Business leaders say struggling with litany of crises

Employers are expected to sound the alarm over labour unrest and uncertainty currently plaguing the economy when they meet on April 25 and will be looking to President Nikos Christodoulides for solutions when he addresses their AGM.

Among their concerns are inflation and resulting price rises, the war in Ukraine, sanctions on Russia, continuing fallout from pandemic restrictions, higher energy costs, labour shortages and unrest in some sectors, the minimum wage and cost of living allowance (CoLA).

“Labour relations and social policy in 2022 were affected by the war in Ukraine and the sanctions imposed on Russia, creating severe shortages and particularly high price increases in food, raw materials and energy,” said an announcement from the Employers and Industrialists Federation (Oev) ahead of the AGM.

“In addition, a significant number of businesses continued to be affected for the third year in a row by the effects of the pandemic and supply chain disruptions, mainly affecting the retail trade, industrial products, automotive and businesses that are active in the tourism and catering sectors,” it said, adding that the successive crises and the negative economic effects have created an unstable business and work environment.

Oev said it has taken a leading role in managing the new crisis created by the war in Ukraine by receiving feedback from affected businesses and submitting specific recommendations to the relevant ministries.

In this context, it said, it had adjusted its objectives and strategy accordingly with the aim of supporting the economy and businesses while trying to minimise losses.

Special emphasis had been placed on industrial peace and on the peaceful renewal of collective agreements while trying to contain labour costs and preserve jobs.

In 2022 collective agreements had expired in the hotels sector, carpentry, construction and shipping. Several were not renewed and remained under negotiation at the beginning of 2023.

There was however some upset in 2022 due to failure to renew collective agreements at the ports of Larnaca and Vasiliko, at both airports among ground staff, and in the public transport sector involving bus drivers. It also mentioned a strike threat by electricity workers that was suspended after discussions with the government.

To try and counter such strikes, Oev said it had once again raised its own proposal for a mechanism to resolve labour unrest in essential services “which the social partners agreed on in 1999 and which the unions refuse to implement”, it said.

The federation also referred to the establishment of the minimum wage, which it has opposed.

“Our initial reaction was, in line with its long-standing position, not to legislate the minimum wage, explaining that this would change the existing industrial relations system, removing the flexibility provided to determine the terms of employment of workers through collective bargaining,” it said.

“Given the political decision to establish it, Oev adjusted and promoted its positions and recommendations with the aim of limiting the negative effects of such a development, At a time when the economy remains vulnerable to exogenous risks, it is an additional destabilising factor,” it added.

In September 2022, the government issued its decree on minimum gross wage setting it at €885 per month and after six months of continuous employment with the same employer, €940.

Oev said on top of this, CoLA was also increasing labour costs. The setting of a minimum wage should see CoLA being abolished, it said.

Businesses are also being faced with a labour shortage almost across the board, the federation said. This is an ongoing issue for employers. Others include the impact of remote working, digitisation in all sectors, safety and health, parental leave, retraining of the unemployed and gender equality.