Decisive day for CoLA talks

Trade union organisations will hold a pan-union meeting on Wednesday afternoon to determine how cost-of-living allowance (CoLA) will be applied across public and private sectors.

The unions and employers’ organisations will meet at 3pm at the journalists’ house in Nicosia to finalise their positions.

The unions will receive updates from the negotiating teams of Sek, Peo, Deok, and Pasydy. After the briefing, the unions will decide whether to accept the agreement shaped so far.

Following the union meeting, at 4pm, the executive committees of employers’ organisations, including the Cyprus chamber of commerce and industry (Keve) and the employers and industrialists federation (OEV), will convene at the young trust union building in Nicosia.

Last Sunday evening, employers’ organisations met with President Nikos Christodoulides at the presidential palace to discuss the framework agreed on Friday with the ministers of finance and labour. President Christodoulides described the meeting as “very productive” and said he expected final decisions from the employers within 24 hours.

President Christodoulides also met with trade unions on Monday evening. Sources indicate that conditions are emerging for a possible agreement.

The discussions follow a Friday meeting of “social partners” and a Sunday dinner at the presidential palace.

The government initially proposed a worker-friendly policy framework granting CoLA to all employees on a graduated basis. Employers opposed the plan, and union leaders criticised the labour minister, questioning the feasibility of the policy.

The original policy did not require social partners’ agreement and could have been enacted through legislation or a presidential decree. Employers have long viewed CoLA as burdensome, while unions have focused on maintaining the existing system and increasing benefits for public sector employees, especially those affiliated with Pasydy.

Unions have resisted proposals that would reduce CoLA contributions for public sector employees, including graduated distributions based on salary or a cap at approximately €2,500 per month. Even after ministers of labour and finance suggested removing the graduated system or the €2,500 cap, unions did not mobilise support to extend CoLA to employees who currently do not receive it.

For small and medium-sized private sector workers, who currently lack CoLA coverage, the agreement is expected to offer little immediate benefit. The government has said it will continue efforts to expand coverage and may introduce incentives for employers.

Wednesday’s meetings are expected to clarify how CoLA will be applied across sectors and whether broader coverage can be achieved in future agreements.