New collective agreement for construction industry

The social partners in Cyprus have finally agreed terms for a new collective agreement in the construction industry, two years after the previous one expired. After several unsuccessful attempts to renew it, the social partners accepted a mediation proposal from the Ministry of Labour and reached an agreement in principle in February 2013. The new agreement provides measures for reducing wage costs and undeclared employment, and signals the end of the strike which began in January 2012.

Background

On 12 February 2013, the social partners in the construction industry agreed terms on renewing the collective agreement, following lengthy consultations both at the direct bargaining stage and at the mediation stage. The agreement was approved by the congresses of three federations: the Democratic Labour Federation of Cyprus (DEOK), the Pancyprian Federation of Labour (PEO) and the Cyprus Workers’ Confederation (SEK). There were two votes against and four abstentions and, following this, the open-ended strike in the sector, which began on 24 January 2013, ended on 13 February 2013. The strike is considered to be the longest since 1948.

It should be noted that, during 2012, strike activity in the sector increased dramatically; there were 19 in total, compared with four in 2011 (CY1211039I, CY1202039I). In the opinion of the sectoral trade unions, this was due to the intransigence of the employers over the renewal of the industry-wide collective agreement. Prior to the present agreement, the Federation of the Building Contractors’ Associations of Cyprus (OSEOK) had rejected all three previous mediation proposals of the Ministry of Labour and Social Insurance (MLSI), which had been accepted by the unions.

Signatories to the agreement

The agreement was signed by the MLSI and Costas Rousia, the chairman of OSEOK and by representatives of the Cyprus Building, Wood, Mine and General Workers’ Trade Union (a member of PEO) along with the Federation of Builders, Miners and Relevant Professions, which is affiliated to SEK.

The sticking point had been the length of the collective agreement, with employers wanting it to last two years, and the unions three. They agreed on a duration of two and a half years, effective retroactively from 1 January 2011 to 30 June 2014. In terms of bargaining coverage, the agreement in the construction industry is one of the longest-standing sectoral agreements in Cyprus. It covers around 40,000 workers, of whom approximately 25,000 are trade union members. Since 2008, however, according to estimates by the Department of Labour Relations of the MLSI, bargaining coverage is lower at both the industry and the company levels, while unions have lost a large share of their membership.

Content of the agreement

Pay issues

The agreement provides for a €10 cut in weekly salaries (as they stood on 1 January 2013), and a further €9 cut in weekly salaries from 1 January 2014. These reductions came into effect when the agreement was signed (on 13 February 2013), but they are not retroactive. Weekly starting salaries will remain unchanged throughout the term of the sectoral collective agreement; standing at €440 for technicians, €380 for workers and €403 for semi-skilled workers. Other provisions include the following.

  • The cost of travelling to and from work will be charged half to the employer and half to the employee, calculated on the individual daily wage of each worker or technician.
  • During the term of the collective agreement, compensation for overtime between Monday and Saturday will be at a rate of 1:1.5. For Sundays and holidays the rate will be 1:2; however, 20% will be subtracted from all such compensation, and overtime will be calculated after 38 working hours per week have been completed.
  • The compensation rate for shift duty is set at 10%.

Undeclared work

The introduction of a special occupational identification card is regarded as the most important regulation in the new agreement, and constitutes a standing demand of workers in the sector (CY0807039I). Specifically, MLSI will provide all industrial workers with a Certificate of Inception of Employment, which will include each worker’s occupation. According to the unions, this is a necessary precondition for combating undeclared work and will also help in the introduction of standards of occupational qualifications necessary for those wanting to work in the sector. It should be noted that the criteria for entering the sector will be examined by a tripartite committee comprising representatives of the unions the employers and the MLSI, which will also act as coordinator.

Social partners’ position

The social partners and representatives of OSEOK, DEOK, PEO and SEK regard the agreement as nothing but a mutually acceptable and fair solution, given the unfavourable conditions created by the financial crisis. In this context, the unions stressed that at some point, conditions permitting, the workers will again demand the benefits they have lost.

Both sides considered the intervention of the former Minister of Labour and Social Insurance, Sotiroula Haralambous, to be key to resolving the dispute. The minister believed that a basic aim of the mediation services was to have a proposal tabled that would take into account, as far as possible, the priorities and concerns of both sides. In this context, apart from decreasing wage costs in the industry, the agreement also satisfies the need to implement certain mechanisms that will help combat undeclared work and unfair competition.

Eva Soumeli, INEK-PEO

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment