Former employees of now-defunct Cyprus Airways (CY) are accusing the government of blackmailing them into waiving any extra claims for compensation in the future.
During a session of the House finance committee on Monday, CY employees said that, before being paid compensation for having being laid off, they are being asked to sign a form stating they surrender any other benefits and agree not to contest any other claims in court.
A finance ministry official said the document has so far been signed by about 60 per cent of staff, who combined got compensation to the tune of €6.4m.
Opposition MPs demanded that the government withdraw the document. They argued that the provident fund must be paid immediately, free of any caveats, as it should be regarded as a separate obligation of the bankrupt company.
The state has set aside some €15m total to compensate CY workers. This covers the deficit in the company’s provident fund, bonus compensation, terminal benefits and dues for holidays.
Giorgos Kalli, formerly a private shareholder in the company, claimed that shortly before CY’s demise the provident fund held some €30m but that the amount was squandered through reckless spending.
Back in January, Cyprus suspended operations at its flag carrier after the European Commission ordered the struggling airline to pay back over €65m in illegal state aid.
The company was majority-owned by the state.