Bargaining for new agreement in hotel industry gets under way

In May 2006, bargaining for the renewal of the collective labour agreement in the hotel industry began. The new demands submitted by the trade unions and the employer organisations, including pay and non-pay related elements, have been discussed.

Submission of demands

In May 2006, bargaining began for the renewal of the collective labour agreement (SSE) in the hotel industry, which expired on 31 March 2006. The framework of demands for the new agreement covers about 16,000 workers and includes both pay and non-pay elements.

Unlike the situation in the previous agreement (CY0410101N), the two main employer organisations – the Pancyprian Association of Hoteliers (PASYXE) and the Association of Cyprus Tourist Enterprises (STEK) – submitted separate recommendations instead of a joint framework of demands. Their failure to agree on a jointly accepted position is one of the reasons why the two organisations did not submit their demands until 13 April 2006.

On the basis of the Industrial Relations Code, the two sides are supposed to submit their demands at least two months before the SSE expires. This condition was met by the trade unions representing the sector’s employees: the Union of Hotel and Recreational Establishment Employees (SYXKA-PEO), affiliated to the Pancyprian Federation of Labour (PEO), and the Federation of Hotel Industry Employees (OUXEB-SEK), affiliated to the Cyprus Workers’ Confederation (SEK), which submitted their joint demands on 23 February 2006.

In a letter to PEO and SEK, PASYXE stated that it was late because it intended to submit demands jointly with STEK; STEK, however, no longer wanted to do so. As a result, direct bargaining is being conducted between the trade unions and each employer organisation separately. A series of meetings were scheduled, beginning as follows:

• on 3 May 2006, the first meeting was held between PEO, SEK and STEK.

• on 9 May 2006, a second meeting was held between PEO, SEK and PASYXE.

• on 10 May 2006, a third meeting was held – again, between PEO, SEK and STEK.

Pay demands

PEO and SEK are seeking an overall increase of around 3.2% in basic pay over the two years that the agreement will be in effect. The most important pay demand involves the stipulation concerning the minimum wage for newly hired workers. The unions are demanding that the minimum pay structure established in 1998 should be abolished and replaced by only one minimum wage level in each step of the pay scale, rather than two levels, as is the case today. In the unions’ view, the existence of two minimum wage levels – one for newly hired workers and one for existing employees – has led to the creation of two categories of workers and an extensive wage gap that is difficult to bridge. In addition, they are demanding that the minimum starting wage should be increased on 1 April of each year by an amount equal to the increase granted in each step of the pay scale.

In relation to the wages paid to trainee hotel workers, the unions are seeking a 15% increase in their minimum pay; these workers are covered by the SSE since the signing of a special agreement on 3 July 2003.

With regard to payment for work performed on rest days and holidays, the unions demand that employees who work on the rest days and holidays stipulated in the SSE should receive either two days’ additional pay at the end of the month or one day’s additional pay and a day off in lieu, in addition to the two weekly rest days and annual leave. The days off resulting from work on holidays and rest days must be granted each year between 1 November and 31 March of the following year. Alternatively, monetary payment must be made before the end of May on an individual basis. In relation to payment for Sunday work, the remuneration must be paid to the employee concerned at the end of each month and may not in any circumstances be granted as time off.

Although the industry’s two employer organisations submitted separate, quite different demands, they both wish to limit pay increases. STEK estimates that the cost of the demands submitted by the unions will amount to an average increase in basic pay of almost 9%, or more specifically, a 4.26% increase from 1 April 2006 and a 4.58% increase from 1 April 2007. In relation to pay scales, STEK is seeking new minimum levels for newly hired staff in the industry; however, it has not yet made any specific recommendations in this respect. It also recommends that the pay of students from hotel training schools who are partaking in on-the-job training should be subject to bargaining to ensure that the best interests of both sides are served in a fair manner.

Meanwhile, PASYXE is proposing the introduction of a maximum wage level at all steps of the pay scale set out in the SSE, in order to protect both employers and workers. The organisation also recommends the introduction of a ‘trainee’ status for a 12-month period with a minimum wage bracket of CYP 85 (approximately €146) per week. It should be noted that, based on the previous SSE, the minimum wage for new entrants is CYP 97 (approximately €167) per week – nearly 13% higher than the wage proposed for workers with a trainee status.

In relation to basic pay increases, PASYXE is demanding a wage freeze for the next two years, whereby any increase granted will be calculated on the basis of productivity in the hotel industry and will be implemented at the beginning of the third year. At the same time, following consultation with employees in hotels in mountainous regions, PASYXE is demanding that certain additional allowances should not be granted, such as the allowance for split working days or work on Sundays, holidays and rest days. According to PASYXE, this is because hotels in mountainous areas have low occupancy rates and are thus less profitable.

Non-pay demands

The most significant union demands in relation to non-pay issues concern staff structuring and the introduction of new occupations in the pay scale set out in the SSE. As regards staff structuring, the unions have reintroduced a previous demand aimed at creating more permanent, secure jobs in the sector by devising a staffing structure based on the number of beds and category of hotel. For example, if an employer intends to hire additional workers to meet temporary needs, the unions demand that the employer enter into dialogue with them before hiring such staff. Despite the fact that the employer organisations have not yet taken a definite stance on this matter, they appear to be strongly opposed to the recommendation, arguing that such matters fall within the scope of management (CY0407102F).

At the same time, the unions also demand the inclusion of new occupations in the pay scales of the revised SSE – specifically the occupations of swimming pool maintenance staff, spa staff, trainers, kindergarten teachers, sales staff and hairdressers. This recommendation relates to a demand on which little progress was made in the previous agreement.

Other union demands concern the incorporation of specific EU directives into the SSE, the need to codify the SSE and the issue of ‘fraternal solidarity’ in the case of an employee’s death in a hotel where staff are organised in unions.

Commentary

Although bargaining has begun on the renewal of the SSE for hotels, the opposing views of employers and employees may once again lead to a labour dispute. To date, at least, PEO and SEK have refused to take part in any dialogue concerning the proposals of the employer organisations; in turn, the employers have rejected almost all of the demands submitted by the unions. These difficulties are compounded by the fact that bargaining has to be conducted with each employer organisation separately. Two more meetings were scheduled to take place on 19 and 26 May 2006.

Evangelia Soumeli and Despo Achilleos, Cyprus Labour Institute (INEK/PEO)