principles for risk prevention and the obligation of employers and self-employed people to prepare a written risk assessment and to design a risk management system. In addition, the legislation provides for consultations of employees, the setting up of safety committees, the introduction of a health and safety register and the notification of work accidents and occupational diseases. Failure to comply with the legal obligations is punishable by imprisonment of up to two years, by a fine not exceeding €17,086 or by both penalties.

Employers’ liability is provided by a special legislation, the Employers’ Liability (Compulsory Insurance) Law of 1989, as amended in 2014 (Law 174(I)1989), according to which an employer is liable in the case of an accident or occupational diseases for all their employees in Cyprus and for all Cypriot employees of an employer with operations abroad, provided that they are permanent residents of Cyprus.

The Department of Labour Inspection is in charge of monitoring all health and safety legislation. The department is currently implementing a gradual action plan for the establishment and operation of a system for the supervision of workers’ health. In this context, the Regulations on Health and Safety at Work (Supervision of Health) were enacted by the House of Representatives in October 2017. The regulations set out regular medical examinations for workers and employees in asbestos- and port-related activities. The regulations will be extended in the future to further professional activities.

Accidents at work resulting in four days’ absence or more – working days lost

Since 2008, there has been a decreasing trend in the total number of accidents resulting in four or more days lost. In 2016, a total of 1,634 accidents occurred, compared with 1,747 in 2011, while, during the same period, the number of accidents per 1,000 employees decreased from 5.4 in 2011 to 5.3 in 2016. In 2019, there was a sharp rise in the number of accidents resulting in four or more days lost, reaching a total of 1,943; however, in 2020, there was a significant drop to 1,343 (presumably due to the pandemic and the associated lockdowns, and especially because contracting COVID-19 while working is not considered a work-related accident).

Work-related accidents, 2009–2020

 

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Total number of accidents

1,960

1,913

1,747

1,511

1,301

1,359

1,377

1,634

1,803

1,887

1,943

1,343

Change from the previous year (%)

-7.9

-2.4

-8.7

-13.5

-13.9

4.5

1.3

18.7

10.3

4.7

3.0

-30.9

Accidents per 1,000 employees

6.4

5.9

5.4

4.7

4.3

4.6

4.5

5.3

5.5

5.4

5.4

3.6

Source: Eurostat, [hsw_mi01] and [lfsa_eegaed]

 

Psychosocial risks

Apart from Law 89(I)/1996, as amended in 2015, on safety and health at work, there is no specific legislation in place addressing psychosocial risks at work.

No recent studies have been conducted in relation to psychological risks at work. The results of the most recent national-level study on the situation in Cyprus regarding the physical and mental disorders of working people have not been updated and, according to information from the Department of Labour Inspection at the MLSI, due to a decrease in funds provided for research, no action is expected to be taken in this regard in the coming years.

Skills are the passport to employment; the more highly skilled an individual, the more employable they are. People with good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises the Cypriot system for ensuring skills and employability and looks at training provision.

National system for ensuring skills and employability

The Standards of Vocational Qualification (SVQs) in Cyprus were first implemented in 2007 as a co-funded project of the European Social Fund and the HRDA for the programme period 2007–2013. The HRDA is the responsible authority for the design and development of the occupational profiles to assess the candidates and award the certificates of vocational qualification.

It is important to mention that the SVQs are developed with the involvement of tripartite sectoral technical committees including social partners, stakeholders from the sector concerned, scientists, representatives of professional associations, etc.

Until recently, the HRDA had completed the development of 72 occupational profiles at various levels (1–4) in seven priority sectors of economic activity and in relation to the provision of vocational training. The HRDA has developed during the programme period 2014–2020 another 167 profiles of levels 4–6.

So far, the HRDA has prepared all of the necessary mechanisms and is able to award certificates of vocational qualifications to candidates in two sectors: the hotel and catering sector and the provision of vocational training.

Almost every year, the HRDA offers more programmes; in 2022, the HRDA provided the following programmes for lifelong learning and skills development:

  • vocational training programmes for unemployed people
  • a vocational training scheme for long-term unemployed people in companies/organisations
  • a business staffing scheme for graduates of tertiary education
  • a special vocational training scheme for unemployed people in public and wider public sector organisations, local government authorities, non-governmental organisations and not-for-profit institutions
  • single business training programmes in Cyprus
  • single business training programmes abroad
  • continuing training programmes for trade union officials
  • an e-learning supplement

In addition to the above programmes from earlier years, in 2022 the HRDA initiated four new programmes:

  • a digital skills vocational training programme
  • a training programme for the acquisition of knowledge and skills related to the green economy
  • a training programme for the acquisition of knowledge and skills related to the blue economy
  • a training programme for the acquisition of entrepreneurial knowledge and skills

It is important to note that, for most of the programmes from earlier years, the budget, the number of positions available and the actual participation in 2022 all increased significantly compared with 2021, despite actual participation being much lower than the available positions.

