Cyprus’s cabinet approved sweeping changes to foreign worker employment rules on Wednesday, drawing praise from employers but fierce criticism from labour unions who threatened possible industrial action.
The new framework allows employers to deduct up to 25% of foreign workers’ gross wages for accommodation, up from 10% previously, provided housing meets specified standards.
It also permits workers to move between an employer’s facilities within the same province.
Labour Minister Yiannis Panayiotou said the reforms were necessary given Cyprus’s strong economic growth, with unemployment at 5% and employment rates approaching 80%. Average wages have increased by 8.5% over the past two years, he added.
“These changes are welcome but long overdue, with some previous regulations dating back to the 1990s”, Michalis Antoniou, director general of the Employers and Industrialists Federation (OEB) told philenews.
However, union leader Stelios Christodoulou sharply criticised the timing of the decision, which comes just a week before a scheduled meeting with President Nikos Christodoulides.
“The government has clearly sided with employers at workers’ expense”, Christodoulou told philenews, adding that unions were not shown the final proposal before its approval.
The reforms also establish a tripartite advisory committee including ministry officials, unions, and employer associations to monitor implementation, and introduce mandatory vocational training requirements for foreign workers in specific sectors.
Cyprus’s largest unions, PEO and SEK, are expected to issue a joint statement on Thursday and have not ruled out industrial action.
