Strike action suspended nationwide

In December 2010, most of the trade unions in Cyprus called off planned strike action after reaching a framework agreement with the Minister of Finance over proposed fiscal recovery measures. The most representative trade unions in the public and private sector, with the exception of the education unions, called off strikes that had been announced for mid-December. However, government measures were due to be re-examined in late January 2011.

Agreement reached

At an all-trade union congress held on 13 December 2010, the leaders of the Pancyprian Public Employees’ Trade Union (PASYDY), the Pancyprian Federation of Labour (PEO) and the Cyprus Workers’ Confederation (SEK) proposed that strikes that had been announced for mid-December 2010 be called off. The decision came after a framework agreement was reached on the same day between the Minister of Finance and the three unions.

The proposal to suspend the strikes – including a 24-hour strike in the public sector that had been scheduled for 16 December 2010 – was approved by almost all 14 organisations taking part in the congress, with the exception of organisations active in the area of education.

Specifically, the Organisation of Secondary School Teachers of Cyprus (OELMEK), the Association of Teachers of Technical Education (OLTEK) and the Pancyprian Greek Teachers’ Organisation (POED), which represent the vast majority of employees in education, claimed there was not enough time for their members to approve the relevant decision. Therefore, they went ahead with a planned two-hour work stoppage in all the country’s schools on 14 December 2010.

Reasons for the crisis

The trade unions were opposing the government’s intention to take forward a package of fiscal recovery measures, without any prior social dialogue. The whole package of measures, amounting to €250 million, includes 5% value-added tax (VAT) to be levied on medicines and food, which had not previously been subject to VAT, and an increase in VAT on tobacco products. Fewer jobs and lower operating costs in the public sector were also foreseen.

The unions are diametrically opposed to a draft bill that has been submitted on public sector pensions, according to which the pension levels will be calculated not on the basis of salary at retirement but on the basis of average pay for the last two years before retirement.

Again with regard to the public sector, although the government has announced its intention to save €35 million from the state payroll, it has not created specific proposals. It has given assurances that no provision will be made for lower pay, but rather for a slower rate of pay increases.

Content of agreement

The framework agreement reached between the government and the three unions – PASYDY, PEO and SEK – covers three basic points, which essentially indicate the direction in which the government will be moving, rather than the government measures as such. The agreement includes the following provisions.

  • Issues affecting benefits and acquired rights of workers will be resolved through dialogue with the social partners, in accordance with the provisions of the collective labour agreements and the existing statutory framework, and not through legislation.
  • The government is committed to reinstating measures for taxation of wealth, so that the wealthy contribute more towards increasing public revenues.
  • The government is committed to diversifying its policy with regard to fiscal recovery measures, based on the introduction of offsets aimed at supporting vulnerable population groups, which are hit harder both by the emergency fiscal recovery measures and by the effects of the global financial crisis.

Though all three unions have expressed their satisfaction with the stance of the Minister of Finance, they still have reservations over the successful implementation of the agreement. In this context, the next all-trade union congress was scheduled for late January 2011 so that the trade union movement could revise its positions after evaluating the government measures.

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

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