Living and working in Cyprus

Actors and institutions

Trade unions, employers’ organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes the European, national, sectoral, regional (provincial or local) and company levels. This section looks into the main actors and institutions and their role in Cyprus.

Public authorities involved in regulating working life

The Department of Labour Relations (DLR) of the MLWSI is the responsible authority for implementing the Government's policy in the area of industrial relations. Among its main responsibilities, the DLR provides mediation services for the settlement of labour disputes in private and semi-government sectors. Additionally, the department operates a Trade Union Registrar’s Service that is responsible for the registration and monitoring of social partner organisations in Cyprus.

The main institution to ensure the enforcement of employee rights in Cyprus is the labour inspectorates. So far, however, there is no unified body of labour inspectors to coordinate inspection activities. As such, the labour inspectorates report to separate departments of the MLWSI according to the specialisation, jurisdiction and competences of each department. The Labour Inspection Department that was set up in 2002 in the context of ILO Convention 81 covers exclusively the area of workplace health and safety, while the DLR is responsible for the enforcement and inspection of labour legislation. For this reason, the department's inspectors regularly deal with complaints on the non-application of labour laws and actively provide advice to employers on their responsibilities and to employees on their rights. The government has in 2017 submitted a draft law to the House of Representatives unifying all labour inspectorates into one body. As of end of 2018 the draft law was still in the parliament.

Since 2009, the practice of labour inspection teams has come under the DLR; these are teams that operate in the form of multidisciplinary bodies staffed by three labour inspectors from three different departments, the Industrial Relations Department, the Labour Department and the Social Insurance Services. This is an initiative of the Ministry of Labour, in the framework of combating the phenomenon of illegal and undeclared work, which is part of a wider package of measures announced in autumn 2008.

The Department of Labour is also involved in regulating working life, as it has under its jurisdiction the supervision of the application of various relevant legislations, in particular regulating the employment of European citizens and of third-country nationals.

Representativeness

There are no specific criteria for defining the representativeness of employers’ associations and trade unions at national level. In legal terms, the only statutory regulation that might be considered as establishing criteria of representativeness refer to trade union formation and their obligation to be registered with the Trade Union Registrar. The requirement of official registration with the Trade Union Registrar applies also to employer associations, while a similar obligation applies if a trade union organisation or an employer association wishes to withdraw from the Trade Union Registrar or cease to function.

Overall, the most critical factor in assessing the concept of representativeness refers to the organisations’ social dialogue capacity-building. In this context, the social recognition of the social partner organisations and the main criterion for their classification as ‘peak national organisations’ (or ‘central organisations, which is the most relevant term in Cyprus) is whether an organisation is a key player within the existing system of industrial relations. Particularly important are the organisation’s ability to define the terms and conditions of employment through collective bargaining at sector and company level, and its capacity to participate in the consultation process on possible social policy and industrial relations initiatives at national level.

More information on representativeness of the main social partner organisations can be found in Eurofound’s representativeness study of the cross-industry social partners or in Eurofound’s sectoral representativeness studies.

• Publication: Representativeness of the social partners in the European cross-industry social dialogue
• Topic: Representativeness

Trade unions

About trade union representation

As provided for by the Industrial Relations Code (IRC), both sides recognise the right of employers and employees to organise freely and to belong to organisations of their own choice without any interference or victimisation from either side.

• Ministry of Labour, Welfare and Social Insurance: Industrial Relations Code (PDF)

According to the Trade Union Laws, the Trade Union Registrar keeps a register of unions in which each union is obliged to register, after submitting a special application for registration, within 30 days from the date the union is established. To register, each union must have over 20 members, except where fewer than 20 workers are employed in a specific occupation.

In October 2009, a draft bill was introduced to the House of Representatives amending the legislation on trade unions, but as of 2018 it had still not been enacted. It currently lies in the House of Representatives. The draft legislation was drawn up as part of the effort made by the MLWSI since 1995 to modernise the existing legislation and bring its provisions in to line with present-day conditions. For this purpose, extensive consultations were held before the competent tripartite technical committee set up by decision of the Labour Advisory Body (LAB) that lasted for almost 10 years. The main parts of the draft legislation were opposed by the Pancyprian Federation of Independent Trade Unions (POAS) as well as other independent trade unions. One sticking point was Article 9 which increases the minimum number of members required to form a trade union from 21 to 100 people.

In May 2012, law 55(I)/2012 on the Recognition of Trade Union Organisation and of the Right to Provide Trade Union Facilities for Recognition Purposes was passed as part of a package of legislative measures for the modernisation of the system of industrial relations, aimed at strengthening legislation provided for by ILO Convention No. 135. In short, law 55(I)/2012 includes a number of provisions that seek to strengthen rights to bargain collectively and to give trade union representatives access to workplaces, while still respecting employers’ rights.

