By Elias Hazou
Trade unions affiliated with the Cyprus Telecommunications Authority (CyTA) were on Tuesday chewing over a government proposal on the status of the company’s employees post-privatisation.
The government is dangling free shares in a new telecoms company – to exist side by side with CyTA – in a bid to lure the semi-governmental employees over to the private sector.
The five unions representing CyTA workers were planning a joint gathering on Wednesday to weigh the proposal’s pros and cons and formulate a common response. According to the Cyprus News Agency (CNA), they will be submitting their comments to the finance minister by week’s end.
For its part, the government is in a rush to push through legislation privatising the state telecoms corporation – a ‘prior action’ demanded by Cyprus’ international creditors in order to release the next bailout tranche.
Reports said the Cabinet will discuss and ratify the CyTA conversion-privatisation law at its next scheduled meeting, on August 19, after which the item would be tabled to parliament.
The unions meanwhile are demanding that the government document, describing the CyTA workers’ future terms of employment, be likewise enshrined in legislation as a guarantee.
Doros Theodorou, head of the SIDIKEK-PEO trade union, told the CNA that the finance minister has no intention of doing the latter.
The only item of legislation the minister plans to submit to the House is a bill ensuring the permanency of the CyTA workers, Theodorou added.
This appears to be the main bone of contention, as the unions have otherwise warmed to the government proposal, considering it has sprung no major surprises after months of negotiations.
The CNA also quoted Elias Demetriou, head of the left-leaning OIO-SEK union, representing workers in semi-governmental organisations, as saying that the government proposal “is generally in the right direction.”
The proposal, he said, secures the three ‘red lines’ laid out by the unions, namely continued employment, pension benefits and retaining government employee status for CyTA employees.
The pitch – unveiled to the unions late on Monday – includes an outline of the gradual privatisation of CyTA.
A ‘new CyTA’ is to be incorporated, with 100 per cent of its shares initially owned by the state. It will be a private-law entity, while the current CyTA will continue to exist in parallel as a public-law company.
The core telecoms business of CyTA is to be transferred to the new company, which at first will be controlled or managed by the state. Authorities will then allow for nine to ten months to seek out and strike a deal with interested private investors, who would buy up shares in the new company. The transaction will require the nod from parliament.
Under the proposal, investors “must demonstrate that they possess considerable technical know-how in the telecoms field as well as being financially robust.”
The conversion of the ‘new’ CyTA into a privately-owned company must be completed by early 2017.
The transition, according to the same document, will occur in three stages. The first covers the time period from the commencement of operations of the new telecoms company, up until the transfer of the state’s stock to the private investor or investors, after a selection process.
The second stage, dubbed the ‘transitory period’ will last approximately 12 months after a private player has taken over, followed by an ‘extended transitory period’ of a duration of three months.
Current CyTA employees — both full-time and part-time — will be given four options.
They can choose to keep working for the new company as private-sector employees, after the transitory period has expired. In return, and as an incentive for ditching their government employee status, they will be gifted an as yet undetermined number of shares in the company.
Their terms of employment will be governed by a collective bargaining agreement between the government and unions and lasting until 2018.
Alternatively, employees may elect to continue working for the new company, but as government employees. Technically, they will work for the ‘old’ CyTA, and will be classed as being on unpaid leave. They will not receive free shares.
A voluntary exit package is the third option. For those not going for any of the above, they will be seconded to the civil service, on the same pay grade and benefits they were entitled to at CyTA.
It was not immediately possible to gauge what the cost of the transition to the ‘new’ CyTA might be – and hence the company’s attractiveness for prospective investors.
Christos Patsalides, the finance ministry’s permanent secretary and also the current CyTA chairman, deferred to the finance minister when asked the question.
Finance minister Harris Georgiades could not be reached for comment.
Under the terms of its bailout, Cyprus has to raise €1.4bn through privatising state-owned companies, including CyTA, the power utility and the commercial operations of the Limassol port.
Various estimates have been made of CyTA’s value. According to CyTA’s own figures, the organisation’s total assets in 2014 were worth €971 million, compared to €1.037 billion the previous year.