Labour Minister Yiannis Panayiotou says negotiations between unions, employers and the state are continuing with a view to extending the cost-of-living allowance (CoLA) more broadly across the workforce. The objective, he noted on “Alpha Enimerosi,” is a shared agreement on how wider coverage should work in practice.
The four routes under consideration
1) Time-bound roadmap. One option is a negotiated agreement that sets milestones and a phased timeline. Panayiotou called this a softer instrument with more limited impact.
2) Collective agreements first. Another path would lean on sectoral collective bargaining, expanding unionisation and embedding CoLA in industry contracts (as already happens in areas such as construction). This is the most organic approach but may deliver uneven results across sectors.
3) Targeted protection via the minimum wage decree. Tools within the national minimum wage framework could be used to shield lower-paid workers as coverage widens.
4) Universal mandate by law. If consensus emerges through social dialogue, Parliament could legislate to make CoLA payments compulsory for all employees, much like social insurance contributions, the statutory minimum wage, and legally required benefits for redundancy, sickness and maternity.
Panayiotou urged both sides to be explicit about their red lines. If employers accept that a modernised CoLA would be a more rational system, they should explain any hesitation about extending it. Equally, unions should spell out potential flashpoints, such as paying 100% CoLA on the full salary of a bank CEO, so disagreements can be addressed upfront.
“Not a sudden shift”: Preparatory work cited
Pushing back on claims of an abrupt “CoLA for all,” the minister said the government has done its homework, assessed the data with technical support, and mapped multiple implementation paths.
The equity problem with blanket expansion
Even if coverage rose to roughly 60% from about 35% today, Panayiotou said, around 40% of workers would still be left unprotected from rising prices. When the protected group is limited, those outside it become “doubly vulnerable.” For that reason, he warned that a flat, across-the-board expansion risks widening inequality.
The guiding principle, he said, is to protect all workers while designing CoLA so it primarily benefits low-income earners and the middle class.
