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Cyprus MPs are seeking answers from the authorities over allegations that workers are being illegally leased to businesses, with trade unions telling Parliament that some cases may be connected to human trafficking.
The issue was discussed on Tuesday by the House Labour, Welfare and Social Insurance Committee following an initiative by AKEL. Committee chair George Koukoumas said trade unions had reported extensive use of temporary employment arrangements in sectors where such practices are prohibited by law, including construction and tourism.
According to the complaints presented to MPs, some workers are transported to workplaces and construction sites by individuals operating as employers or intermediaries, then employed under what unions described as degrading conditions and very low pay.
Koukoumas said the committee had also been told that worker leasing can, in some cases, be linked to trafficking and the exploitation of people.
The Labour Ministry has acknowledged that cases involving the leasing of workers have been identified in Cyprus, Koukoumas said. MPs are now waiting for details on the cases detected by authorities, including whether sanctions were imposed, fines issued or criminal investigations launched.
The committee is also seeking an explanation for the delay of legislation concerning the construction sector and the legal responsibilities of main contractors. Koukoumas said the bill could help close legal gaps that may allow unlawful practices to continue.
DISY MP Andreas Konstantinou said inspections must clearly distinguish between legitimate service contracts and the provision of workers through temporary employment agencies.
He also called for authorities to establish how many businesses may be operating outside the legal framework and determine the scale of the problem.
“If gaps are identified in the existing legislation, we are ready to examine the necessary legislative measures,” Konstantinou said, adding that the aim should be a clear and effectively enforced legal framework capable of preventing cases of modern-day trafficking.
Provident funds also on the committee agenda
The Labour Committee also examined legislation concerning the establishment and supervision of occupational retirement benefit institutions.
Koukoumas said the bill is intended to bring Cyprus into line with European requirements while also addressing provisions under national law.
He questioned the delay in advancing the legislation, saying the European Commission had issued a reasoned opinion over Cyprus’ failure to complete the process on time.
The discussion also touched on regulations governing how provident funds invest their assets. Koukoumas said Parliament must ensure that workers’ savings are protected.
He argued that provident funds have an important role in supporting retirement income, particularly in Cyprus, where he said pensions replace around 40% of a worker’s previous income, compared with about 70% elsewhere in Europe.
Koukoumas also pointed to the relatively low level of provident fund coverage in Cyprus, saying only 27% of workers currently have access to one.
He called for coverage to be expanded through collective agreements and a clear roadmap, pointing to countries including the Netherlands, Sweden, Finland and Denmark, where participation is close to universal.
The committee is expected to continue examining both issues as it awaits further information from the Government and the relevant authorities.
