A crucial day for the automatic cost-of-living allowance will unfold this afternoon, with unions and employers convening separately to decide whether Cyprus edges towards a long-sought agreement on CoLA. As Politis reported yesterday, the breakthrough now depends on the employers’ organisations, since the unions have accepted the convergence framework shaped during Friday’s marathon meeting.
Unions convene at 15:00
At 15:00, thirteen trade union organisations meet again at the Journalists’ House for a pan-union briefing from the negotiating team of SEK (Cyprus Workers’ Confederation), PEO (Pancyprian Federation of Labour), DEOK (Democratic Labour Federation of Cyprus) and PASYDY (Pancyprian Public Employees’ Trade Union). They will then decide whether to approve the agreement as it currently stands.
At 16:00, the executive committees of the employers’ organisations, CCCI (Cyprus Chamber of Commerce and Industry - also known as KEVE) and OEB (Cyprus Employers & Industrialists Federation), will hold a joint session at the Union of New Trusts premises in Nicosia. Their verdict will determine whether the process moves to closure or returns to stalemate.
Presidential shuttle over the weekend
On Sunday night, employers met President Nikos Christodoulides to discuss the framework agreed on Friday in the joint meeting with the ministers of finance and of labour and social insurance. The president described Friday’s encounter with employers’ leaders as very productive and said the government expects their final decisions within the next 24 hours.
As reported by Politis, the unions view the current framework as an acceptable first step that could allow CoLA to expand over time to cover a larger share of the workforce. Employers’ assent is therefore decisive. According to information carried by Politis, a segment of employers remains strongly opposed to awarding CoLA annually on the national minimum wage. These disagreements surfaced again during Sunday’s meeting at the presidential palace in the presence of the two competent ministers.
Tax relief sweetener
On tax treatment, and specifically the annual reimbursement to employers of part of the CoLA granted, the government appears to have raised the relief to 30 percent from 15 percent, though an earlier version of the framework had floated 50 percent.
The framework emerging from Friday’s lengthy negotiation proposes a phased extension of CoLA to 100 percent for those already receiving it within 18 months, with no tiered payout and with annual incorporation into the national minimum wage. It introduces a 4 percent cap as the maximum inflation rate recognised. CoLA would be awarded once a year, provided the previous year’s real GDP growth rate is positive.
What to watch next
If unions endorse the framework at 15:00 and employers follow suit at 16:00, the government could move swiftly to formalise the agreement and set an implementation timetable. If employers hold back, the process risks slipping again, despite clear union readiness to proceed.
With information from CNA