Cyprus’s main employer organisations, the Cyprus Chamber of Commerce and Industry (KEVE) and the Employers and Industrialists Federation (OEV), have responded to the recent European Court of Justice ruling on the EU Directive for Adequate Minimum Wages, clarifying that it does not oblige member states to extend collective agreements.
Directive promotes dialogue, not obligations
In their announcements, both KEVE and OEV underlined that the directive’s purpose is to promote social dialogue rather than impose mandatory wage-setting mechanisms or binding coverage thresholds.
KEVE highlighted that Cyprus already has several frameworks that support collective bargaining, including the Industrial Relations Code, the Law on the Recognition of Trade Unions, the Trade Unions Law, and strike regulations in essential services.
According to KEVE, the Court “made it clear that member states are not required to enforce the extension of collective agreements, as some unions have claimed.” The organisation added that “the directive calls for the strengthening of social dialogue but does not infringe on the freedom of the parties to decide whether or not to negotiate, nor on their right to set their own terms.”
No mandatory 80% threshold
OEV stressed that the 80 percent benchmark for collective bargaining coverage is not a mandatory target but a reference point. It simply triggers an obligation for member states to prepare an action plan aimed at promoting collective wage negotiations.
“At no point does the directive impose an 80 percent coverage rate for collective agreements,” OEV stated. “Nor does it require that more workers join trade unions,” it added.
The federation also noted that the directive does not compel member states to declare collective agreements universally binding.
“In a wide range of provisions, member states are required to ensure the participation of social partners, while fully respecting the autonomy of organisations and their right to negotiate and conclude collective agreements freely and voluntarily,” OEV concluded.