Crucial CoLA meeting not getting off to best start
09:46 - 05 May 2023
A crucial meeting on 5 May between trade unions, employers’ federations and the Labour Ministry to reach a compromise on a raging dispute over the cost of living allowance (CoLA) has been overshadowed by the unions’ rejection of a mediation proposal by the government.
Some 13 trade unions gathered to discuss the proposal, later issuing a joint statement that they could not accept Labour Minister Yiannis Panayiotou’s suggestions.
In a bid to break the deadlock between unions and employers, the minister has proposed renewing the 2017 interim agreement for another three years and increasing CoLA to two-thirds of the Consumer Price Index. This would mean that the CoLA indexation incorporated into basic salaries would go up to a 66.67% from the current 50%.
However, the unions said any new deal “must come within the context set out in the 2017 transitional agreement on CoLA, and under no circumstances do we accept elements that distort or degrade the philosophy governing CoLA”.
On the other end of the spectrum, the Employers and Industrialists Federation (OEV) announced that after much consideration, it accepted the minister’s compromise proposal; provided the minister makes good on his pledge to find a definitive resolution to the CoLA issue before 2025. The federation said it is willing to compromise as it likes to “look at the big picture” and not disrupt peace in the labour market. But then, it added, the minister’s proposal was more or less ‘Take it or leave it’.
OEV reiterated that it disagrees in principle with the payment of CoLA, which it sees as “an obsolete system that feeds into inflation, widens the wage gap between high earners and low earners, disproportionately affects production costs, undermines businesses’ competitiveness, harms exports and erodes the economy as a whole”.
The separate announcements came a day ahead of a crunch meeting between the minister, unions and employers.