Cyprus: National Minimum wage – legalising ruthless exploitation

Statement by New Internationalist Left. The statement was initially published in Greek on September 8 (can be read here)

The Republic of Cyprus was one of the few countries in the European Union  that did not have a minimum wage for all types of employment not covered by collective agreements. As a result, 55% of workers’ conditions and salaries are set by personal contracts without any statutory protection of rights.

Up to now only guards, caregivers, cleaners, clerks, salespeople, nursing assistants, babysitters or school assistants were granted a minimum wage, which was determined by decree of the Minister of Labor in 2012. It has never been adapted ever since, that is for 10 years.

On August 31st, the National Minimum Wage was set at 885€ gross, rising to 940€ gross after 6 months of an uninterrupted contract with the same employer.

Labor relations bulldozed since 2013

The Cypriot government bailed out the banks in crisis in 2013. This was followed by 10 years of neoliberal policies applied by the DISY (right wing) government, which have bulldozed labor conditions in the country.

The crisis became a reason and an excuse for many companies to reduce their staff or wages, eliminate overtime pay and replace full-time workers with part-timers (who actually worked not only full-time but also extended hours).

The government in turn voted for legislation which formalised and institutionalised these changes. Special training programs – during which the state was subsidising the salary of workers to the company in need – established salaries of 500 €. The ministry of Labor abolished the Sunday holiday by decree and “liberalised” the shop-opening days and hours, thus abolishing overtime and double payment on holidays.

The law that was voted regarding part-time jobs turned these jobs to a norm – workers are paid by the hour even if they work full time, without paid leave, even if it is for sickness or maternity.

“Minimum wage does not mean a decent wage, who told you that?”

This is what the Minister of Labor shamelessly stated on a morning show on September 2, when discussing the reactions of the trade unions to the National Minimum Wage.

The minimum wage in 2012 was set at 870€ gross and 924€ gross after 6 months of an uninterrupted contract with the same employer. Now, 10 whole years later, the National Minimum Wage is being increased by the huge amount of… 15€ on the first salary (885€) and 16€ after 6 months of an uninterrupted contract (940€)! What is more, the contributions of the employees to the National Healthcare System (GESY) today (which did not exist in 2012) have increased, practically further decreasing real workers’ income.

Cumulative inflation over the past 10 years is estimated at around 22%, while inflation rate just over the last six months was about 11%. Taking into account only the official data, this translates into a reduction of the minimum wage (of 870€ in 2012) by 191 € and 96 € respectively!

The National Minimum Wage increase can therefore not even be qualified as crumbs, as it does not compensate for the loss of income during the last decade and especially during the last period.

Modern slaves are exempt from the minimum wage

As if all the above were not enough, the National Minimum Wage is not granted to those working in agriculture and livestock nor to domestic workers. Immigrants and asylum seekers are employed in these sectors, and notably immigrants’ wages depend on their country of origin. So Philippino workers who get the “best” contracts can have 413€/month, while Nepalis only get 309€/month!

The excuse for this exemption is that the employer pays for their food and accommodation!  The decree on the National Minimum Wage actually includes this provision: an employer is entitled to deduct 15% for food and 10% for the employee’s accommodation – a total of 25%. However, employers of agriculture and domestic workers deduct more than 50% of the National Minimum Wage.

The minister stated that the housing provided will undergo controls to check if it is decent – but this is a joke! If the minimum wage is not sufficient for a decent life, how could the supposed 10% deduction possibly provide decent housing to the modern slaves?

Young workers and trainees below the poverty line

The National Minimum Wage does not apply to workers under the age of 18 nor to interns. The new National Minimum Wage decree provides a salary 25% lower for them! This is the first time something like this has been registered. Such provisions were forbidden by law in the past as they were considered to be discrimination at work!

We have seen something similar before, namely training programs in 2014, according to which thousands of young people were supposedly “trained”, but in reality properly working  on wages of 500€. With the new decree, people’s cheap labor is formalised and paid 663.75€/month; this salary is lower than the poverty line!

“We have to be competitive”

These were also the words of the Minister of Labor. Using the same excuse, governments of the European South have led workers to hyper-exploitation and impoverishment. This is also the purpose of the Cypriot neoliberal government.

Workers being competitive actually translates being turned into modern slaves who produce mythical profits for employers.

It took about one year of negotiations between trade unions and employers for the government to implement what they have been anyway doing for so many years – that is serving the interests of employers.

Fighting for a decent National Minimum Wage

The debate about the minimum wage that unfolded over the last year does not come as a result of demands on behalf of the trade unions. It is because of an EU directive, imposing that a National Minimum Wage has to be set, in case less than 80% of the workers are not covered by collective agreements. The unions participated in the negotiations as social partners, to keep up appearances and not to actually defend the workers’ interests. Workers who from now on will be receiving the minimum wage, have practically not been represented in the debate. There are in essence no trade unions representing the lower layers of the working class. And even in the small number of cases that a trade union exists, it will compromise and avoid conflicts with employers over labor rights.

Thus this “negotiation” ingloriously ended up in a compromise in favor of the employers and against the rights of the workers. Neither the cost of living, nor inflation, and above all the required cost of daily needs to be covered (rent, electricity, transport, telecommunications, health, raising children and nutritional needs, etc.), were taken into account.

The only positive thing about the National Minimum Wage, is that low-wage workers have now got a status, based on which they can claim their rights. The National Minimum Wage will be reassessed in one year, and renewed every two years, which gives the workers a target for struggle.

For this we need to organise and fight to demand from the trade unions to express the views and needs of the workers and not to give in to the pressures of the employers and the state.

In the past ten years plenty of workers’ rights have been abolished. Wages are not adequate to the cost of living, not all workers are on a contract, personal contracts prevent workers from unionising, welfare benefits, paid holidays, paid overtime, paid sick leave, maternity leave, ect, have been cancelled. All these rights need to be placed on the workers’ focus for new struggles.

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