Rising trend in undeclared work poses major challenge, Labour Minister says

Increased levels of undeclared and illegal work have become a significant challenge, according to Labour and Social Insurance Minister Yiannis Panayiotou.

Speaking at the 29th Annual General Assembly of the Cyprus Federation of Building Contractors Associations (OSEOK), Panayiotou highlighted the rising trend as a pressing issue with widespread economic effects, particularly in the construction industry where undeclared work now approaches 25%.

"Unfortunately, we are seeing an upward trend lately," he stated. In the construction industry, he added, undeclared and illegal work is approaching 25%, saying that it was a problem for everyone, particularly for fair competition.

"It is problematic for law-abiding employers, contractors, and subcontractors who comply with legal provisions," he said. Panayiotou expressed gratitude to the leadership of OSEOK, and the employers’ associations OEB, and the CCCI for their collaboration in effectively addressing the issue. He asserted that through cooperation, increased inspections, stricter penalties, and a more suitable institutional framework, this illegal and unacceptable practice could be effectively tackled.

Regarding the labour market staffing, the Minister said that they had managed to agree on how to make use of both domestic and foreign labour to continue the growth of the Cypriot economy, given that the current economic growth exceeds the country's demographic capacity.

"Even if all Cypriots were employed, we would not be enough to fill all the jobs required by the large Cypriot economy," he noted. However, he added that proper regulations are necessary for this to be done correctly, emphasising that the better-regulated the labour market, the easier it will be for Cyprus to welcome more foreign workers.

He then referred to Eurostat data for the first quarter of 2024 and the Labour Department's data on registered unemployed, noting that unemployment is on a downward trend. At the same time, he said, the Ministry has accelerated its response to requests for work permits for foreign workers.

"We seem to be effectively and in a balanced way managing to adequately staff the market and make the most of the domestic labour force," he noted.

Minister Panayiotou also highlighted the importance of renewing the collective agreement in the construction industry. He said that he would meet with social partners next week to discuss the matter in depth and reach a conclusion on renewing the collective agreement.

President of contractors calls for cross-border agreements for labour needs

In his speech at the event, President of OSEOK Stelios Gabriel, urged for bilateral agreements between the Republic of Cyprus and countries with skilled labour forces. He highlighted the pressing need for such agreements amid the shortage of labour in the construction sector.

"It is imperative to conclude intergovernmental agreements with countries that possess capable and skilled personnel available to work in the Republic of Cyprus, ensuring unrestricted entry, accompanied by such safeguards that prevent exploitation by various networks," he said.

On his part, Antonis Antoniou, President of the Cyprus Employers & Industrialists Federation (OEB), noted that despite the decline in unemployment in Cyprus, they remain concerned about the scarcity of both skilled and unskilled labour, a challenge bothering Cypriot entrepreneurship.

"This challenge naturally affects the construction sector, where the demand for labour is significant," he said, while acknowledging the measures taken by the government in recent months. However, he pointed out the need for even more decisive solutions to address this issue.

Antoniou also highlighted that in 2023, the construction sector's contribution to GDP increased to approximately 15%, with optimistic forecasts for 2024. He added that the construction sector's positive impact extends to a number of related industries, with combined employment opportunities exceeding 35,000 workers.

(Source: CNA)