The labour ministry, regardless of which politician was in charge, had always been an ally of the unions. This may have been because its officials were themselves highly unionised or because they were following instructions from a government that did not want to alienate unions, with elections always round the corner. The ministry’s mediation service always showed a bias in favour of the unions when industrial disputes were referred to it, but employer organisations considered this a fact of industrial relations.
Zeta Emilianidou, the current minister, has been no different to her predecessors as her handling of the re-introduction of the Cost of Living Allowance (CoLA) has illustrated. After the economic meltdown of 2013 the measure was suspended, but rather than consign it to the scrapheap of history because of the harm it undoubtedly caused the economy, the government, under pressure from the unions, has decided to amend it and re-introduce it in the public sector. Wages would be adjusted once a year instead of twice and only at 50 per cent of the annual increase in the cost of living index, on condition there was growth for two successive quarters.
Rather than scrap it and face criticism from the unions and parties, the government decided to limit its effects. Under the current deflationary conditions, wages should have been reduced because the cost of living allowance was going down, but Emilianidou demanded assurances from employer organisations that they would not cut wages as a result. She received the assurances she requested. For the private sector this was only fair as pay cuts introduced three to four years ago are still in place. In the public sector however, from this month all wages would be restored to their pre-2013 levels and significant across the board pay increases would be given. It would have been only fair for wages to have been adjusted downwards in line with the negative price index.
Emilianidou would never sanction such a move even in the unlikely event that President Anastasiades, who has regularly pandered to public employees, gave the go-ahead. Under the circumstances, expecting her or the finance minister to have openly argued against the re-introduction of CoLA was totally unrealistic. Not only have they brought it back they have now also set the precedent that wages would be automatically adjusted only when the index goes up. With another year or two of falling prices ahead, this was another wasted opportunity to keep public sector wages under control.
Meanwhile, on Monday unions and employer organisations met with Emilianidou to discuss the re-introduction of CoLA in the private sector and unions demanded that the adjustment of wages would not be restricted to 50 per cent of the rise of cost of living index. Was this because businesses were doing so well now? No, it is because the priority of every government is to keep public employees happy regardless of how this affects the ailing private sector.