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Collective Bargaining

There is both industry and company-level bargaining in Cyprus. In total probably over half of all employees in Cyprus are covered by collective bargaining, although precise figures are not available.

The framework


The basic framework for negotiations is provided by the industrial relations code, which was agreed between representatives of employers, unions and government in 1977. This includes a procedure for the settlement of disputes and some key mutual commitments, such as acceptance of the right to organise and the right to bargain. The document is not legally binding but its terms have been effectively observed by both sides.


The code was agreed at national level and there have been other national agreements between the confederations and employers, such as the 1992 agreement on overall reductions in working time and the agreement on disputes in essential services signed in 2004. 


Collective bargaining in Cyprus takes place at both industry level and company level. Key industry-level collective agreements in the privates sector cover hotels, metalworking industries, oil and construction.


However, although industry level bargaining continues to be important, many companies, both inside and outside the coverage of the industry level agreements, negotiate at company level. In some cases they set the pay and conditions of those not covered at industry level, in others they improve on the agreed industry rates. In November 2018, a report to the general meeting of the PEO union confederation noted that 237 agreements have been renewed in the course of the year.[1] Both unions and employers consider that the balance between company and industry-level bargaining may be shifting, with company level bargaining becoming more important.


Since 2012, unions have had a legal right, under certain conditions, to compel individual employers to negotiate with them under the trade union recognition law (Law 55 (I)/2012). If an employer refuses to negotiate with the union, the union can ask the Trade Union Registrar to investigate, provided there are at least 30 employees in the bargaining unit – the area where the union is seeking to negotiate – and at least 25% of the workforce are already members of the union. In these circumstances the Trade Union Registrar will conduct a secret ballot, and, if a majority of the workforce vote in favour, the employer is compelled to negotiate with the union, in other words to recognise it. Recognition is also granted without a ballot, where the union can show that it already has more than 50% of the workforce in membership.


As well as company and industry-level bargaining in the private sector, there is widespread collective bargaining in the public and semi-public sector, where the coverage is close to 100%.


Overall the Department of Labour Relations estimates on its website that, when Cyprus joined the EU in 2004, 70% of all employees were covered by collective bargaining.[2] It seems likely that the level of coverage has fallen since then, and   but there are no official figures.


Suggestions that collective agreements should be given legal force, with the possibility of extending them to those not directly covered, were abandoned in 2013.


An important element in industrial relations in Cyprus is the system of mediation and voluntary arbitration. Based both on the voluntary industrial relations code and the service provided by the ministry of labour, this has been used to resolve deadlock in collective bargaining and in settling disputes.


In addition to collective bargaining, there are a large number of tripartite bodies, bringing together the unions, employers and the government. The most significant are the Labour Advisory Board and the National Employment Committee, but there are a range of others chaired by the labour minister, including the Productivity Council and the Pancyprian Council for Safety and Health, as well as other more technical bodies with less high-level political representation.[3]  The unions are represented through the union confederations, PEO, SEK and DEOK.

Who negotiates and when?


Industry level negotiations are between the appropriate industrial federations or, in some industries such as banking, the autonomous union and the relevant employers’ association.


At company level, the parties are the employer and the local trade union, generally through the full-time union official, with the involvement of the union representatives in the company.


Agreements normally last two years, sometimes extended to three, at both industry and company level.


The subject of the negotiations


Agreements cover pay, working time, holidays, travelling and other allowances, as well as procedural issues such as trade union facilities and dismissal procedures.


In the past, many collective agreements also included a cost of living allowance, which was uprated in line with inflation. However, this system was disrupted by the financial crisis and the bail out which followed. Cost of living allowance payments in the public sector were frozen from 2011 to the end of 2016 (alongside other measures to cut wages), and in the private sector they effectively ceased to apply in 2013.It was only in July 2017, once Cyprus was out of the bailout programme, that the government agreed that the cost of living allowance should be reinstated on a three-year temporary basis from the start of 2018 to the end of 2020. However, under the new arrangements, the increases in the allowance are less frequent, only once a year rather than every six months; they only compensate for half the increase in prices rather than the whole amount; and the payments can be suspended if the economy contracts.[4]


There is no national minimum wage in Cyprus but there is a minimum wage for some specific groups of vulnerable workers, such as clerical workers, shop assistants, childcare workers and personal care workers. However, as part of the bailout package, these minimum rates remained frozen from 2012 to 2017.

[1] Press realease  https://www.peo.org.cy/anakinosis/anak_gs_peo  (Accessed 07.12.18)

[2] http://www.mlsi.gov.cy/mlsi/dlr/dlr.nsf/page43_gr/page43_gr?OpenDocument (Accessed 07.12.18)

[3] http://www.mlsi.gov.cy/mlsi/mlsi.nsf/mlsi26_gr/mlsi26_gr?OpenDocument (Accessed 07.12.18)

[4] Employers take issue with some Cola provisions, Cyprus Mail 26 Huly 2017 https://cyprus-mail.com/2017/07/26/employers-take-issue-cola-provisions/ (Accessed 07.12.2018)

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.