The impact of the information and consultation directive on industrial relations — Cyprus

  • Observatory: EurWORK
  • Topic:
  • Published on: 08 March 2009



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Country:
Cyprus
Author:
Eva Soumeli
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Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The harmonisation of national law with Directive 2002/14/EC was achieved when Law 78(I)/2005 Establishing a General Framework for Informing and Consulting Employees came onto the statute book in July 2005. Although the content of Law 78(I)/2005 was the subject of social dialogue, two years after it was passed there are indications that in practice its implementation is extremely restricted, on the one hand due to the relevant transitional provisions, and on the other due to the social partners’ failure to take forward its practical implementation.

Question 1: National implementation of the Directive

Has the information and consultation Directive been implemented in your country? If so, did this require:

(i) extensive reform or major new legislation?

Major new legislation

(ii) an extension or relatively minor adaptation of pre-existing provisions (e.g. on national works councils or similar bodies)?

or

(iii) no new measures?

Law 78(I)/2005, known as the Law Establishing a General Framework for Informing and Consulting Employees, which came into effect on 8 July 2005, harmonized national law with Community Directive 2002/14/EC. In this context, Law 78(I)/2005 essentially duplicates the content of the Directive in domestic law, as it was written in the same spirit and uses the same wording as the Directive, whereas the Cypriot legislator intervenes in matters for which provision is made on the national level.

Despite opposition from the trade union organisations (see below) as regards its scope, in keeping with the provisions of Article 14 of the law regarding its inception and provisional clauses (see below) it applies to enterprises with at least 30 employees (Article 3). By employee representatives are meant those provided for on the basis of law or practice, and in the opinion of the Department of Labour Relations of the Ministry of Labour and Social Insurance, the reason that Law 78(I)/2005 makes no provision for the manner of electing employee representatives for the purpose of information and consultation is mainly that employees are currently represented by the trade union organisations.

As regards the nature of the information and consultation process and its practical details, Law 78(I)/2005 lays down employees’ right to information and consultation in relation to the following matters (Article 5):

  • Information on the recent and projected evolution of an enterprise’s activities and financial situation.
  • Information and consultation in relation to the situation, structure and prospective evolution of employment in the enterprise, as well as preventive measures that may be provided for, especially if jobs are in jeopardy.
  • Information and consultation in relation to decisions that may bring about material changes in the organisation of work or employment contracts, including those falling within the framework of the special information and consultation procedures described in the Collective Redundancies Law 28(I)/2001 (Directive 98/59/EC) and the 2000-2003 Laws 104(I)/2000 and 39(I)/2003 on the Safeguarding and Protection of Employees Rights in the Event of Transfer of Undertakings businesses or Parts thereof (Directive 2001/23/EC).

According to the same article, the time, manner and content of the information must be such as to allow the workers’ representatives to undertake a comprehensive analysis and where necessary prepare consultation. The consultation should be carried out in accordance with the following criteria:

  • The time, manner and content must be appropriate.
  • At the relevant level of direction and representation, depending on the matter being discussed.
  • On the basis of the relevant information provided by the employer, according to the interpretation of the term information, and the opinion the employees’ representatives are entitled to express.
  • In such a manner that the employees’ representatives may meet with the employer and receive a reasoned response to any opinion they may have expressed.
  • In order to achieve agreement on the decisions that fall within the competencies of the employer, as stipulated in the law.

As regards information and consultation deriving from an agreement, according to Article 6 section (1) the social partners may, at the appropriate level, including the enterprise level, define freely and at any time through negotiated agreement, the practical arrangements for informing and consulting employees. In this context, the agreements in section (1), the agreements existing on 23 March 2005, and any subsequent renewals thereof may establish provisions which are different from those referred to in Article 5 (see above). Specifically, according to section (2) (b) of the relevant article, the practical arrangements on information and consultation referred to in the agreements drawn up in accordance with section (1) are defined and implemented in such a way as to ensure their effectiveness and ensure that when defining or implementing practical arrangements for information and consultation the employer and the employees’ representatives will work in a spirit of cooperation, with respect for each other’s rights and obligations, taking into account the interests both of the enterprise and of the employees. For this reason section (2) (c) stipulates that the agreements referred to in section (1) should keep to a minimum the burden on enterprises, while ensuring the effective exercise of the rights granted.

Question 2: Infringement proceedings

If yours is one of the countries against which the European Commission instituted infringement proceedings for non-compliance with the Directive (see above), on what grounds was this done? What accounts for the government’s inaction or delay? How has the government reacted to the infringement proceedings? And has the matter now been resolved?

No

Question 3: Views of the social partners

(a) How did national employers’ groups and trade unions react to the Directive when it was adopted and what were their views on how it should be implemented in your country? If there was debate and controversy, on which aspects of the Directive did it focus? How and to what extent were the social partners involved in the implementation process and to what extent did they influence your government’s response to the Directive?(b) What are the social partners’ views on the measures finally adopted (if any) to implement the Directive in your country?

Since the Cypriot system of industrial relations is based on the principles of voluntarism and tripartite cooperation, practically all labour issues, including harmonising legislation, are the subject of social dialogue. In this context, any positions taken by the social partners are taken at the consultation stage.

