Regulating the cost-of-living allowance (CoLA) for the private sector has been deemed unconstitutional, according to legal advice received by the Employers’ and Industrialists’ Federation (Oev) and the Cyprus Chamber of Commerce and Industry (Keve).
The legal counsel, prepared by renowned constitutionalist Achilleas Emilianides, has already been forwarded to President Nikos Christodoulides. Both Oev and Keve expressed their disappointment and deep concern regarding what they describe as the unilateral handling of this issue by the government.
Cola: Concerns Over Legislative Imposition
In their communication, Oev and Keve urged the government to uphold the system of tripartite cooperation and the industrial relations code, a framework established by social partners in 1977. They warned that if the president opts for a legal route, it would shift labour relations from negotiation and cooperation to courts and litigation.
Constitutional Rights at Stake
Emilianides argued that any legislative regulation of CoLA for private sector employees undermines the freedom to negotiate personal contracts or collective agreements, a right safeguarded by the constitution. He concluded that the legislative imposition of CoLA on employees with private law contracts conflicts with article 26 of the constitution.
Public Outcry and Strikes
Last week, a three-hour general strike brought the island to a standstill as workers demanded the restoration of CoLA in its original form. This allowance, they contend, is vital for maintaining purchasing power, supporting living standards, and enforcing collective agreements. Public services and transport bore the brunt of the strike, with over 50 flights cancelled and around 15,000 airline passengers affected.
Trade union Peo’s secretary-general, Sotiroula Charalambous, indicated that the strike was merely the first step in a series of planned actions aimed at achieving a collective and universal goal regarding CoLA.
Views from Business Leaders
Earlier this year, former Oev chairman Antonis Antoniou expressed his discontent with CoLA, suggesting it “should have disappeared” and advocating for alternative tools to support employee progress. His sentiments were mirrored by Keve chairman Philokypros Rousounides, who described CoLA as an “anachronistic institution” that requires either significant improvement or replacement with a more modern mechanism.
