Growth in the public sector has gained pace in 2015 as the hiring of employees increased in contrast to the declining number of retirements, the Public Service Commission (PSC) said in its annual report on Tuesday.
The PSC, which is charged with monitoring hiring and promotions in the public service, said in its 2015 report that the previous year saw the opening of job positions that had been frozen since the 2013 financial crisis.
A €10 bn financial assistance package Cyprus concluded with its international creditors in 2013 provided that all hiring, promotions and salary increases in the public sector would freeze until the expiry of the three-year bailout.
However, problems emerged concerning the public service operation as mostly civil service directors and high-earners opted for retirement to avoid a possible tax on their lump sum retirement allowance.
Furthermore, as part of the fiscal consolidation measures, public service was to decline by 4,000 until 2016.
According to the PSC report, unfrozen job positions in the public service in 2013 and 2014 amounted to just 19 and 126 respectively and accelerated to 426 in 2015.
Head of the PSC Giorgos Papageorgiou, said positions unfrozen this year to date amounted to 485.
The report said that the commission focused on accelerating the rate of hiring in management and middle-management positions aiming to strengthen the operation of the public service.
Papageorgiou also said that retirements in the public service show a declining trend.
Retirements in 2011 amounted to 562, with 980 in 2012 which peaked at 1,000 in 2013, he added, while 2014 saw 408 retirements, 2015 162, while 79 retirements have been recorded so far in 2016.
Papageorgiou said that there was a peak of early retirements in 2013 due to the bail out measures and the possibility of taxing the lump sum. “Too many civil servants chose to retire prematurely to secure their benefits,” he said.
To reform the civil service in terms of hiring, appraisal, promotion and remuneration, six government bills were tabled before parliament in August 2015. The bill on state salaries stipulates that pay rises in the public service will be tied to the trajectory of gross domestic product. It follows that no salary increases would be granted at times of zero economic growth, and any such increases would be given following collective bargaining and provided the state can afford it.