Bargaining deadlocked in metalworking industry

In November 2010, the Cypriot Ministry of Labour and Social Insurance declared a deadlock in a labour dispute that had arisen over the renewal of a collective labour agreement in the metalworking industry. The deadlock emerged after the employer side rejected the ministry’s mediation proposal. Representatives of employers were locked in a serious dispute with the trade unions on the pay-related part of the agreement which could, ultimately, lead to strike action.

On 22 November 2010, the Department of Labour Relations of the Ministry of Labour and Social Insurance declared a deadlock in a labour dispute that had arisen over the renewal process for a collective labour agreement in the metalworking industry.

The dispute resulted from the inability of the two sides to agree to renew the agreement through direct bargaining, and also because the employer side had rejected a mediation proposal from the Department of Labour Relations.

The most recent sectoral agreement, which covers around 6,000 skilled and unskilled workers, expired on 31 December 2009.

Pay rises as a basic point of disagreement

As regards the content of the agreement, the basic point of disagreement between the two sides involves pay – specifically increases in the level of basic pay.

On 16 December 2009, the Federation of Industrial Workers of Cyprus (OVIEK), affiliated to the Cyprus Workers’ Confederation (SEK), and the Cyprus Metalworkers, Mechanics and Electricians’ Trade Union (SΕΜΜΗΚ), affiliated to the Pancyprian Federation of Labour (PEO), submitted demands for pay increases of around 2% for 2010 and another 2% for 2011.

However, according to the framework of demands of the employer side, as submitted on 14 December 2009 by the Cyprus Metalworking Industry Employers’ Association (SYMEVIK), a member of the Cyprus Employers and Industrialists Federation (OEB), the employers are counter-proposing that no pay increases be granted in either of the two years.

Mediation proposal

As part of the mediation procedure, in an attempt to achieve consensus at least on the basic terms of the agreement, the Ministry of Labour and Social Insurance has proposed the renewal of the agreement on a three-year rather than a two-year basis, and the granting of across-the-board increases of not more than 3% for the whole three-year period; however, this proposal was rejected by the employer side. According to SYMEVIK, the financial crisis that has been plaguing the Cypriot economy since 2009 does not allow for any pay increases, particularly in the metalworking sector.

According to SYMEVIK, businesses, particularly SYMEVIK members, are facing severe problems caused mainly by unfair competition from foreign enterprises whose costs are low, and also by the attendant decrease in turnover.

The councils of the two trade union organisations OVIEK and SEMMHK held a meeting on 29 November 2010 in an attempt to re-evaluate the situation and maintain industrial peace in the sector. They asked SYMEVIK to re-examine its position and accept the ministry’s mediation proposal, so that workers and employers could jointly resolve the most serious problems faced by the sector.

In this context, the two unions stress that the workers had accepted the mediation proposal not on the basis of any improvement it would make to their standard of living, but as a gesture of goodwill in conditions of financial crisis, and as an indication that they recognised the efforts being made by the employers to avoid dismissals.

Commentary

It appears that the deadlock over signing a renewal of the collective labour agreement in the metalworking industry was unavoidable, both at the stage of direct bargaining between the sides and also at the mediation stage. The main reason for this is that the two sides adopted diametrically opposed positions from the start in relation to the pay-related part of the agreement, in particular the granting of pay increases.

The stance taken by OEB towards its member SYMEVIK is deemed to be of decisive importance for the final acceptance of the mediation proposal by the employer side, since the other member associations of OEB have already signed agreements with similar content in other sectors of economic activity. However, because of the effects of the financial crisis on the Cypriot economy, it seems likely that pay rises will be the subject of social dialogue in other sectors of economic activity as well.

If SYMEVIK fails to revise its rejection of the pay increases, the unions are determined to take direct strike action, and the possibility that the employer side will proceed to a lockout cannot be ruled out. Trade unions already called a 24-hour strike for 18 January 2011.

Eva Soumeli, Cyprus Labour Institute (INEK/PEO)

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