Dorita Yiannakou
Instead of reducing problems linked to the employment of third-country nationals, the Labour Ministry’s new electronic platform appears to be creating further distortions in the labor market, industry representatives warn, claiming that applications can be submitted without sufficient verification and monitoring.
The management of foreign workers’ employment has become one of the most pressing issues facing Cyprus’ labor market in recent years. The issue has once again come under the spotlight after trade unions raised concerns over continued cases of worker exploitation.
Unions have also pointed to violations of collective agreements, where they exist, resulting in foreign workers receiving wages below the agreed levels.
Meanwhile, as Kathimerini has previously reported and as recently highlighted by trade unions SEK and PEO, the illegal practice of companies “renting out” workers to businesses in sectors such as hospitality and tourism continues, creating labor market imbalances and raising questions over legality and oversight.
According to industry professionals who spoke to Kathimerini, Cyprus’ strategy for employing third-country workers has led to a significant increase in foreign labor entering the country, changing the way applications for work permits are handled.
However, they argue that this increase has not been matched by stronger state inspection mechanisms, making it harder to monitor working conditions and ensure compliance with labor laws.
Industry representatives also revealed that lawyers are playing an increasingly larger role in submitting applications for work and residence permits, reducing the traditional role of licensed private employment agencies.
They say this shift is changing the way the foreign worker recruitment system operates and creating new challenges for the market.
Concerns over illegal practices, exploitation of foreign workers, and the arrival of workers without sufficient oversight were recently discussed at a meeting involving labour ministry officials, industry representatives, and labour minister Marinos Mousiouttas.
Growing distortions in the labour market
The growing dependence of key sectors of Cyprus’ economy, including construction, tourism, agriculture, and manufacturing, on workers from outside the European Union has made the licensing and monitoring system crucial, both for meeting business needs and protecting workers’ rights.
However, according to licensed employment agents, the online platform for submitting foreign worker employment applications, which has been operating for about a year under the Labour Department, is increasing risks of exploitation and creating conditions for unfair competition.
They argue that the platform allows applications to be submitted without properly verifying the identity or status of the applicant.
At the same time, the lack of meaningful checks during the application process allows foreign workers to enter Cyprus without sufficient assessment of their qualifications or clear accountability from the person or organization submitting the application.
Industry representatives warn that this creates serious risks. Foreign workers may arrive in Cyprus without the working conditions they were promised, or even without guaranteed employment.
The situation also affects employers, who may later face problems regarding the suitability or legality of the workers they hire.
At the same time, they argue that these practices distort the labor market, encouraging unfair competition and irregularities.
They also warn that such problems damage Cyprus’ international reputation by creating the impression of a system that does not adequately safeguard legality, transparency and proper management of foreign labor.
During the meeting with Minister Mousiouttas, industry representatives stressed that the absence of effective inspections and penalties creates a sense of impunity, encourages illegal practices, and undermines confidence in the system.
Cyprus-Egypt labour agreement under scrutiny
The meeting also addressed the bilateral agreement between Cyprus and Egypt, which aimed to bring around 1,000 Egyptian workers into the Cypriot labor market through state mechanisms.
Representatives noted that despite almost two years having passed since the agreement was signed, the expected results have not been achieved.
According to industry groups, the main reason for the failure was that the agreement did not include licensed private employment agencies.
They argued that these agencies play a key role in practice by finding employers, assessing workers’ suitability, resolving recruitment problems, and monitoring the smooth integration of workers into the labor market.
The lack of this intermediary role, they said, contributed significantly to the agreement’s limited effectiveness.
Industry representatives called on the Labour Ministry to introduce targeted measures to protect licensed private employment agencies, ensure fair competition, and reduce illegal practices.
They also suggested restoring a previous requirement that applicants must have two to three years of professional experience before receiving an operating license.
Currently, around 300 licensed private employment agencies operate in Cyprus, with approximately 40 more licenses expected to be issued.
The need for stronger oversight
Effective management of third-country worker employment requires stronger inspection mechanisms, a clearer legal framework, and closer cooperation between government services and industry bodies, representatives said.
Without proper supervision and coordination, they warned, labor exploitation could increase and further distortions could emerge in the labor market.
The main concern raised is that the digitalization of procedures by the Labour Ministry and the Deputy Ministry of Migration was not accompanied by the necessary monitoring systems, clear regulations, or sufficient oversight.
As a result, the application process contains significant gaps, with limited evaluation of applications and insufficient checks, creating opportunities for illegal practices.
Industry representatives stressed that for the electronic platform to function effectively, it requires stricter verification procedures, a clear definition of who is allowed to submit applications, penalties for those violating the rules, and additional staffing for the relevant authorities.
