The issue of worker leasing came under scrutiny in Parliament last week as the phenomenon appears to be expanding, drawing positions and views from employers, trade unions, and the competent Department of Labour. For some, the term worker leasing serves as a mild descriptor for modern-day slavery, while for others, a clear distinction must be drawn between legitimate service procurement and illegal employment.
The difficulty in interpretation is reflected in the fact that out of 52 cases examined by the Department of Labour between 2024 and 2026, potential labor law violations were identified in only three instances.
Under the microscope for years
The competent Department of Labour has examined the phenomenon of worker leasing for years, with checks intensifying from 2023 onward following a rise in relevant complaints. However, substantiating labor law violations remains difficult, requiring hours of investigation and on-site inspections to determine whether a case involves a genuine legal service purchase or a statutory breach.
Conversely, existing legal provisions grant authorities tools to clarify certain cases. In the construction and hotel industries, legislation explicitly prohibits the practice of worker leasing, as noted days earlier by Labour Committee Chairman George Koukoumas. Furthermore, only three approved temporary employment agencies currently operate in Cyprus, meaning any similar activity originating from another company or individual should be considered highly suspicious.
Key inspection indicators and distinction
During on-site inspections, Department of Labour officials focus on specific indicators to determine whether a worker is legally or illegally employed, starting with identifying the true employer responsible for wage payments. Inspectors also examine who provides daily instructions, the duration of work, work schedules, and who supplies working tools and equipment.
For instance, if a hotel worker states they are paid by a different company but wears a hotel uniform, receives instructions from hotel supervisors, and uses facility equipment, authorities evaluate these elements to determine if improper personnel placement has occurred.
The Department of Labour clarified that assigning a worker to an indirect employer can last up to four months at a time, with a total duration not exceeding 12 months. Once the prescribed period elapses, filling the same position through another temporary employment agency is prohibited. Since recent inspections of the three approved agencies revealed no violations based on submitted data, the core problem centers on unauthorized entities operating as placement agencies without the required licensing.
Stakeholder positions and union warnings
The Cyprus Employers and Industrialists Federation (OEB) emphasized the distinction between illegal worker placement and legal service procurement or subcontracting, noting that subcontractor workers remain under the subcontractor’s direct responsibility.
The Cyprus Workers’ Confederation (SEK) focused on companies operating as temporary employment agencies without the necessary licenses, identifying this as a primary issue. Meanwhile, the Pancyprian Labour Federation (PEO) described the situation as an employment medievalism, arguing that main contractors should maintain registries for all workers on-site, bear responsibility for violations, and face effective penalties alongside increased staffing for ministry inspections.
Labour Committee Chairman George Koukoumas explained that the parliamentary discussion followed complaints from all trade union organizations regarding the extensive use of worker leasing, even in sectors where it is strictly prohibited like construction and tourism. According to complaints cited by unions, the practice is frequently linked to human trafficking, with unauthorized operators transporting workers in vans to construction sites and workplaces under degrading conditions and wages. Koukoumas added that state officials acknowledged the existence of such phenomena, and Parliament now awaits data from the Ministry of Labour regarding finalized cases, penalties, and criminal proceedings.
