Agreement regulates settlement of labour disputes in essential services

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In March 2004, a tripartite agreement on the procedure for resolving labour disputes in essential services was signed in Cyprus, following nearly a decade of discussions. The accord introduces an arbitration procedure in such disputes but does not rule out industrial action.

After nine years of consultations and unsuccessful efforts, the government, trade unions and employers' organisations signed an agreement on the procedure for settling labour disputes in essential services on 16 March 2004. The signatories to the agreement were: on the government side, the Ministry of Labour and Social Insurance; on the trade union side, the Pancyprian Federation of Labour (PEO) and the Cyprus Workers' Confederation (SEK); and on the employer side, (CY0310101F) the Employers and Industrialists Federation (OEB) and the Cyprus Chamber of Commerce and Industry (KEBE). The agreement was also approved by the Democratic Labour Federation of Cyprus (DEOK). Perhaps the most fundamental element of the agreement is that it does not prohibit strikes in essential services.

Historical context

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 by former governments to regulate the matter through legislation reaching a deadlock. According to the Minister of Labour, Makis Keravnos, previous governments were not able to exhibit the necessary political will to resolve the issue, and at the same time there were differing opinions and approaches on how to regulate it. The failure to reach agreement was basically due to disagreement among the trade unions - PEO, SEK and the Pancyprian Public Servants Trade Union (PASYDY) - about the need for legislative regulation.

In 1995, the Ministry of Labour amended a previously issued first draft bill, following the recommendations of an International Labour Office (ILO) expert, who took part at the request of the trade unions. However, although the unions acknowledged that improvements were made to the first draft, no agreement was reached because the unions insisted on settling the issue through a voluntary agreement. To that end, in September 1999, after four years of bargaining, PEO, SEK, PASYDY and OEB submitted to the cabinet a draft voluntary agreement, as an extension of the Industrial Relations Code, and expressed their willingness to discuss the adoption of legislative measures on individual issues in this area. The Ministry of Labour, as an indication of goodwill and in an attempt to deal with the reactions of KEBE, which insisted on a legislative approach, submitted a third draft bill that was a combination of the legislative measures and the draft voluntary agreement. The unions failed to approve the new draft bill, and the dialogue officially reached a deadlock on 19 October 2000. On 3 April 2002, the government submitted the draft bill/agreement to the House of Representatives, but it was not voted on and was finally withdrawn by the new government in April 2003.

Content of the agreement

In the new agreement on the procedure for the settlement of labour disputes in essential services, which came into effect when it was signed on 16 March 2004, 'essential services' mean services whose interruption would place the lives, personal safety or health of all or part of the population at risk. Specifically defined as essential services in the agreement are those services, works, projects or activities considered to be necessary for:

  • ensuring a constant supply of electricity;
  • ensuring water supply;
  • ensuring the operation of telecommunications;
  • safe operation of air transport and air traffic control;
  • operation of hospitals;
  • operation of prisons;
  • repair or maintenance of equipment and electrical/mechanical installations of the National Guard and the police, including the fire brigade; and
  • safe operation of port traffic

The procedure provided for in the agreement will be put into effect after a deadlock has been declared in talks in such essential services, in accordance with the existing provisions of the Industrial Relations Code.

Article 3 of the accord stipulates that when bargaining is held over either the conclusion of a collective agreement for the first time or the renewal of a collective agreement, and if it is seen that all scope for bargaining on the basis of the existing procedures for the relevant sector has been exhausted, by declaring a deadlock the two sides are obliged to refer the dispute to an Arbitration Committee and make their decision known to the Minister of Labour and Social Insurance. The referral to the committee is made either jointly or separately.

The Arbitration Committee is made up of people who are mutually acceptable to both sides. The Committee deals with disputes referred to it by the Minister of Labour for investigation, examination and issuing of a decision. More specifically, the agreement provides that, within 15 days after a deadlock is declared, the Minister of Labour and Social Insurance, after consulting with the parties concerned, will proceed to appoint an Arbitration Committee with three members, one of whom is appointed as its chair. The members of the Committee are selected from a list, which remains in force for a period of two years. Two months before the list expires, each side is entitled to request that it be reviewed. The members appointed to the Committee should, among other conditions defined in the agreement, have extensive knowledge and experience in the settlement of labour disputes, and should have no direct or indirect interest in the dispute. In order to carry out the Committee’s work, its members may use any means they regard as necessary or useful.

In terms of procedure, the Arbitration Committee must, within six weeks of the time the dispute is referred to it, issue a decision which is made public but is not binding on the two sides. The sides must within seven days respond in writing to the Minister saying whether they accept the relevant decision or not. If they reject the decision, they must substantiate their reasons for doing so. If the Committee’s decision is rejected or if for any reason the Committee fails to issue a decision within the deadline that has been set, strike action may be taken 25 days after notification is given in writing. In the event of a strike, a minimum service must be expressly implemented, with special workplace committees appointed that are responsible for dealing with any emergency problems that may arise. The parties to the agreement accept the interpretation given to the term 'minimum service' by the International Labour Office. Thus, according to Article 1, paragraph 1.5, of the agreement minimum service means 'service provided which is limited to the operations that are strictly necessary to meet basic needs of the population or the minimum requirements of the service, while maintaining the effectiveness of the pressure brought to bear by means of the strike'.

According to the Minister of Labour, to achieve the uniform regulation of this issue in the public, semi-public and private sectors, the new agreement should also be transposed into the statutes of the Joint Staff Committee, which regulates the labour disputes settlement procedure in the public sector. The Minister of Finance, Markos Kyprianou, has already been informed in this regard. It is also pointed out that, 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.


The new agreement on the regulation of the right to strike in essential services puts into practice a commitment of the new government and a long-standing demand of the social partners. In the opinion of the Ministry of Labour and Social Insurance, this agreement forms part of a set of interventions aimed at modernising the country’s labour institutions. The achievement of a consensus after almost 10 years of consultations, and in particular the overcoming of differences regarding the manner of regulation, highlight the importance of the tripartite cooperation and the institution of social dialogue, and show that despite its voluntary nature the current industrial relations system in Cyprus can be particularly effective. (Eva Soumeli, INEK/PEO)

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