Unions seek measures to combat unemployment in construction

Between April and September 2009, unemployment has increased dramatically in the construction sector. Trade unions in the sector believe that unemployment may rise even further during the winter months. In this context, workers see it as imperative to introduce targeted measures both in the short and in the long term to combat unemployment. The trade unions agree on speeding up the development budget and how to address illegal and undeclared employment in the sector.

Rising unemployment in construction

The construction sector has experienced a dramatic increase in unemployment in 2009 compared with 2008. According to estimations of the Cyprus Building, Wood, Mine and General Workers’ Trade Union, affiliated to the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, PEO), and the Federation of Builders, Miners and Relevant Professions, affiliated to the Cyprus Workers’ Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, SEK), within a year – from September 2008 until September 2009 – unemployment has increased by more than five percentage points. The unemployment rate in construction currently stands at over 7%. In absolute numbers, according to data from the district labour offices, the number of registered unemployed persons in construction has risen significantly in just a month, from August to September 2009, from 2,546 to 2,913 workers.

The sector’s main trade unions, PEO and SEK, share the opinion of the employer organisations that the increase in unemployment is due to less private investment, on the one hand, and to the limited extent to which development works have been implemented, on the other.

Unions propose measures to address crisis

According to PEO and SEK, the dramatic rise in unemployment in the construction sector makes it imperative to implement targeted measures on a short-term as well as a long-term basis. In this context, the two organisations have formulated separately a series of proposals whose implementation they believe would help to address the crisis.

Speeding up development budget

In particular, both organisations agree on the need to speed up the development budget so that it can be implemented to the greatest possible extent. According to the General Secretary of the Cyprus Building, Wood, Mine and General Workers’ Trade Union, although the government aims to implement 85% of the development budget in 2009, to date only 40% of this budget has been used. In this context, PEO would be happy if 65% of the budget is implemented. If this goal is met, new jobs could be created and the economy stimulated, thus allowing the government to implement its social programme.

Addressing undeclared work

The two trade union organisations also agree on how to address illegal and undeclared employment. In this context, PEO proposes the immediate registration of all workers in the construction sector, and the introduction of a special occupational identification (ID) card listing each worker’s sector of employment, employer and occupation. It should be noted that this measure has been a standing demand of workers in the sector, with the aimed of identifying all illegally employed workers (CY0807039I). To the same end, PEO proposes that enterprises financed by state or European funds which employ illegal workers should be subject to dissuasive sanctions. According to PEO, in public sector works that the government has awarded to private enterprises through open tender procedures, contracts signed with the successful bidder should contain a clause stating that the successful bidder must implement the sectoral collective labour agreements and existing labour legislation.

Economic stimulation

With regard to stimulating private investments as well as the economy, SEK proposes an immediate decrease in lending rates and the provision of additional incentives to young couples to purchase their first home.


Increased unemployment in the construction sector is part of the impact of the global economic and financial crisis on the Cyprus economy. Thus, although construction is one of the sectors most affected by the crisis, increasing unemployment is nevertheless a phenomenon that now affects all sectors of economic activity. Specifically, according to Eurostat data corrected for seasonal variations, as published on 1 October 2009, Cyprus continues to be ranked third among the EU27 countries with the lowest unemployment rate (5.6% in August 2009). Nonetheless, compared with August 2008, when the unemployment rate was 3.5%, unemployment has risen significantly. In this context, the social partners are waiting with particular interest for the government’s announcements regarding a package of crisis measures being prepared by the Ministry of Labour and Social Insurance (Υπουργείου Εργασίας και Κοινωνικών Ασφαλίσεων, MLSI) which aim to keep unemployment low throughout the economy. The publication and implementation of the crisis package was scheduled for early November 2009.

Evangelia Soumeli, Cyprus Labour Institute (INEK/PEO)

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