Supreme Court: public sector pay cuts during financial crisis constitutional

The Cyprus Supreme Court on Friday overturned earlier rulings by the Administrative Court, finding that cuts made to public sector employees’ salaries and pensions during the economic crisis of 2013 were in accordance with the Constitution.

In statements after the ruling, Attorney General Costas Clerides said that “the key message sent, with this extremely important ruling is that individual rights as they are protected by article 23 of the Constitution, which is the right to property including a salary, are absolutely respected and protected.”

In a majority ruling the Supreme Court plenary allowed the appeals brought before it by the state against judgments of the Cyprus Administrative Court which had at first instance ruled on 29 March 2019 that cuts made to salaries and pensions of employees working in the wider public sector during the 2013 economic crisis had been unconstitutional.

If the Supreme Court had dismissed appeals lodged by the state, the Cyprus government would have had to bear a burden to the tune of over €1 billion.

In statements, Clerides said that “all appeals brought on behalf of the Republic and other public law bodies have been allowed, resulting essentially in the first instance judgments by the Administrative Court to be overturned.”

In short, he added, it was judged that cuts on salaries and pensions, as well as automatic wage adjustments and salary increases of public servants “are constitutionally allowed and legal.”

Since the core exercise of this right has not been compromised, the state can go ahead with certain reductions, which must off course be fully justified and proportional, that is to say as to the aim they seek to achieve, he added.

Replying to a relevant question, Clerides pointed out that the ruling of the Supreme Court sets a precedent so that under similar circumstances the state could act in the same manner legitimately and in full accordance with the Constitution.