Negotiators agree on keeping provident fund
CYPRUS Airways (CY) management and unions yesterday inched closer towards breaking the deadlock over a controversial restructuring plan for the debt-ridden airline.
Following a meeting between the ministerial committee set up to coordinate negotiations and trade unions PEO and SEK, it was announced that the government – which owns a majority stake in CY – agreed not to touch the provident fund of those employees who would retain their jobs under an eventual deal.
And staff made redundant would receive smaller cuts on their take from the fund than previously proposed.
Unions, for whom the provident fund is sacrosanct, had refused to make any concessions on this point. Yesterday the parties involved in the negotiations made it clear that the deal for the fund was “locked” and was not subject to any other future arrangements.
Earlier in the week, the airline warned that if 500 people, around one third of its workforce, did not volunteer for redundancy it would have to revert to its original plan to sack 385 and cut the salaries and benefits of the remainder to meet cost cutting targets needed to save CY.
However, so far just 200 employees have applied for voluntary redundancy, a number far short of the 500 the airline needs to restructure.
Costas Demetriou, head of CY’s largest union CYNIKA, responded to yesterday’s development with tempered optimism.
“We hope the agreement on the provident fund will encourage more employees to consider a voluntary exit,” he told the Cyprus Mail.
Demetriou dismissed the notion that the deal struck yesterday necessarily meant employees would be sapped of other benefits or their severance pay package as the airline seeks to juggle around the numbers.
“I don’t think that will happen. This chapter [on the provident fund] is closed. That said, admittedly we still have a long way to go in the negotiations, and many issues are pending.”
The gruelling give-and-take game between the unions and management has been going on in earnest over the past week. And even though some commentators have likened the negotiations to a war of attrition, all the involved parties seem to share a sense of urgency, realizing that failure is not an option. The airline has warned that, without restructuring, it will go bust by the end of the year.
Speaking after yesterday’s session, Commerce Minister George Lillikas said a broader meeting was being planned for Monday with the participation of all concerned unions.
Pundits interpreted the comments as suggesting Monday was crunch time for the airline, which has been making some £20 million losses a year and desperately needs a loan from the EU if it is to survive.
For his part, Communications Minister Harris Thrasou appeared upbeat about yesterday’s development.
“We are optimistic for two reasons. First, because if we do not reach an agreement, it would be disastrous for the airline, and I don’t believe the employees would want that. Second, the employees’ demands over the provident fund have been met.”
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