Cyprus: Latest developments in working life Q2 2019

The expected resolution to the dispute in the construction industry, deadlocked negotiations on the renewal of collective agreements in the hotel industry and work stoppages by contract workers in the public sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Cyprus in the second quarter of 2019.

Construction industry on the verge of labour peace

The long-running dispute in the construction industry over the renewal of collective agreements (pending since 2013) and the legal regulation of the fundamental rights of workers began to move towards a resolution in Q2 2019.

Minister of Labour, Welfare and Social Insurance Zeta Emilianidou intervened after negotiations between the Pancyprian Federation of Labour (PEO), the Cyprus Workers’ Confederation (SEK), the Democratic Labour Federation of Cyprus (DEOK) and the Federation of Building Contractors’ Association of Cyprus (OSEOK) reached an impasse. On 28 May, the minister submitted a proposal with a binding nature (based on provisions agreed among the parties). The proposal foresees a bill for the legal regulation of four fundamental working rights:

  • pension fund
  • compensation for working during public holidays
  • 13th salary
  • compensation for overtime work

The trade unions’ request to include salary scales in the bill was rejected.

In relation to the renewal of the collective agreements for the construction industry, the parties agreed to the gradual restoration of the 70% salary cuts imposed after the economic crisis (amounting to 14.7% of the total salaries) within a period of 30 months from 1st June 2019 and with a retroactive effect upon signature of the final agreement.

Minister Emilianidou gave the parties two weeks in which to endorse the proposal and PEO, SEK and DEOK did so. OSEOK requested an extension and is expected to provide a response in July 2019. The bill will then need to be approved by the cabinet before being submitted to the House of Representatives for a vote.

Deadlock in negotiations in hotel industry

Negotiations in the hotel industry over the renewal of the collective agreements reached an impasse in Q2 2019. On 5 June, sectoral trade unions the Union of Hotel and Recreational Establishment Employees of Cyprus (SYXKA-PEO) and the Hotel, Catering and Restaurant Employees Federation (OEXEKA-SEK) requested the mediation services of the Ministry of Labour, Welfare and Social Insurance. They also started to inform hotel employees about the developments through general assemblies, laying the foundations for future industrial action.

One of the main demands of the trade unions is to include salary scales in the law that protects the fundamental rights of workers in the industry. However, this is in direct contrast to the demands of employer organisations the Cyprus Hotel Association (PASYXE) and the Association of Tourist Enterprises (STEK), who want lower salary scales, less working rights and fewer benefits than those provided by the collective agreements to be introduced for third-country nationals.

The trade unions also want working rights and benefits to be restored to their pre-2013 levels, after they were restricted following the financial crisis. These restrictions affected wages, the pension fund percentage, the 14th salary paid being paid at 30% of the monthly salary, remuneration for work on Sundays and remuneration for work during public holidays.

The Ministry of Labour, Welfare and Social Insurance is expected to arrange a meeting with all parties in early July 2019.

Contract workers protest against unfair treatment

Contract workers in the public sector took part in two-hour work stoppages on 8–10 May in protest against their unequal treatment in comparison to workers with permanent posts.

The sectoral trade union – the Pancyprian Equality Union – complained about the ‘unequal, disadvantageous, unjust and even humiliating treatment’ of workers with fixed-term and indefinite contracts in comparison to colleagues with permanent contracts who perform the same duties. The union called on the government to comply with Council Directive 1999/70/EC concerning the framework agreement on fixed-term work, and warned that measures would escalate if this did not occur.

Minister of Finance Harris Georgiades claimed that no discrimination exists in terms of remunerations, wage increases, wage indexation, augmentation, pay cuts, annual leave and working hours between permanent and contract workers. According to the minister, the promotions of contract workers is the only issue that has not been settled because of a legal and constitutional obstacle.

The union carried out a campaign to inform the political parties about their position and raise awareness of the discrimination between the two groups of workers in the public sector. According to the president of the union, Prodromos Christophi, the Democratic Rally (the ruling party) committed to preparing a bill that will eliminate any form of discrimination against contract workers. Any further industrial action has been postponed by the union in light of this commitment.

Commentary

This is the first time that the renewal of collective agreements has been linked with the legal regulation of the fundamental rights of workers in any industry in Cyprus. One of the most important implications of such an act is that it paves the way for other industries with similar problems (e.g. the hotel industry and the service industry) to demand further legal regulations. Another important implication is that all workers in the construction sector, whether they are members of a trade union or not, will enjoy the same fundamental rights.

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