Hotel sector unions on Wednesday accused employers of breaching a collective agreement signed in December, prompting Peo to say they were left with no choice but strike measures.

“For months now, we have denounced the attitude of the hoteliers and employers’ associations, who breached the agreement, and requested the intervention of the labour minister,” Peo said.

“Despite our repeated efforts, the situation is going from bad to worse.”

Peo’s board of directors of Peo met on Tuesday to discuss the situation created by the failure of many hoteliers to implement the agreement, which was signed in the presence of the minister.

The dispute concerns provisions for the 13th salary, planned increases to employer contributions to the provident fund, from 5 per cent to 5.25 per cent in 2026 and 5.5 per cent in 2027, and double pay during Easter, Christmas and New Year holidays.

These points were tabled to parliament as regulations – which carry the force of law. The difference arose when employers argued that they had not agreed that these points would be written into regulations.

Last week, during its last session before the summer recess, the House plenary passed the regulations in question.

Employers say that collective agreements pertain only to those workers who are members of unions. However, they argue, the regulations passed by the House cover all employees – whether union members or not. And they say they never agreed to that.

“The smooth functioning of labour relations is for the benefit of all, and the encouragement to our members to implement the agreements is a given, since as institutional bodies we recognise the value of the agreement for the renewal of the agreement, which is a positive development for the industry,” employer organisations said on Wednesday.

Pasyxe and Stek underlined the importance of the smooth functioning of labour relations for the benefit of all, stating that the positive prospects of the Cypriot economy and the positive course of the labour market make it necessary to preserve labour order and stability, and for the achievement of these goals, the positive contribution of all parties is necessary.

However, a senior labour ministry official has stated that in December the hoteliers had in fact signed a document agreeing to the legal codification of the agreed points.

Trade unions, however, insist the deal is sector-wide and accuse several hotels of failing to comply, including those that signed the agreement.

Peo also said that labour relations in the hotel industry have been deregulated by the new criteria for hiring workers from third countries, who “in many cases are being exploited and working under inhumane conditions”.

The union said it will proceed with strike action in the hotel industry, with details to be announced in the coming days.

Workers are being urged to remain united ahead of possible disruption during the peak summer tourist season.

Labour Minister Yiannis Panayiotou is holding talks with both sides under the industrial relations code in an attempt to resolve the standoff.

Employer organisations said their active participation as social partners in the multi-month collective negotiations for the renewal of the collective agreement, which led to the achievement of a long-term agreement extending until the end of 2027, describing it as indicative of the constructive contribution of the employer associations.