In April 2004, a new collective agreement was signed in the Cyprus construction industry. Key provisions include a pay increase of around 4.6% over two years, changes to guaranteed weekly pay and a commitment by the parties to improve implementation of the agreement. The conclusion of the construction deal is likely to pave the way for agreements in other sectors.
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In April 2004, a new collective agreement was signed in the Cyprus construction industry. Key provisions include a pay increase of around 4.6% over two years, changes to guaranteed weekly pay and a commitment by the parties to improve implementation of the agreement. The conclusion of the construction deal is likely to pave the way for agreements in other sectors.
On 5 April 2004, trade unions and employers reached a new collective agreement for the construction industry. The two-year agreement, which came into effect retroactively from 1 January 2004 and expires on 31 December 2005, covers around 20,000 workers in the sector, around 14,000 of whom are trade union members. The final agreement was signed: on the employers’ side by the Federation of the Building Contractors Associations of Cyprus (OSEOK), a member of the Employers and Industrialists Federation (OEB) (CY0310101F); and on the workers’ side by the Cyprus Building, Wood, Mine and General Workers Trade Union, a member of the Pancyprian Federation of Labour (PEO), and the Federation of Builders, Miners and Relevant Professions, a member of the Cyprus Workers' Confederation (SEK). The final agreement was reached with much difficulty, following a month and a half of bargaining.
The new agreement provides for a total pay increase of around 4.6% for the two years, to be divided into two equal instalments - 2.3% from 1 January 2004 to 31 December 2004 and 2.3% from 1 January 2005 to 31 December 2005. This increase refers to basic pay and the cost of living index as calculated up to 31 December 2003. The increase that will come into effect on 1 January 2005 may be somewhat greater than 2.3%, depending on the cost of living allowance, which is calculated on basic pay.
The agreement introduces an important change concerning guaranteed weekly pay. It provides that if a building site ceases operation due to rain or bad weather the employer must pay, from the date that work is interrupted, wages for the first three consecutive days of the week. If the building site remains closed during the whole week for the same reasons, the employer must pay staff 50% of their wages. This regulation replaces the previous paragraph (a) of Article 16 of the agreement, which stipulated that (from July 1992) employers had to pay staff their full weekly wages irrespective of whether the building site was closed due to rain or bad weather. There was, however, a provision that the workers should be at the employer’s disposal during the whole working week and that they would not be paid if they were absent due to sickness or for any other reason for which they were liable. This condition will not apply under the new agreement.
Two new articles have been added to the agreement. Article 7 states that if there are reasons directly affecting the operation of the construction industry, with adverse economic effects which are out of its control (eg shortages of the necessary raw materials), the two sides will meet immediately in order to find mutually acceptable measures aimed at mitigating the adverse effects. According to Article 8, which is considered by some to be the most important article in the agreement, the two sides agree that they will hold discussions in a positive spirit, aimed at finding ways for all contractors to implement the sectoral collective agreement. To this end, the two sides have agreed to prepare a joint memorandum which will be submitted to the competent bodies and will include suggestions for resolving problems in this area. The two sides have agreed this new arrangement because many contractors fail to implement the sectoral agreement and a number of contractors that are members of OSEOK have violated it.
The collective agreement for the construction industry was the first sectoral agreement to be concluded in Cyprus, in 1938, and OSEOK was the country's first employers’ association. Since then, the sector has been characterised by a tradition of strong bipartite relations between employers and workers, and the industry’s collective agreement has historically constituted a 'test run' for the renewal of collective agreements in the other sectors. Construction is the second largest industry in Cyprus, after tourism/catering.
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Eurofound (2004), Two-year agreement signed for construction industry, article.
