Civil servants’ trade unions on Tuesday panned a government bill aiming to rein in the public sector payroll as a means of balancing the state budget.
The bill is part of six items of legislation comprising public sector reform.
Its key clause relates to placing a cap on salary increments of those employed in the broader public sector.
It proposes to link pay rises to the annual rate of growth of GDP. This would apply to general salary rises, periodic pay increments and the Cost of Living Allowance (CoLA), as well as to pensions.
If the state payroll were allowed to increase at 2012 rates, it could jump to €3.7 billion by the year 2020, Reform Commissioner Constantinos Petrides told MPs during a session of the House finance committee.
As a result the country might require another bailout in the long run, he warned.
The public payroll has been frozen till year-end 2016.
Also, said Petrides, consolidating the government’s balance sheet would positively impact the investment grade of sovereign bonds, currently rated as junk.
But syndicates representing public-sector workers are dead-set against the bill. While most agree that the state payroll must be ‘rationalised’, they say pay rises should be determined through collective bargaining agreements – as is currently the case – and not by law.
In addition, certain categories of public employees – police, the military, doctors – argue they should be exempt from the scope of the law due to the special nature of their respective professions.
Responding to the criticism and concerns raised, the Reform Commissioner insisted that the law, if passed, would not abolish collective bargaining.
Of the groups attending the parliamentary discussion, only the Employers and Industrialists Federation were on board with the government approach.
Petrides said the dialogue with social partners has been exhaustive, urging parliament to bring the public sector reform package to the plenum before the House dissolves ahead of May’s legislative elections.
Acting chair of the finance committee Angelos Votsis later told reporters that discussion of the two remaining public sector reform items would be taking place as of next week.
Main opposition AKEL trashed the government’s claims of an ‘exhaustive dialogue’, arguing that the government has so far engaged only three unions – PASYDY, PEO and SEK.
Smaller unions, including those representing teachers, were never consulted, AKEL MP Yiannos Lamaris said.
“No House would give this kind of legislation a fighting chance, that would prove to be a very tall order indeed,” he added, hinting at his own party’s stance.
Likewise Greens MP Giorgos Perdikis criticised the government of seeking to do a rush job.
More time was needed to discuss the bills, which should be put on hold until after the parliamentary elections, he said.
Cyprus’ exit from the economic adjustment programme – essentially a cash-for-reforms programme – has spurred groups to try and claw back remuneration lost since the March 2013 financial meltdown and bailout.