Acting on behalf of the government, the attorney-general has decided to appeal a recent court judgement which had found pension cuts in the public sector to be unconstitutional and ordered that the affected persons be retroactively compensated.
According to the Cyprus News Agency, the decision to appeal was taken during a meeting on Monday between attorney-general Costas Clerides and the permanent secretary of the finance ministry Christos Patsalides.
The Law Office of the Republic, representing the state, is also expected to file a motion to stay the payment of any compensation to the affected civil servants until the matter is definitively resolved in court.
Citing sources, the news agency said the overall retroactive compensation is estimated at between €30m and €40m a year.
The figure represents the compensation to be given to all people employed in the civil service and the broader public sector whose pensions were previously docked.
On November 27, the administrative court declared null and void a 2012 law which had imposed cuts on the pensions of public sector employees.
A group of 115 former civil servants and people employed in the broader public sector had challenged the 2012 law, enacted then to rein in the state payroll as part of an austerity drive.
In its ruling, the administrative court said the 2012 law was in breach of the right to property, protected by the constitution.
A prior and separate court decision had determined that pensions are considered property.
The administrative court said the 2012 law violated article 23.3 of the constitution which, though allowing for restrictions on the right to property, states that these are permitted under very specific and explicit circumstances.
None of these restrictive conditions held in the matter under consideration, the court found.
Moreover, in its ruling the court annulled the 2012 law, and ordered that all affected individuals – not only the plaintiffs in question – should be compensated accordingly.
The administrative court’s decision could have broader ramifications on the state’s accounts, as it could set a precedent for an ongoing case – filed with the Supreme Court – where the main civil servants’ trade union is also challenging salary cuts likewise imposed in the midst of the financial squeeze.
Pasydy, the trade union, wants that law as well to be declared unconstitutional. Should they win the case, retroactive compensation could run in the tens or hundreds of millions.
A decision in that case is expected sometime in early 2019.