Finally, the HRDA has recently launched the ERMIS (Hermes) online portal, which provides electronic access to the services of the HRDA.

Training

Law 125(I)/1999, as amended up to 2007 (Law 52(I)/2006 and Law 21(I)/2007), provides for the establishment of the HRDA as the only authority with competence and power in the field of training, including continuous vocational training, although no explicit reference is made to it. It is mentioned that the HRDA is an organisation of tripartite representation.

The HRDA’s mission is to create the necessary prerequisites for the planned and systematic training and development of Cyprus’s human resources, at all levels and in all sectors, for meeting the economy’s needs, within overall socioeconomic policies.

For the accomplishment of its mission and to be able to exercise its competencies and powers, the HRDA is funded by the Human Resource Development Fund (Ταμείο Ανάπτυξης Ανθρώπινου Δυναμικού). Every employer is obliged to pay a levy to the fund not exceeding 1% of the emoluments of each of their employees as may be specified from time to time. The government is exempted from this obligation.

The principle of equal treatment requires that all people – and, in the context of the workplace, all workers – have the right to receive the same treatment, and will not be discriminated against on the basis of criteria such as age, sex, disability, nationality, race and religion.

The most important legislation for equality and non-discrimination at work is:

  • the UN Convention on the Elimination of All Forms of Racial Discrimination (Ratification) (Law No. 13 of 1967, as amended)
  • the UN Convention on the Elimination of All Forms of Racial Discrimination against Women (Ratification) (Law No. 78 of 1985)
  • the Penal Code (Cap. 154), as amended
  • the Equal Treatment between Men and Women in Employment and Vocational Training Law of 2002 and 2006
  • the Equal Treatment (Racial or Ethnic Origin) Law (Law 59(I) of 2004)
  • the Equal Treatment in Employment and Occupation Law (Law 58(I) of 2004)
  • the Persons with Disabilities (Amendment) Law (Law 57(I) of 2004)
  • the Combating of Racism and Other Discrimination (Commissioner) Law (Law 42(I) of 2004)
  • the Commissioner for Administration (Amendment) Law (Law 36(I) of 2004)

In addition to the competent authorities that are responsible for monitoring and implementing the above legislation, a number of different bodies have been established to promote equality and combat and/or prevent discrimination, according to their specific sphere of competence. Among the most important are the following:

  • the Ombudsman/Anti-Discrimination Body and Equal Treatment Authority (Επίτροπος Διοικήσεως / Φορέας Ισότητας και Καταπολέμησης των Διακρίσεων)
  • the National Machinery for Women’s Rights (Εθνικός Μηχανισμός για τα Δικαιώματα της Γυναίκας)
  • the Gender Equality Committee in Employment and Vocational Training (Επιτροπή Ισότητας των Φύλων στην Απασχόληση και στην Επαγγελματική Κατάρτιση)
  • the Multidisciplinary Coordinating Group for Combating Trafficking in Human Beings that is chaired by the Minister of Interiors (Πολυθεματική Συντονιστική Ομάδα κατά της Εμπορίας Προσώπων)
  • the National Certification Body for the Implementation of Good Practices on Gender Equality in the Working Environment (Εθνικός Φορέας Πιστοποίησης Επιχειρήσεων για την Εφαρμογή καλών Πρακτικών για την Ισότητα των Φύλων στο Εργασιακό Περιβάλλο)
  • the National Demographic and Family Body (Εθνικός Φορέας Δημογραφικής και Οικογενειακής Πολιτικής)
  • the Advisory Committee for the Prevention and Handling of Violence in the Family (Συμβουλευτική Επιτροπή για την Πρόληψη και Καταπολέμηση της Βίας στην Οικογένεια)

Equal pay and gender pay gap

The gender pay gap (GPG) in Cyprus was particularly high between 2002 and 2007 at more than 20%. Thereafter, the GPG began shrinking: 19.5% in 2008, 10.4% in 2019 and 9% in 2022. This reduction, however, is largely attributed to the recent economic crisis, namely the dramatic reduction in pay in certain male-dominated economic activities, such as construction.

At national level, the main statistical sources allowing for the calculation of the unadjusted GPG are the EU-LFS and the Structure of Earnings Survey.

On the legislative front, the most important development since 2009 was the introduction of Law 38(I)/2009, which amended the laws of 2002–2004 on equal pay between men and women for the same work or for work of equal value. It was passed to harmonise national legislation with European legislation, notably Council Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, and also for the purpose of complying with Article 20 of the revised European Social Charter.

