Labour Minister Kyriacos Koushos will on Monday begin meetings with unions and labour organisations, as part of the government’s efforts to help find a compromise on the cost of living allowance (CoLa).

Earlier this week, Koushos said the deadline for finding a mutual agreement is Christmas, after meetings with both parties were futile. Unions seek a full restoration of CoLa while labour associations want it scrapped altogether.

Koushos will meet with Peo union at 1pm on Monday, and continue holding separate meetings with stakeholders throughout the week. He expressed the hope a joint meeting will be possible in two weeks.

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.