Collective Agreements: Boosting Competitiveness

The decline in employee coverage by collective agreements has worsened living standards at national and European levels. In 1990, coverage in Europe exceeded 80%, while today it is around 66%, according to OECD and European Commission data.

Cyprus can draw examples from countries that have increased coverage, within the framework of the action plan to extend collective agreements, as derived from Directive 2041/2022. Timetables and control mechanisms between social partners and incentive policies should be defined.

The view that the extension of collective agreements will harm competitiveness due to increased labor costs is rejected. Competitiveness is enhanced through employee training, skills upgrading, digitization, and reducing bureaucracy and energy costs, as mentioned in the Leta and Draghi reports.

The EU, through Directive 2041/2022, provides a powerful tool for strengthening collective agreements. It is up to national governments and social partners to seize this opportunity. SEK has placed the extension of collective agreements high on its agenda.

The trade union movement is ready to participate in social dialogue to protect workers through collective agreements.