The rate of union density fell from 76.1% in 1990 to 51.0% in 2008. Although exact figures after 2008 are not available, Trade Union Registrar estimates that by 2011 union density had dropped below 50%. For the period between 2011 and 2015, trade unions estimate that there has been a further decline in union density. Similarly, the three main trade union organisations that are active in the private sector have reported decreasing membership, without, however, providing specific figures. The most affected sectors are construction and manufacturing. In the view of the former Minister of Labour Sotiroula Charalambous, during the period between 2008 and 2014, the decrease in union membership has emerged as one of the most important problems facing the trade union movement, causing a number of difficulties including problems with finances. The declining trend in membership is reported by unions to have stabilised in 2016, in line with the stabilisation of the labour market. In 2017 and 2018, trade unions report increasing membership, though without publishing concrete figures.

Main trade union confederations and federations

In Cyprus, trade union membership is not a requirement of representativeness. In this context the following table includes also trade union organisations that are relatively small in terms of membership but are considered influential in collective bargaining.

Apart from the three peak national organisations – the Democratic Labour Federation of Cyprus (DEOK), the Pancyprian Federation of Labour (PEO) and the Cyprus Employees Confederation (SEK) – and despite notable differences between the private and the public sector, the table also includes three union organisations that are active in the public sector: the Organisation of Greek Secondary Education Teachers (OELMEK), the Pancyprian Union of Public Servants (PASYDY) and the Pancyprian Organisation of Greek Teachers (POED). The reason for including these three organisations is that they correspond largely to the classification of central organisations, mainly in relation to their capacity to influence the outcomes of collective bargaining. For the same reason, the Union of Cyprus Banking Employees (ETYK) is also included.

The table, finally, includes also the Pancyprian Federation of Independent Trade Unions (POAS). POAS was established in 1956 and unites some independent employee organisations mainly active in state-owned enterprises and has an observer status in the Labour Advisory Body. Until the middle of the 2000s, POAS was struggling for survival. In 2007, after eight independent unions – operating in public enterprises – joined the federation, POAS emerged again. POAS member unions are signatory parties of some collective agreements in the broader public sector.

It should be noted that, despite their title as federations (based on the Trade Union Law as amended between 1965 and 1996), DEOK, PEO and POAS are also considered to be confederations.

Main trade union confederations and federations

Source: Trade Union Registrar

Contrary to the trend prevailing with other trade unions, PASYDY’s membership in 2015 appears to have increased compared with the 2008 data. This is due to the Cyprus Police Association that joined PASYDY in May 2011.

At organisational level, there have been no notable developments since 2011 regarding the organisation and the role of the trade unions. During the same period, there were no legislative developments that had a direct impact on the role of the social partners in social dialogue, collective bargaining and industrial conflicts.

The most recent development is the establishment of two new trade unions in the public sector:

1. The Independent Union of Cyprus' Public Employees (ASDYK) was established in November 2014 as a result of a split from PASYDY. ASDYK was registered as a trade union in January 2015. Contrary to PASYDY's organisational structure, the new union’s leadership has a three-year term and a two-term limit. Additionally, any leadership official who gets a promotion will automatically resign his/her post in the union, while union officials will not receive any payment. As of March 2017, the union had 240 members, mostly public employees of a younger age.
2. The Cyprus Trade Union of Self-employed, Fixed-Term and Indefinite-Terms Employees and Contract Employees (EQUALITY) was registered in December 2017. The union aims at organising persons with non-permanent employment relationships in the broader public sector and at the end of 2017 had registered 360 members.

Membership data for 2016, as presented on the above table, indicate stabilisation of the previous years’ decreasing trend. The two country’s peak trade union confederations, SEK and PEO, have slightly increased their members compared with the 2015 data.

Employers’ organisations

About employers’ representation

As far as employer organisations are concerned, to date, the structure, organisation and operation of the employer organisations in Cyprus have not been studied and examined in a systematic way.

Most references in this regard are contained in papers that either examine issues of labour law and industrial relations in general, or approach the issue of the organisation of employer organisations historically.

The two national peak level organisations are the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Employers and Industrialists Federation (OEB). There are no systematic data available regarding the employers’ organisational density. Nevertheless, both CCCI and OEB have reported that there is a clear trend towards increased numbers of members as well as a unique rallying of members. In the view of OEB, the new economic situation that has emerged as a result of the economic crisis and mainly the insecurity of enterprises in the new environment along with the urgent need to find solutions, have led more and more enterprises to seek means of representation and protection of their interests. In this context, losses in membership have been offset by new members that have joined. A noteworthy development in recent years is the wind-down in December 2015 of the Cyprus Bankers Employers’ Association (KEST). KEST was dissolved on the decision of its last remaining members, soon after major banks, such as the Bank of Cyprus and Cooperative Central Bank left the association. Now, the Union of Cyprus Banking Employees (ETYK) will have to negotiate collective agreements with each one of the banks separately.