Since 2008, the MLSI has put forward a series of policy measures seeking to reduce the GPG (Eurofound, 2007). The specific policy measures were decided on the basis of the conclusions of a study entitled ‘Analysis of the pay gap between men and women in Cyprus and practical recommendations for reducing it’, commissioned by the ministry and carried out by the Institute for Social Innovation (Ινστιτούτο Κοινωνικής Κανοτομίας). They were implemented under the operational programme of employment, human capital and social cohesion (unofficial English translation) for 2007–2013.

The DLR implemented, from 2010 to 2015, a project entitled ‘Actions for reducing the gender pay gap’. The project was financed by the European Structural Funds and aimed to improve inspection mechanisms for equal pay legislation and to establish a national gender equality certification body. The latter required a procedure for the certification of enterprises that adhere to the gender equality legislation. The procedure included offering guidance to enterprises willing to be certified. As of February 2024, the certification process is ongoing.

Quota regulations

Article 3 of Law 146(I)/2009 on the recruitment of people with disabilities in the broader public sector (special provisions) provides that people with disabilities must make up 10% of those hired for employment positions in the wider public sector (public services, semi-governmental organisations and local authorities). However, this is conditional: the number of people with disabilities hired under this legislation must not exceed 7% of the total number of workers on 31 December of the preceding year or, in educational settings, on 1 September of the preceding year. The appointed staff with disabilities must fulfil cumulatively the following objective requirements:

  • have the necessary qualifications required for the employment position
  • have succeeded in any written or oral examinations required
  • be appropriate for the execution of the duties of the vacancy, as judged by the competent appointing body, which is obliged to take into consideration the report of the special multidisciplinary commission, drawn up in accordance with the provisions of Article 6 of Law 146(I)/2009

No information is available on the achievement of the quotas established by Law146(I)/2009.

DLR (Department of Labour Relations) (undated), Labour disputes statistics, web page, accessed 5 February 2024.

Eurofound (2007), ‘New findings on gender pay gap’, news article, 23 September.

Eurofound (2020a), Collective agreements and bargaining coverage in the EU: A mapping of types, regulations and first findings from the European Company Survey 2019, Eurofound working paper, Dublin.

Eurofound (2020b), Employee representation at establishment or company level: A mapping report ahead of the 4th European Company Survey, Eurofound working paper, Dublin.

Eurofound (2020c), Industrial relations: Developments 2015–2019, Challenges and prospects in the EU series, Publications Office of the European Union, Luxembourg.

Eurofound (2020d), Minimum wages in 2020: Annual review, Minimum wages in the EU series, Publications Office of the European Union, Luxembourg.

Eurofound (2021), Working conditions and sustainable work: An analysis using the job quality framework, Challenges and prospects in the EU series, Publications Office of the European Union, Luxembourg.

Eurofound and Cedefop (European Centre for the Development of Vocational Training) (2020), European Company Survey 2019: Workplace practices unlocking employee potential, European Company Survey 2019 series, Publications Office of the European Union, Luxembourg.

European Commission (2014), Cyprus national reform programme 2014: Europe 2020 strategy for: Smart, sustainable and inclusive growth, Brussels.

European Commission (2015a), European economic forecast spring 2015, Brussels.

European Commission (2015b), Cyprus national reform programme 2015: Europe 2020 strategy for smart, sustainable and inclusive growth, Brussels.

European Commission (undated), ‘The European Semester’,  web page, accessed 5 February 2024.

Eurostat (2020), EU Labour Force Survey ad hoc module 2019 on work organisation and working time arrangements – Quality assessment report, Publications Office of the European Union, Luxembourg.

Government of Cyprus (1977), Industrial Relations Code, Department of Labour Relations, Nicosia.

Government of Cyprus (2015), Action plan ‘A new growth model for Cyprus’, Administrative Reform Unit, Nicosia.

Kapartis, C. (2003), Social dialogue and social systems: The case of Cyprus, European Commission, MEDA Programme, Brussels.

MLSI (Ministry of Labour, Welfare and Social Insurance) (undated), Termination of employment guide, Press and Information Office, Nicosia.

OECD (Organisation for Economic Co-operation and Development) and AIAS (Amsterdam Institute for Advanced Labour Studies) (2021), OECD/AIAS ICTWSS database, version 17, February, Paris.

Public Employment Service of Cyprus (2008), Employment guide, Department of Labour, Ministry of Labour and Social Insurance, Nicosia.

Sparsis, M. (1998), Tripartism and industrial relations: The Cyprus experience, Nicosia.

Yannakourou, M. and Soumeli, E. (2004), The evolving structure of collective bargaining (1990–2004): National report – Greece and Cyprus, European Commission, Brussels, and University of Florence, Florence.

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