Unions reject government proposal to scale back CoLa

Trade unions have made “significant concessions” in the ongoing negotiations on the restoration of the cost-of-living allowance (CoLA), but rejected the government’s proposals, which they say would lead to its “degeneration”, Pasydy secretary-general Stratis Mattheou said on Saturday.

“The proposal leads to the degeneration of CoLA – essentially meaning that it would only be granted when certain conditions are met, whereas it should be given every year to offset salary erosion caused by inflation,” Mattheou added.

He expressed doubts about the continuation of negotiations, which have been taking place with employers’ organisations Oev and Keve under the auspices of Labour Minister Yiannis Panayiotou.

Mattheou said the unions had already accepted a gradual restoration of CoLA to 100 per cent by 2028, as well as the establishment of an inflation ceiling – meaning the allowance would only be paid up to a specific rate.

However, the most recent government proposal links CoLA to both growth and inflation rates and sets a salary threshold above which the allowance would no longer be paid.

Mattheou announced that unions will hold another meeting on Monday afternoon to decide on further action, without ruling out additional measures.

The latest joint CoLA meeting, attended by Finance Minister Makis Keravnos, Labour Minister Panayiotou and employer organisations, was held on Friday.

Following the meeting, the heads of the trade unions spoke of a serious setback, accusing the employers’ organisations of attempting to “degenerate” CoLA.

Peo secretary-general Sotiroula Charalambous said union representatives left the meeting disappointed by the employers’ stance.

“Unfortunately, with what we heard today, we have gone backwards. It is obvious that we are at an impasse,” she said, stressing that the unions demanded that CoLa be applied to all workers.

The labour ministry later issued a statement saying “intensive efforts” to reach an agreement will continue, adding that both unions and employers have shown a positive approach.

Speaking to Cyprus News Agency, Cyprus Chamber of Commerce and Industry (Keve) secretary-general Philokypros Rousounidis emphasised employers’ commitment to social dialogue and said they are open to further discussions.

“We are not very satisfied either, but we do not want to escalate the situation further and will await the next steps,” he said.