Cyprus: Developments in working life – Q1 2016

Increased industrial action, demands for the restitution of lost trade union rights, a new agreement in the hotel sector and changes to fixed-term contracts are the main topics of interest in this article. This country update reports on the latest developments in working life in Cyprus in the first quarter of 2016.

Increased industrial action

The period from January to March 2016 saw increased industrial action in the public sector. In the urban public sector, bus drivers decided to take industrial action after two bus companies refused to restore wages to previous pay levels. Union representatives say bus drivers had agreed to a salary cut in 2014 and 2015 as an act of goodwill due to the companies’ financial problems, but those agreements ended at the end of December 2015.

In the health sector, the Pancyprian Public Employees Trade Union (PASYDY) and the government agreed to the unfreezing of 185 nursing positions in public hospitals, and to replace short-term contracts with employment contracts lasting for at least six months. Nevertheless, some nursing staff decided to go on strike in protest against poor working conditions.

Unions demand the restoration of lost rights

In the new round of collective bargaining, the focus of the two biggest trade unions, the Cyprus Workers’ Confederation (SEK) and the Pancyprian Federation of Labour (PEO), has been on the special arrangements – made in response to the economic crisis – in many of the agreements that are now due for renewal. The unions will look to restore their members’ lost rights and improve their working conditions. PEO have stated that its main priorities include:

  • restoring lost rights for workers, pensioners and other social groups;
  • demanding development policies aimed at creating new jobs;
  • an extension of unemployment benefit.

SEK echoes this by stating that it will ask for the gradual recovery of income and benefits lost in the previous five years and better living standards through the promotion of state social policies.

New agreement in the hotel sector

Another important development is the conclusion of the new collective agreement in the hotel sector. Despite the unions’ initial determination to proceed with industrial action if employers did not restore all benefits deducted in the previous collective labour agreement, a new agreement was signed on 21 March 2016 that was a compromise based on a mediation proposal from the Ministry of Labour, Welfare and Social Insurance. It provides for a slight increase in employers’ contributions to funds as well as some improvements in compensation for working on public holidays. As a result, the new agreement retains most of the clauses of the 2013–2015 agreement.

Important changes in fixed-term contracts

On the legislative front, the most important development is the introduction of draft legislation regulating the employment status of public sector workers who have fixed-term contracts. The draft law which affects around 1,500 employees, many of which are in the health sector, is part of the broader reform of the civil service as provided for in the Memorandum of Understanding. The draft bill provides for:

  • a six-month minimum duration for fixed-term contracts;
  • after 24 months of employment, restoration of the 10% deducted from pay as part of the austerity measures;
  • an automatic switch to an open-ended contract for fixed-term employees with 30 months of employment, with ‘good performance’ as the single criterion for eligibility;
  • fixed-term contracts may no longer be terminated on grounds of redundancy.

The ‘good performance’ criterion is being introduced in the civil service for the first time.

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