Cyprus Mail
Cyprus

Top court tells CBC fat cats pay cuts were lawful

One employee had taken his employer to court for a monthly reduction of 26 euros from a salary of almost 3.000 euros

By George Psyllides

THE Supreme Court has rejected a series of appeals from a number of Central Bank employees who disagreed with paying a temporary contribution to the state as part of an austerity drive in 2011.

The decision was made on August 31 and included all public and wider public sector workers who would have to take a cut off their gross revenues, including pensions.

On September 14, the then Central Bank governor Athanasios Orphanides sent staff a circular informing them that according to a legal opinion, the law applied to them too.

The cuts at the CBC started in September 2011.

The 21 applicants, including some highly paid cases, argued that the procedure followed was unlawful in that no board decision had been taken; there had been no consultations, and their special status as staff of an independent entity had not been taken into account.

They also said that the European Central Bank had not been asked to give its view, and that it was a violation of their right to property.

For example, one applicant appealed the decision because he lost €246 per month out of a total €9,545 in salaries and allowances.

Another went to court for €183 from €7,729 they made a month, and yet another joined the appeals because they lost €26 out of a gross salary plus allowances of €2,948.

Citing the Constitution and the laws of the country, the Supreme Court ruled that it was clear that CBC staff and officials fell within the scope of the laws on the wider public sector and no board decision was necessary to put them into effect.

“In any case, no exemption in favour of the Central Bank had been provided in the laws in question,” the court said.

The Supreme Court said the CBC should have asked for the view of the ECB regarding the laws beforehand, but even so, it did not deprive the CBC of its institutional and financial independence as indicated by later letters from the ECB president.

In those letters, the ECB found nothing wrong with the cuts, as it had done earlier when asked about the freeze in cost of living allowance and incremental increases.

The appeals were rejected and the applicants were ordered to pay €350 each in legal fees.

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