InsiderEconomySocial partners to launch talks on COLA permanent reform

Social partners to launch talks on COLA permanent reform

Social partners in Cyprus are to start negotiations aiming towards an agreement for a permanent reform of Cost of Living Allowance within the next couple of months, Phileleftheros reports.

The current agreement between unions and employers applies for a transitional period covering 2018, 2019 and 2020. And it provides for the disbursement of COLA at a reduced rate of 50%.

The cost of living allowance (COLA) is a wage indexing system that has also become an essential element of the wage determination process in the private sector.

Trade unions have traditionally given great importance to COLA, as they believe it neutralises the impact of price increases on the purchasing power of wages.

The agreement provided that the transitional period was to be used to negotiate an agreement for a permanent reform of COLA. And that the social partners were to be committed to engage in social dialogue towards this end.

Insiders told Phileleftheros that a solution should be reached during the conference of the Labour Advisory Board, in accordance with the transitional agreement.

And  that despite the difference of opinions between trade unions and employers, the issue should be closed before the end of the year.

Trade unions SEK, PEO and DEOK are demanding the full reinstatement of COLA, and have already called  on President Nicos Anastasiades and Minister of Labour Zeta Emilianidou to intervene. They believe that employers’ organisations want to abolish the institution.

Unions representatives believe that wages should retain their purchasing power and not be undermined by inflation. On the other hand, employers’ organisations KEVE and OEB are in favour of the abolition of COLA because they believe it is a mechanism affecting the competitiveness of services on offer.

At the same time, they claim that if COLA is reinstated to 100% then company costs which have already  increased the past year due to the fledgling General Health System’s contribution will go further up.

Employers believe the reinstatement of COLA is also untimely now due to external developments such as the economic impact of coronavirus.

By Eleftheria Paizanou 

 

Read more:

https://in-cyprus.com/panicos-nicolaou-is-the-new-ceo-of-the-bank-of-cyprus/

 

 

 

 

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