MPs on the House Labour Committee agreed unanimously on Tuesday to remove a backdating clause from a government bill, blocking the write-off of 64.3 million euros in surcharges owed by employers and self-employed people who failed to pay fines for undeclared work.
The bill caps the increase on late fines at twice the original fine. The government wanted the cap to apply retroactively from 2 June 2017, almost nine years ago, which would have wiped out the extra charges already built up. On a proposal by AKEL, the parties agreed that the cap will instead apply only once the bill is passed.
The government disagrees with the committee’s decision and is standing by its bill. It considers the current law punitive, unfair to employers and excessive. Labour Minister Marinos Moushouttas will attend the committee’s next session to try to persuade the parties that the measure is needed.
Under current law, anyone who breaches the legislation on undeclared work and does not pay the fine on time is charged 50 euros for every day of delay, with no upper limit. Debts have built up to 73 million euros. Under the government’s proposal, 64.3 million euros in surcharges would be written off and 8.6 million euros would go to the state.
Committee chairman and AKEL parliament member Giorgos Koukoumas said the cap should apply from now on. He said there was never money to spare when it came to other citizens, but when it came to employers, the government handed it over.
Background
Phileleftheros reported on Tuesday that figures the Labour Ministry sent to parliament on Monday showed the debts at 73 million euros, well above the 58 million euros first estimated. The Finance Ministry and the Treasury have backed the bill in memos to parliament, and the Accountant General has warned that 51 million euros in debts built up to early 2025 is in practice uncollectable.
List of debtors
MPs reacted angrily to the Labour Ministry’s refusal to give parliament a list naming the companies that still owe fines to the state.
Koukoumas said that when parliament asks for a list of names in the public interest, the government should provide it. He said the ministry could classify the documents as secret.
DISY parliament member Demetris Demetriou said it was insulting to parliament that the ministry had withheld the list, citing the law on personal data. He also asked for the debts to be broken down by size, and warned that the bill would not go to the plenary unless the government submitted the list.
The ministry is expected to ask the Office of the Commissioner for Personal Data Protection for advice on how to proceed. The ministry knows who the debtors are, the committee heard.
The Employers and Industrialists Federation (OEB) and the Cyprus Chamber of Commerce and Industry (CCCI) oppose handing over the list. The Cyprus Workers’ Confederation (SEK) and the Pancyprian Federation of Labour (PEO) back parliament’s position, saying it is unthinkable for parliament to be asked to write off 70 million euros without knowing who owes it.
What the ministry told MPs
Labour Ministry representative Giorgos Rokopou told the committee that the bill would not forgive the administrative fines themselves, only the surcharges. A total of 706 employers and self-employed people owe 73 million euros in fines and surcharges combined, most of them in construction. He repeated the ministry’s view that the fines are disproportionate and burdensome.
If the bill passes, 12 debtors who paid more than twice what they owed will be refunded a total of about 20,000 euros, he said. Answering questions, he said 41 debtors have appealed to the Administrative Court.
The Law Office of the Republic said the bill’s retroactive provision posed no legal problem. It said undeclared work cannot be tackled with fines, and undertook to examine parliament’s request for the list of debtors.
