Today, Wednesday, May 3rd, employers will have a meeting regarding the Cost of Living Adjustment (CoLA) index, and on Thursday, May 4th, the trade unions will have theirs. A middle-ground proposal presented by the Minister of Labour and Social Insurance, Yiannis Panagiotou, on April 28th to the social partners has not yet been agreed upon. Both employers and trade unions see areas that could be improved in the minister's middle-ground proposal for the CoLA index. The decision will affect just under 200,000 employees in Cyprus or roughly one in two workers. Specifically, CoLA beneficiaries are employees in the public and wider public sector (semi-governmental) and employees of local government. Large sectors in the private sector, such as construction and hotels, and anywhere else where there are collective agreements, such as banks, are also beneficiaries.
CoLA is granted up to 50% of the annual increase in the Consumer Price Index, on the condition that the economy records positive growth rates in the second and third quarter of the previous year.
During the meeting of the unions on Tuesday, May 2nd, a decision was made to convene a new pan-syndicalist meeting on Thursday, May 4th. This meeting aims to inform the public sector organizations of SEK, PEO, DEOK, and PASYDY. Further discussions will continue, with the unions expected to give their final position on the proposal presented to them by Mr. Panagiotou on Friday, May 5th, during the joint session at the Ministry of Labor. Employers will also examine Mr. Panagiotou's intermediary proposal and give their final position, despite their opposition to the nature of the CoLA index. The employers have expressed their willingness to carefully consider the minister's proposals with respect. The unions are committed to finding a permanent acceptable solution, while the employers have repeatedly stressed the need for a different solution outside the framework of CoLA, which they consider an outdated institution. Nevertheless, there is hope that parties with a positive attitude will work towards reaching an agreement on CoLA, as expressed by the Minister of Labor in his statements to the media since Friday, April 28th. The minister's permanent position is to renew the agreement, maintain labor peace, and implement the proposal based on the possibilities of public finances.
The Cost of Living Allowance (CoLA) is granted up to 50% of the annual increase in the Consumer Price Index, on the condition that the economy records positive growth rates in the second and third quarter of the previous year. This allowance aims to counterbalance the yearly loss of purchasing power that consumers face due to inflation-induced price hikes.
On April 28th, the government presented an intermediary proposal to social partners, which the minister based on four points. Firstly, the renewal of the 2017 interim agreement for three years. Secondly, an increase in the ATA payment percentage to two-thirds of the Consumer Price Index, up from the current 50% (i.e., 66.7% instead of the previous 0%). Thirdly, the immediate payment of wage increases to employees from June 1st, based on the 2022 inflation rate. Finally, the development of a structured social dialogue to reach an integrated agreement that will be made permanent until 2025.