Labour Minister Yiannis Panayiotou on Friday said the government was operating under a “people’s mandate” to implement a human-centred employment policy.

The minister was responding to Sek union leader Andreas Matsa who had accused him of altering the underlying philosophy of the cost-of-living allowance (CoLA).

Speaking to CyBC, Panayiotou assured the public that the renewal of the 2023 CoLA provisions was imminent, and that a specific timeframe for its implementation had already been set.

Addressing the issue of third-country workers, the minister noted that unemployment in Cyprus was currently under five per cent – a level considered to represent full employment.

As a result, he said, the country lacks sufficient local labour to meet its needs, making the import of foreign workers necessary.

The minister added that work authorisation procedures are being expedited and at present one month is needed to secure a permit.

During a May Day event organised by the SEK union in Nicosia on Thursday, Panayiotou reaffirmed the government’s commitment to social justice, highlighting a series of reforms aimed at strengthening the labour market and improving working conditions.

Panayiotou said the government was pressing ahead with the reform of the pension system, the modernisation of CoLA, improved regulation of the labour and expansion of collective agreements.

“We are moving forward with confidence and optimism,” the minister said, acknowledging existing challenges but stressing that the progress achieved so far reflects the government’s determination and sense of responsibility.

For his part, Matsas focused on defending CoLA, warning that talk of “modernising” the mechanism raises concerns about its potential dilution or abolition. He stressed that CoLA is a contractual right that restores purchasing power and should not be linked to productivity metrics or subject to change.