Major trade unions in Cyprus have escalated their demands, presenting President Nikos Christodoulides with a comprehensive memorandum outlining four significant reforms. These proposals aim to fundamentally reshape the country's labour landscape, potentially leading to significant industrial action as early as 2026. The unions, representing a substantial portion of the workforce, are advocating for a more robust and equitable system for all employees.
The recent 8.8% increase in the national minimum wage, raising it to €1,088 from €1,000, has not satisfied the unions' core concerns. Although this adjustment, implemented at the beginning of the year, was intended to address the rising cost of living, unions argue it is insufficient for many workers. Their memorandum explicitly calls for the establishment of an hourly minimum wage, which they believe would better reflect the diverse and fluctuating nature of modern employment patterns.
Furthermore, the unions are strongly pushing for the wider adoption of collective bargaining agreements, a goal supported by European Union directives designed to promote fair competition and worker protection. They contend that a broader application of these agreements is essential for a more equitable distribution of economic gains and for creating a level playing field within the business sector. The unions also seek a strategic review of policies affecting third-country nationals and the full implementation of the Ergani 2 labour monitoring system to improve transparency and compliance.
However, employers' organisations, including the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Employers and Industrialists Federation (OEB), have expressed strong reservations. They are resistant to renegotiating agreements that have already been finalized. Michalis Antoniou, Director General of OEB, warned that mandating an 80% coverage rate for collective agreements could destabilize existing labour relations. The Employers' Union, through its President Metin Arhun, highlighted the current challenging economic climate, exacerbated by regional geopolitical issues and persistent inflation, which are straining both businesses and households.
Arhun cautioned against an exclusive focus on wage increases, stating, "The minimum wage, as its name suggests, is the lowest wage; it is not a living wage." He emphasized the necessity of a holistic approach to economic challenges, advocating for comprehensive solutions beyond mere salary adjustments. The government's agenda also includes pension reform, which was postponed until 2025, aiming to ensure the long-term financial health of the Social Insurance Fund while improving pension benefits for low-income retirees. The Minimum Wage Determination Commission recently convened for its second session, tasked with setting the minimum wage for the first half of 2026 amidst these heightened expectations and entrenched positions.
The coming months will be crucial for Cyprus's labour market. The unions' persistent efforts for systemic reforms, combined with employers' concerns about potential disruptions, place the government in a complex mediating role. The outcomes of these negotiations will significantly influence immediate labour conditions and shape the foundational principles governing state intervention versus market forces in the nation's economic future. As Metin Arhun wisely commented, "We must think together and act collectively as much as possible," underscoring the urgent need for collaborative problem-solving to navigate the intricate challenges ahead.