New agreement signed in metalworking industry

Following months of bargaining and mediation, in June 2007 a memorandum of agreement was finally signed to renew the collective agreements in the metalworking industry. The three renewed agreements provide for pay rises and increased contributions to the two sectoral funds for health insurance and welfare. The signatory employer organisations to the agreements, however, expressed their discontent with the provisions of the memorandum of agreement.

On 7 June 2007, after five months of bargaining, both directly and through mediation, consensus was reached on renewing the collective agreements in the metalworking industry. The two sides accepted the mediation proposal from the Department of Labour Relations (Τμήμα Εργασιακών Σχέσεων) of the Ministry of Labour and Social Insurance (Υπουργείου Εργασίας και Κοινωνικών Ασφαλίσεων, MLSI), by co-signing a memorandum of agreement, on the basis of which the three sector’s basic collective agreements are to be renewed. The three renewed agreements will cover about 9,000 workers in the sector.

On behalf of the workers, the agreements were signed by the Federation of Industrial Workers of Cyprus (Ομοσπονδία Βιομηχανικών Εργατοϋπαλλήλων Κύπρου, ΟΒΙΕΚ), affiliated to the Cyprus Workers’ Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, SΕΚ), and the Cyprus Metalworkers, Mechanics and Electricians Trade Union (Συντεχνία Εργατοϋπαλλήλων, Μετάλλου, Μηχανοτεχνιτών και Ηλεκτροτεχνιτών Κύπρου, SΕΜΜΗΚ), affiliated to the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, PΕΟ). On the employers’ side, the following organisations – according to the subsector they cover – signed the three renewed agreements: the Association of Electrical Installation Contractors, the Association of Artistic Printing Offices and the Cyprus Metalworking Industry Employers’ Association (SYMEVIK).

The memorandum of agreement will constitute the framework for the conclusion of 28 company-level agreements in the sector, which will cover about 1,000 workers.

Provisions of agreement

With regard to the content of the new agreement – apart from its term, which is set at three years effective retroactively from 1 January 2007 until 31 December 2009 – most of the provisions pertain exclusively to pay issues, which in fact represented the basic point of disagreement between the trade union and employer sides. The agreements provide for an increase in basic wages and salaries of around CYP 1.35 (€2.31 as at 27 October 2007) a week in 2007, as well as increases of CYP 1.40 (€2.40) in both 2008 and 2009.

In addition, it was agreed that starting wages will be revised in two stages: by 75% of the increases granted on 1 January 2008 and by 100% of the increase granted on 1 January 2009. Lastly, provision was made for a weekly rise of CYP 0.10 (€0.17) in the contributions of each side to the sector’s health insurance fund; the contributions will be increased accordingly from 1 July 2007 and from 1 July 2009. A similar increase in employers’ contributions to the sectoral welfare fund has been set at 0.25% of each worker’s total pay, beginning retroactively on 1 July 2007.

In terms of non-pay provisions, no essential differences were noted from the previous agreement (CY0409101N).

Views of social partners

In the trade unions’ view, the increases provided for correspond to about twice the sector’s productivity rate, which meets to a large extent the initial demands of the two trade union organisations.

By contrast, in an announcement issued on 24 May 2007, the Employers and Industrialists Federation (Ομοσπονδία Εργοδοτών και Βιομηχάνων, ΟΕΒ) expressed its strong dissatisfaction with the final content of the agreements, of which the costs – in their opinion – will be higher than the sector’s productivity output. This announcement was made despite the fact that the assemblies of the three employer organisations which are members of OEB have signed the new collective agreements and thus approved the mediation proposal from MLSI. In this context, the employer side emphasises that it accepted the ministry’s final proposal in order to contribute to national efforts for Cyprus’s smooth entry into the eurozone.

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

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