The government presented a reform proposal for the Automatic Cost-of-Living Adjustment (CoLA) mechanism on Monday, marking a significant shift in previously ineffective social dialogue between labour and employer representatives.
Labour Minister Yiannis Panayiotou outlined the government’s proposal to social partners following afternoon meetings with employer and trade union representatives.
The government proposal encompasses extension of automatic cost-of-living adjustments to all workers, graduated allocation favouring lower-income earners, economic safeguards protecting competitiveness, and anti-inflationary criteria.
Extension to all employees with graduated benefits for low earners
The reformed CoLA mechanism includes four specific components: extension of Automatic Cost-of-Living Adjustment payments to all employees; fair distribution of automatic adjustment percentages, emphasising low-wage workers through graduated allocation; introduction of insurance safeguards ensuring CoLA provision does not compromise economic competitiveness relative to growth rates; and establishment of criteria preventing inflation feedback through CoLA implementation.
The proposal implies legislative regulation of the institution based on the outlined pillars, though Panayiotou provided no detailed analysis to journalists.
Labour minister calls for strike cancellation to continue dialogue
Panayiotou called on trade unions to cancel Thursday’s three-hour work stoppage affecting public and private sectors to allow dialogue continuation.
The government’s position represents a reversal from previous unsuccessful social dialogue attempts regarding new CoLA agreement signatures.
The minister’s announcement follows extended discussions with both employer and trade union representatives, signalling potential breakthrough in long-standing labour negotiations.
Implementation would require parliamentary approval of legislation incorporating the four reform pillars into existing labour law frameworks.