The full bench of the supreme court will on June 10 start hearing the state’s appeals against three recent administrative court decisions that reversed civil servants’ pay cuts.
On that date, the supreme court will also examine the state’s request to suspend execution of the decisions – compensating civil servants – until the matter is definitively adjudicated.
In March 29 decisions, the administrative court had ruled that a freeze on incremental pay rises, a 3 per cent contribution to pensions, and a reduction in civil servants’ pay were in violation of article 23 of the constitution regarding the protection of the right to property.
This applied to civil servants as well as persons employed in the broader public sector, such as semi-governmental organisations.
As such the pay reductions were deemed null and void and the applicants entitled to compensation, effective immediately.
Various estimates have been floated on how much the decisions might cost the state should the administrative court’s ruling be upheld and the affected civil servants compensated.
The most conservative scenario sees a few million euros as immediate backpay, compensating only those civil servants who sued, plus €200m annually from restoring full salaries to all civil servants.
The fiscal consolidation measures affecting exclusively the public sector, passed by parliament before Cyprus agreed the terms of its 2013 bailout with international creditors, included a general wage and hiring freeze, a 10 per cent drop in hiring salaries, and a permanent up-to 12.5 per cent reduction in pay.
On top came an extraordinary levy on wages in both the private and public sector which was phased out in 2016.
The measures had helped bring down the government’s staff expenses to €2.2bn in 2015 from €2.9bn in 2011.