Cyprus’ leading trade unions have confirmed that talks over the cost-of-living allowance (CoLA) have reached a deadlock and preparations for possible strike action are back on the table. The latest development follows failed efforts to reach common ground between workers and employers, despite earlier signs of partial progress in the hotel sector.

Sek general secretary Andreas Matsas told the Cyprus News Agency that dialogue has stalled and the government has shown no intention of stepping in.

“The last point of reference was our meeting with the labour minister. After his meeting with the employers and confirmation of their positions, we believe the process has frozen,” Matsas said.

Unions are now expected to meet again shortly to determine their next steps.

“There is no convergence on principle. The views of the two sides are diametrically opposed. The deadlock is clear,” Matsas stated.

An all-trade-union conference originally planned for July 24 was postponed due to wildfires in Limassol. Since then, frustration has grown within the labour movement.

The roots of the current tension lie in the hotel sector. Unions had previously announced strike action against certain hotel groups that failed to implement terms agreed in the renewed collective agreement signed in December. These included a 13th salary, increases in employer contributions to the provident fund and double pay during Easter, Christmas and New Year.

However, that strike never took place. According to a joint announcement by Peo and Sek, the decision was put on hold after a meeting between union leaders revealed that some hoteliers had shown signs of cooperation. They described the response as “partially positive.”

At the same time, unions expressed disappointment that the labour relations department had not completed mediations over formal complaints, despite repeated calls to speed up the process.

As a result, the unions said that while their strike decision remains in force, they will wait for further developments. Their secretariats are due to reconvene next week to re-evaluate the situation based on new data.

Meanwhile, employers’ groups Pasyxe and Stek continue to stress the importance of maintaining labour peace, highlighting the strength of the Cypriot economy and the need for cooperation. They argue that turning agreed points into binding regulations was not part of the deal.

However, a senior labour ministry official has contradicted this view, stating that in December hoteliers signed a document confirming that the provisions would be codified into law.

Trade unions insist the agreement is sector-wide and accuse several hotels, including signatories, of non-compliance.

Labour Minister Yiannis Panayiotou is currently mediating under the industrial relations code. But unless clear progress is made, unions warn that strike action across the sector is likely.