Dorita Yiannakou
Cyprus is set to take a key step in labor relations with the signing of an agreement in principle on the Automatic Wage Adjustment (ATA), government officials announced Thursday.
The signing is scheduled for 2 p.m. at the Presidential Palace, following a morning meeting between President Nikos Christodoulides and leaders of the country’s main trade unions.
Government spokesperson Konstantinos Letymbiotis shared the update on X, noting that the agreement represents a collaborative effort between social partners to address wage adjustments and labor concerns.
According to Dorita Yiannakou, the deal was reached after President Nikos Christodoulides personally stepped in to smooth over disagreements between unions and employers.
The agreement came after two key changes to the draft satisfied the unions. First, the wording requiring employer action to extend the ATA to workers not yet covered was changed from “measures” to “policies,” giving employers more flexibility while keeping unions on board. Second, the minimum wage adjustment was linked to the ATA, with a promise to review the rate again in 2028.
Under the deal, ATA payments will start at 80% on Jan. 1, 2026, rise to 90% on July 1, 2026, and reach 100% by July 1, 2027. Going forward, the adjustment will happen every July based on the previous year’s growth, as long as it’s positive, with a cap of 4% for inflation. The agreement also sets up a labor advisory body to step in during economic crises.
Union leaders from SEK, PEO, DEOK, and PASYDY, along with employer representatives, will attend the signing at 2 p.m. at the Presidential Palace and are expected to make public statements afterward.
The deal represents a compromise designed to protect workers’ pay while giving employers room to adapt, marking a major step forward in Cyprus’ labor policies.
