A compromise over CoLA (cost of living allowance) seems unlikely at the moment, Labour Minister Kyriacos Koushos said on Monday after a meeting between unions and employers. He said all parties involved have until Christmas to find a solution.
The contentious issue has been brewing for some time now, with unions wanting a full reinstatement of the pre-bailout formula for calculating the pay raise effective January 2023, with employers ardently refusing.
“From everyone’s positions, it appears there are no prospects at this moment in finding a mutual agreement. The role of the ministry and minister is to be an intermediary,” Koushos said after a meeting lasting over 90 minutes.
“To this end, I will continue discussions with trade unions and employers to see if there is potential for a solution.”
Asked by reporters if there were any proposals which could bridge the differences, Koushos said it was too soon to say “but the timelines will be kept. If we can’t find a solution by that date, I will say so.” He commented on the “responsibility” of all parties involved.
Koushos said despite the fact that both sides were standing their ground, this was the same thing that happened in 2017, and yet a solution was reached.
“Neither the unions nor employers associations are changing their positions, and despite them being the same in 2017, the reached a deal at the time.”
The employers’ organisations and unions signed a transitional agreement at the end of 2017, maintaining 50 per cent of the rise in the retail price index is incorporated in wages once a year.
Fully restoring CoLa would come at an estimated €150 million added to the public sector payroll which has not been factored into the 2023 state budget.
As businesses face stark inflation rates and spiraling energy costs, they say full restoration of CoLa is not viable as it effectively translated to nine per cent pay rises on a gross salary. Unions have threatened strikes if their demands are not met.
If unions and employers do not reach an agreement, the transitional CoLA agreement that applies since the beginning of 2018 would remain. There is a provision in it which stipulates that if the two sides fail to agree on a new CoLA formula the transitional agreement stays in force.