Cyprus Mail

CoLA meeting ends in deadlock amid threat of widespread strikes

Kyriacos Koushos

Thursday’s meeting between trade unions and employers’ organisations ended in deadlock over reinstating the cost of living allowance (CoLA), with the labour minister – acting as mediator – scrambling to find the sweet spot by early next week amid the threat of widespread strikes.

Coming out of the meeting, Labour Minister Kyriacos Koushos said the two sides were still far apart on the CoLA issue.

“There has been some shifting from the known positions,” he noted. “Trade unions have let me understand they are ready to accept a gradual [full] restoration of CoLA. On the other hand, the employers accept the agreement of July 2017, and undertake to implement it, in other words, the payment of 50 per cent of CoLA.”

Despite this, significant differences remained between the two camps, which Koushos said prevented him from putting forward a middle-of-the-road proposal at this time.

He reiterated that the government is not in favour of scrapping CoLA, recalling that it is the current Anastasiades administration which had reinstated the allowance.

The matter under discussion is whether the deal struck in July 2017 will be renewed or amended.

“They [unions and employers] are still far apart from one another, so I have asked for one last time window. By the afternoon of next Tuesday I will have more contacts, and having worked with staffers at the ministry and having briefed the finance minister and the President of the Republic, I will make my decisions, that is, if I will declare an impasse or else submit a mediation proposal.”

Quizzed by journalists, Koushos said he could not say at this time whether he’d meet again with the stakeholders prior to the Tuesday deadline.

Given the circumstances, the minister appealed to the two sides’ sense of responsibility to avert industrial action. The government itself cannot impose a decision, so it was up to the syndicates and the employers to work things out.

“Labour unrest is the last thing anyone wants in the current economic situation,” Koushos remarked.

He recalled how back in July of 2017 the stakeholders had arrived at a transitional arrangement on CoLA that applied until the end of 2020. Then in December 2020 the sides signed a new agreement, effectively extending the transitional arrangement until the end of 2021.

“Given this, I wonder why we cannot arrive at a new agreement now.”

Partial payment of CoLA resumed in January 2018, after having been frozen in July 2011. Under the transitional agreement, since 2018 CoLA is paid provided that the second and third quarters of the prior fiscal year register GDP growth.

Under the current arrangement, the CoLA rate is limited to half the annual rise in the Consumer Price Index. The index-linked allowance is paid out once a year, in January.

Employers initially said they wanted the allowance scrapped altogether but have now signalled they’re willing to keep CoLA at 50 per cent.

Unions have put their foot down, telegraphing they’ll accept nothing less than a new arrangement guaranteeing the reinstatement of CoLA at 100 per cent – if not immediately then at least gradually over a period of time.

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.

If unions and employers do not reach an agreement, the transitional CoLA agreement that applies since the beginning of 2018 would remain. A provision stipulates that if the two sides fail to agree on a new CoLA formula, the transitional agreement stays in force.

Reacting to Thursday’s stalemate, trade unions said they would grant the minister a few more days, but no more.

It’s understood the syndicates are gearing up for mass strike action lasting three days from January 23 to January 26.

Sotiroulla Charalambos, boss of the left-leaning PEO union, said that – respecting the code of industrial relations – they’d give 10 days before resorting to strikes.

Meantime media reported that the Employers and Industrialists Federation, and the Chamber of Commerce and Industry, will each convene meetings of their respective leaderships to assess how businesses would manage a potential crippling strike.

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