**Nicosia, Cyprus** – A tripartite standoff is escalating in Cyprus as major trade unions have presented President Nikos Christodoulides with a substantive memorandum outlining four key demands, signalling potential labour unrest as early as 2026. The unions – SEK, PEO, and DEOK – are advocating for a fundamental recalibration of the nation's labour landscape, encompassing everything from the establishment of an hourly minimum wage to the pervasive implementation of collective bargaining agreements.
The recent imposition of an 8.8% increase on the national minimum wage, bringing it to €1,088 from €1,000, has done little to assuage union concerns. While this adjustment, enacted at the commencement of this year, was seen as a government intervention to address rising living costs, unions contend it falls short of meeting the genuine needs of a significant portion of the workforce. Their memorandum, delivered to the President and the Labour Minister, Marinos Mousiouttas, underscores a desire for a more dynamic and responsive minimum wage mechanism, specifically proposing an hourly rate to better reflect fluctuating work patterns.
Beyond wages, the unions are championing the expansion of collective agreements, an objective strongly encouraged by an EU directive aimed at fostering fairer competition and preventing the exploitation of workers. They argue that a broader application of these agreements is crucial to ensuring a more equitable distribution of economic benefits and to levelling the playing field for businesses. Furthermore, the unions are calling for a strategic revision of employment policies concerning third-country nationals and the robust implementation of the Ergani 2 labour monitoring system, a measure designed to enhance transparency and compliance within the employment sector.
However, the employers' organisations, including the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Employers and Industrialists Federation (OEB), have voiced strong opposition to reopening agreements that have already been settled. Michalis Antoniou, Director General of OEB, expressed apprehension that mandating an 80% coverage rate for collective agreements could precipitate instability within the established labour relations framework. The Employers' Union, represented by its President Metin Arhun, has highlighted the prevailing challenging economic climate, exacerbated by regional geopolitical developments and persistent inflation, which are placing considerable strain on both businesses and households. Arhun cautioned against a singular focus on wage hikes, stating, "The minimum wage, as its name suggests, is the lowest wage; it is not a living wage." He stressed the imperative for a holistic approach to economic challenges, advocating for comprehensive measures that extend beyond mere salary adjustments.
Adding another layer to the ongoing discourse is the matter of pension reform, a topic that saw its progression deferred in 2025. The government's objective is to ensure the long-term financial viability of the Social Insurance Fund while simultaneously enhancing pension provisions for low-income retirees. The Minimum Wage Determination Commission convened for its second session recently, tasked with the crucial responsibility of setting the minimum wage for the initial half of 2026, a process that occurs against this backdrop of heightened expectations and entrenched positions.
The upcoming period is poised to be a critical juncture for Cyprus's labour market. The unions' concerted push for systemic reforms, coupled with the employers' reservations about potential disruption, places the government in a delicate mediating role. The outcome of these negotiations will not only determine immediate labour conditions but also shape the fundamental principles governing state intervention versus market forces in the nation's economic future. As Metin Arhun of the Employers' Union wisely noted, "We must think together and act collectively as much as possible," a sentiment that encapsulates the urgent need for collaborative problem-solving to navigate the complex challenges ahead.