Cyprus hotels have accepted a mediation deal brokered by Labour Minister Zeta Emilianidou that calls for the renewal of collective agreements to the end of 2022, thus averting a disastrous strike.
The island’s two hotelier groups, the Cyprus Hotels Association (PASYXE) and the Association of Cyprus Tourist Enterprises (STEK), have rubber-stamped the proposed pay hikes.
A standoff almost came about as a result of the collapse of British tour operator Thomas Cook and its subsequent debt to Cypriot hoteliers, many of whom remained unpaid since July, seriously hurting revenues.
The two associations issued a statement after their joint meeting saying they accepted the demands put forward by trade unions for a 5.5% pay increase spread out over four years.
The first increment will be a retrospective 0.5% payment on basic wages for 2019. This will be followed by 1.5% on January 1, 2020, 1.5% on January 1, 2021 and a 2% hike on January 1, 2022.
Furthermore, the deal includes a 1% additional contribution for all staff to the welfare funds operated by the unions, while overtime will be considered double on public holidays and a 25% bonus for Sundays.
Emilianidou hailed the agreement, saying: “I welcome the decision of the members of PASYXE and STEK to accept my proposal for the hotel sector. The three-way cooperation will bring labour peace. I also welcome the efforts and responsible stance of the leaderships of both PASYXE and STEK.”
Employers’ federation OEB said “challenges in the hotels industry, the main driver of the economy, remain huge and demand the engagement of all forces.”
Up until a week ago, hoteliers said that they were no longer in a position to accept the mediation proposal to resolve a dispute over pay in the hotel industry following the demise of Thomas Cook.
Before the deal, initially approved by unions and hoteliers, the industry was headed for strike action which was averted with a last-ditch agreement in August.
However, Thomas Cook’s downfall left many hotels unable to live up to their end of the bargain, said Cyprus Hotels Association chairman Haris Loizides.
Members in the Famagusta area appeared to be the worst affected by last month’s collapse of the British travel giant with many hotels reportedly in a bad financial state and unable to satisfy the 5.5% salary increases and other benefits provided under the mediation proposal.
Loizides explained that while the government approached hoteliers’ demands with a positive view, such as tax breaks, a sticking point for hoteliers is the minimum wage for unskilled labour, which is part of the labour package.
Emilianidou had said that making alterations to the proposal was not possible as it was a result of long negotiations.
She said concessions could be made regarding the employment status of students temporarily employed during summer months and the sharing of the 1% contribution to the welfare fund.
The salaries of seasonal workers in the hotel industry will not be covered by the minimum wage law.
Hotels are also in negotiations with local authorities to facilitate an extension of tax payments on overnight stays, fees for garbage collection and sewerage, as well as taxes on property.
Following Thomas Cook's bankruptcy unions said they were willing to take into consideration difficulties faced by hotels.