EMPLOYERS and Industrialists Federation (OEV) yesterday said it would unilaterally impose a two-year wage freeze and other cutbacks in the private sector, amid warnings from unions that the move would lead to strikes.
OEV urged its members to act unilaterally on the wage freeze after Thursday’s crunch meeting with workers unions PEO and SEK failed to deliver a deal for a package of austerity measures on new collective agreements.
As well as the wage freeze, the suggestions for wider discussion included a two-year halt to the Cost of Living Allowance (CoLA) and temporarily scrapping employers’ contributions to the provident fund, which currently rest at an average of around 5 per cent. Proposals to increase working hours per week, and readjusting overtime payments to a one-to-one ratio were rejected outright by the unions at the failed meeting.
In addition, employers in struggling industries were advised to engage in negotiations with the unions to agree to possible wage cuts.
While endorsing a unilateral wage freeze for its members, OEV was careful to point out that any unilateral withholding of provident fund contributions without the unions’ consent could lead to criminal prosecutions and retrospective payments.
It also conceded that wages could also not be cut without union agreement.
If the suggestions had been agreed with the unions at Thursday’s meeting they would not have been necessarily binding in any case, with each employer having the liberty to decide whether to adopt the agreed proposals or not. A two-year freeze on wages and CoLA was introduced in both the state and banking sectors last December.
But unions yesterday slammed OEV’s unilateral decision to proceed with the austerity measures, and warned that strong measures could be taken imminently if the existing collective agreements were not respected.
They nonetheless expressed their desire to engage in further deliberation so as to find solutions for the needs of each industry separately.
At the instigation of the unions, Labour Minister Sotiroulla Charalambous pledged to arrange a meeting between all relevant parties and called on OEV and the unions to refrain from any activities which might “flare up the strained relationship between the two”.
Relations between unions and OEV have been at low, with unions complaining that the association has been backing employers to unilaterally violate the collective agreements, while deliberations at a national level were still underway.
“This is the only way we can keep companies afloat or else many of them will close, leading to thousands of workers losing their jobs” said OEV’s assistant director, Michalis Antoniou.
Antoniou said that companies in the private sector had been absorbing most of the economic crisis’ costs and that with interest rates being high and the market shrinking, “companies are in deep trouble”.
According to the EU’s statistical service (Eurostat), around 31,432 people were unemployed in Cyprus as of December 2011, which is an unemployment rate of 9.1 per cent.
PEO general secretary, Pambos Kyritsis said that OEV’s decision destabilised the environment of negotiations and warned that the unions would not accept employers “using the crisis as a pretext to attack the occupational rights of workers”.
Yesterday’s decision came as a shock to the unions, who expected that there would be further deliberation after Thursday’s failed meeting.
OEV and the unions have been locked in discussions over new collective agreements for over a month, while builders, port workers and employees of soft-drink factories have already arranged 24-hour strikes in early February.
SEK chief, Nicos Moiseos claimed that OEV was asking for too much, since the collective agreements currently in place were agreed “in the midst of the crisis in 2010, and were designed accordingly”.
“We tabled these proposals so that we could improve competitiveness without having to sack people or trim wages,” said Antoniou, who clarified that the intransigence of the unions had forced OEV to take action.
With struggling industries not specifically stated, Antoniou conceded that theoretically all employers could attempt to lower wages, but clarified that this could not be done without the consent of the unions.
Unions are set to convene within the next few days in order to explore their future actions.
