After months of stagnation, the Ministry of Labour has finally given the green light for the launch of social dialogue on the contentious issue of the Cost of Living Allowance (ATA). Labour Minister Yiannis Panayiotou had initially proposed that discussions between the two social partners—employer and trade union organisations—begin on Holy Monday.

However, plans changed due to the unavailability of a senior official from one of the organisations, who is currently abroad. As a result, the date for the commencement of social dialogue has been moved to this coming Friday. Still, as employer and union representatives told Brief late yesterday evening, it remains uncertain whether the talks will actually start on that day.

Some organisations have pre-scheduled events or meetings on Friday, and it has yet to be determined whether an alternative date will be selected. In any case, the ATA issue is far too complex to be resolved in just one meeting. A timeline has been set for both sides to conclude the dialogue and reach definitive decisions by the end of June.

The Cyprus Employers and Industrialists Federation (OEB) argues that ATA is an outdated system that fuels inflation, widens the wage gap between high and low earners, disproportionately increases production costs, undermines business competitiveness, hampers exports, and ultimately erodes the broader economy.

The Cyprus Chamber of Commerce and Industry (CCCI) is calling for the current ATA calculation method to be replaced with a modern system for granting wage increases. This system, CCCI proposes, should be based on indicators such as productivity, work efficiency, and GDP growth at constant prices.

On the other hand, trade unions participating in the dialogue—SEK, PEO, PASYDY, and DEOK—maintain a unified stance on ATA. They demand the full restoration of ATA according to its original philosophy, meaning the allowance should be paid at 100% rather than the current 66.7%. The union movement considers ATA a vital tool for preserving workers' purchasing power. They are also advocating for the expansion of ATA coverage to all employees.