With regard specifically to the adoption of Law 78(I)/2005 for the purpose of harmonisation with the provisions of Directive 2002/14/EC, the established procedure was followed, according to which the Department of Labour Relations of the Ministry of Labour and Social Insurance prepared a draft bill which was examined in detail by a Tripartite Technical Committee of the Labour Advisory Board and subsequently by a plenary session of the Labour Advisory Board on 21 December 2004. The Technical Committee was made up of representatives of the Cyprus Chamber of Commerce and Industry (Κυπριακό Εμπορικό και Βιομηχανικό Επιμελητήριο, ΚΕΒΕ), the Employers and Industrialists Federation (Ομοσπονδία Εργοδοτών και Βιομηχάνων, ΟΕΒ), the Democratic Labour Federation of Cyprus (Δημοκρατική Εργατική Ομοσπονδία Κύπρου, ΔΕΟΚ), the Cyprus Union of Bank Employees (Ένωση Τραπεζοϋπαλλήλων Κύπρου, ΕΤΥΚ), the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, ΠΕΟ) and the Cyprus Workers' Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, ΣΕΚ). As regards the content of the legislation, the most important issues that arose at the consultation stage, on which the social partners in fact disagreed, referred to Article 3 (Scope), Article 6 (Information and consultation deriving from an agreement) and Article 14 (Transitional provisions).

Article 3 – Scope

The trade union organisations recommended that the scope of the new law be extended to apply to businesses with at least 10 employees, whereas the employer organisations recommended that the scope be such that the law applies only to enterprises with at least 50 employees. The law covers undertakings with at least 30 employees (as of 1 March 2008).

Article 6 – Information and consultation deriving from an agreement

The Employers and Industrialists Federation (Ομοσπονδία Εργοδοτών και Βιομηχάνων, ΟΕΒ) recommended that the phrase without creating an additional burden on enterprises or businesses be added to paragraph (b) of this article. Taking this recommendation into consideration, the Ministry of Labour and Social Insurance decided to add a new paragraph (c), (see above), stating that the agreements mentioned in section (1) should keep to a minimum the burden on enterprises while ensuring the effective exercise of the rights granted, as also set out in paragraph 22 of the preamble to Directive 2002/14/EC.

Article 14 – Transitional provisions

On the basis of Article 10 of Directive 2002/14/EC, the member states may limit the application of the national provisions implementing the Directive to (a) undertakings employing at least 150 employees or establishments employing at least 100 employees until 23 March 2007, and (b) undertakings employing at least 100 employees or establishments employing at least 50 employees during the year following the date in point (a).

With regard to the above-mentioned issue, the trade union organisations requested that the application of the Law be limited until 23 March 2007 to establishments employing at least 50 employees, until 23 March 2008 to establishments employing at least 20 employees, and after March 2008 to establishments employing at least 10 employees.

The Ministry of Labour and Social Insurance, having taken into account the decision it reached in relation to the scope of the draft bill (see Article 3 above), concluded that Law 78(I)2005 will be applied on the basis of the following regulations:

  • From the date of its publication in the Official Gazette of the Republic (8 July 2005) to enterprises employing at least 100 employees.
  • From 23 March 2007 to enterprises employing at least 50 employees, and
  • From 23 March 2008 to enterprises employing at least 30 employees.

Question 4: Impact of the Directive on industrial relations practice

What impacts on industrial relations practice has the implementation of the Directive had in your country?

In the opinion both of the Ministry of Labour and Social Insurance and of the social partners, the adoption of Law 78(I)/2005 in compliance with Directive 2002/14/EC is important insofar as it lays down employees’ right to information and consultation per se on a whole range of important issues. But although the practical implementation of this legislation has begun, in theory at least, nevertheless two years after the law came into effect it is still up to the trade union organisations to take forward its practical implementation. Furthermore, as also pointed out by the Department of Labour Relations at the Ministry of Labour, based on the transitional provisions (see above) the obligation to implement the law, at the present stage at least, involves a very small number of fewer than 200-250 enterprises.

Question 5: Interface with other national information and consultation provisions

Please comment on the relationship between national provisions implementing Directive 2002/14/EC (general framework) and those implementing Directives 98/59/EC (collective redundancies), 2001/23/EC (business transfers) and 94/45/EC (European Works Councils).

As specified in Article 3 of Law 78(I)/2005, its provisions do not affect the special information and consultation procedures described in Article 4 of Law 28(I)/2001 on Collective Redundancies (Directive 98/59/EC) or of Article 8 of Law 104(I)/2000_Law 39(I)/2003 on the Safeguarding and Protection of Employees Rights in the Event of Transfer of Undertakings businesses or Parts thereof (Directive 2001/23/EC), nor do they affect the special provisions laid down in the 2002 and 2003 Laws 68(I)/2002 and 143(I)/2003 on the Establishment of a European Works Council (Directive 94/45/EC). Furthermore, the same article stipulates that the provisions of Law 78(I)/2005 shall be applied notwithstanding other rights of information, consultation and participation under any other law.

Question 6: Commentary by the national centres

First and foremost, the adoption of Law 78(I)/2005 in compliance with Directive 2002/14/EC meets Cyprus’s contractual agreements as an official member state of the EU, filling a very substantial gap in matters of employees’ information and consultation. As with all harmonising legislation, the importance of this legislation lies mainly in the establishment of a new institution necessary both for the protection of workers and also for the smoother regulation of labour relations. From the experience to date, however, such as in the case of the application of the 2002 and 2003 Laws 68(I)/2002 and 143(I)/2003 on the Establishment of a European Works Council (CY0409103F), serious questions have arisen regarding the applicability of the existing legal framework, i.e. the extent it can be of use to the social partners, so that the various institutions are applicable in practice and meaningful.

Eva Soumeli, INEK/PEO

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