Employers’ organisations – membership and density

Percentage of employees working in an establishment which is member of any employer organisation that is involved in collective bargaining.

Main employers’ organisations

Apart from CCCI and OEB, the following table also includes two sectoral employer associations that are influential in terms of collective bargaining: the Federation of Associations of Building Contractors Cyprus (OSEOK), a member of OEB; and the Cyprus Hotels Association (PASYXE), a member of CCCI, as well as the Association of Cyprus Tourist Enterprises (STEK), a member of OEB.

Main employers’ organisations and confederations

Tripartite and bipartite bodies and concertation

In Cyprus, although the law does not institutionalise bodies of social dialogue, there is a long tradition of social dialogue. The implementation of almost all proposals and policies regarding industrial relations is the result of social dialogue between the government, the employer organisations and the trade unions. However, social partners are more often voicing complaints in the last few years over unilateral decisions and initiatives of the government.

On a practical level, cooperation between the three parties is achieved through the operation of technical committees and other bodies of tripartite representation, but mainly through the representation of the stakeholders in the Labour Advisory Board (LAB) within the MLWSI, considered to be the most important mechanism of tripartite representation. While in the past every governmental initiative has been subject to extensive consultations in the LAB, in recent years an increased number of legal measures is processed unilaterally by the government without any tripartite negotiation.

LAB, as the sole body for social dialogue, is occasionally subject to criticism. The main criticism is that social dialogue representation is restricted to a very small number of trade unions, at confederation level only, but without the participation of all confederations. In this context, all other trade unions are practically excluded from the official bodies of tripartite representation and the LAB in particular. Specifically, on behalf of the employers there are three representatives from CCCI and three from OEB, while on behalf of the trade unions there is one representative from DEOK, three representatives from PEO and three representatives from SEK. Depending, however, on the issue in question, representatives from other trade unions or employer associations might be invited on an ad hoc basis, but mainly participating as observers.

In terms of the issues covered, there is a relatively limited social dialogue agenda and a lack of initiative on behalf of the social partners to expand into new areas, such as economic and monetary issues. In this context, important outcomes such as the National Action Plan for Employment (NAP) 2004–2006, the National Lisbon (Reform) Programme 2005–2008 or most recently the National Reform Programmes were not the result of social dialogue. In relation particularly to measures put forward as a response to the new economic governance at EU level, such as the MoU, the DEOK, PEO and SEK believe that these are in effect decided by the government and as such were imposed on the social partners in a one-sided manner. They see this as a practice that constitutes an outright attack on the existing system of industrial relations which is based on the principle of tripartite collaboration.

After the accession of Cyprus into the European Union, the National Employment Committee was created. The committee has a tripartite composition and is chaired by the Minister of Labour, Welfare and Social Insurance. The committee has an advisory competence on issues related to the implementation of the European employment policy, the performance of the labour market, the modernisation of the Public Employment Service, the monitoring of the National Action Plan for Employment, as well as the reformation of the employment framework of third-country nationals. During the recent economic crisis, the committee has also been dealing with various measures to combat unemployment.

In 2017 and 2018 both the Labour Advisory Body and the National Employment Committee were only seldom convened by the government.

It should be noted that the social partners participate in almost all policy-making organisations, such as the Human Resources Development Authority (HRDA) and various other committees and councils of minor importance.

Main tripartite and bipartite bodies

Workplace-level employee representation

Cyprus has a weak tradition in terms of the existing structures for employee representation at the establishment level. In this context, the main representation structures to date refer to the trade union representation and safety committees, while recently established structures such as the European Work Councils (EWCs) do not seem particularly viable.

In the framework of its mediating role, the Ministry encourages the social partners to promote the establishment of information and consultation bodies (I&C). As a result, a number of collective agreements both at sectoral and enterprise level have now incorporated a special clause that refers to social partners’ intention to establish I&C bodies according to the provisions of the Law 78(I)/2005 on Establishing a General Framework for Informing and Consulting Employees . However, so far it has not resulted to any practical and meaningful measures. At the same time, although the social partners agree that the adoption of Law 78(I)/2005 is important insofar as it lays down employees’ right to information and consultation on a wide range of important issues, they are not motivated to introduce I&C arrangements, since in their opinion I&C rights are safeguarded by the industrial relations system itself.

It should be noted that safety committees exist in establishments with 10 or more employees, as provided for by the legislation on health and safety at work (Law 89(I)/1996) and the relevant regulations on safety committees (Regulatory Administrative Act 134/1997).

Regulation, composition and competences of the bodies