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ICPAC and Ministry of Labor drive for fair and transparent employment practices

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ICPAC and Ministry of Labor drive for fair and transparent employment practices

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    The Corporate Social Responsibility Committee of the Institute of Certified Public Accountants of Cyprus (ICPAC) in collaboration with the Ministry of Labor and Social Insurance organized a successful conference which covered a wide range of current labor issues, such as equal pay and treatment of Men and Women in employment, the new Directive on pay transparency, the establishment of Labor Inspectorate as well as other labor topics and new applicable Legislation.

    Mr. Dimitrios Chioureas, President of ICPAC's Corporate Social Responsibility Committee and Partner at Grant Thornton Cyprus, pointed out in his welcome speech that we do not just meet as participants in a conference, but as champions for a change, united in our commitment for the removal of barriers that prevent the realization of equal opportunities to all. Moreover, he pointed out that gender equality is not only a moral imperative, but it is essential for a prosperous and strong society. It is a cornerstone for innovation, economic growth and social harmony.

    In a world struggling for progress and equality, it is disappointing that the gender pay gap remains a stark reminder of the work that still needs to be done. Our goal is to create tangible solutions that will pave the way to a future where no person faces discrimination based on gender. It is our collective responsibility to confront challenges head-on, promote dialogue and actions that will lead to a fairer future.

    The General Director of the Ministry of Labor and Social Insurance, Mr. Andreas Zachariadis, stated in his greeting that compliance with the labor legislation is a necessary condition for a prosperous labor market.

    A modern working environment shall guarantee to every worker, conditions of equal participation in the labor market, equal opportunities for development, equality in pay, a healthy balance between work and personal life, as well as protection against harassment of any kind.

    He also reminded the commitment of the Government and specifically of the Ministry of Labor and Social Insurance for the continuation of cooperation with all parties involved, including the Institute of Certified Public Accountants of Cyprus (ICPAC), on the basis that professional accountants are often at the first line of dealing with a wide range of labor issues.

    Specifically, the following topics were briefly presented:

    • < u>Establishment and operation of Labor Inspectorate

    Mr. Andis Apostolou, Acting Director of the Department of Labor Relations and Supervisor of Labor Inspectorate, as well as Trade Union Registrar, stated that Labor Inspectorate has been operating since 2017 and is the appropriate authority in Cyprus for monitoring compliance of 30 Labor Laws and safeguards the employee rights through effective inspections.

    Labor Inspectorate has ongoing communication, co-operation and collaboration with other departments of the Ministry as well as other Ministries and Authorities in order to coordinate efforts, share information and promote a fair, equal, qualitative and safe working environment in workplaces.

    An important mission of the Labor Inspectorate is to compact undeclared work and illegal employment, which is among the priorities of the Cyprus government. Mr. Apostolou clarified that “undeclared work” means earnings relating to an employment or self-employed activity which have not been declared to the Director of Social Insurance Servicers in accordance with the current Regulations.

    Mr. Apostolou additionally also mentioned that an important role of Labor Inspectorate is to monitor whether the general terms of employment of employees of all nationalities, are as prescribed by appropriate Law and procedures.

    On an annual basis, Labor Inspectorate conducts approximately 7,000 inspections and 16,000 employees are interviewed. The inspections are performed without notice. Separate interviews are performed with the employees and the employers.

    Labor Inspectorate carries out inspections both during public hours as well as outside public hours to all unoccupied areas of the Republic of Cyprus. The inspections are carried out either on the basis of a complaint through the Cyprus telephone line (77778577), or based on the annual program.

    During the calendar year 2023, 748 complaints have been received for undeclared and illegal work as well as for violations of terms of employment.

    An encouraging result of the efforts of Labor Inspectorate, is that based on the available statistics, there has been a reduction in undeclared work in Cyprus, from 14% in 2017 to 6% in 2023.

    Labor Inspectorate has established on a permanent basis cooperation with social partners regarding information seminars and campaigns.

    Moreover, Labor Inspectorate provides information, advice and training to employers and employees regarding the provisions of the laws. Also, Labor Inspectorate has excellent cooperation with Trade Unions and Employers’ Organizations. Awareness campaigns are raised and various Brochures are issued.

    (2) Transparent and Predictable Working Conditions of Employment Law of 2023 and Protection of Wages (Amending) Law of 2022

    Mr. Xenios Mamas, Senior Labor Relations Officer at the Department of Labor Relations, presented two important legislations:

    (a)Transparent and Predictable Working Conditions of Employment Law of 2023< /u>

    The Law on Transparent and Predictable Working Conditions entered into force on 13.04.2023. The Law strengthens the employers' obligation to provide information to employees regarding the basic employment terms. At the same time, through the new legislation, employees' rights are enriched.

    More specifically, the provisions regarding employees' notification change in such a way that the time allowed for employers to inform them about the basic terms of employment is reduced from one month to seven days. In addition to that, employers must now inform their employees about each individual component of the remuneration (basic salary, allowances, overtime, etc.) and the payment method. Also, businesses now have the right for notifying their employees electronically.

    In relation to the increase in workers’ rights, the most important of these is the reduction of the duration of the probationary period, which, now, cannot exceed six months instead of two years. Also, employers who employ employees with unpredictable working schedules must provide the employees with information regarding the framework for this schedule and the guaranteed pay. By this means, their employees will know in advance what their employers expect of them. Also, parallel employment with two or more employers is allowed, provided that certain conditions stipulated by the Law are met. In addition, on-demand contracts (piece rate pay contracts) are limited only to cases of casual employment.

    Based on the Legislation, employees who will work outside the Republic of Cyprus, the written terms of employment shall include the below information:

    -The country(ies) in which the work will be performed and its expected duration .

    -The currency in which the remuneration will be paid.

    -Benefits in money or in kind, related with the work.

    – Information on repatriation and if applicable, relevant terms.

    Finally, the Legislation establishes an out-of-court mechanism permanent institutions for timely settling disputes arising from violations of the Law.  A specific framework is also instituted regarding social dialogue through which the Law’s implementation will be assessed.

    (b)Protection of Wages (Amending) Law of 2022

    The amending Law on the Protection of Wages 2022 came into force on 16.12.2022. The Law strengthens the legal framework regarding the protection of wages and at the same time, it enhances transparency in wages.

    At first, it must be noted that the Law protects wage payment through the obligation of employers to pay wages by bank transfer or check. In this way, it is beneficial for both employers and employees since it is easy for each other to prove whether wages were paid or not. However, the Law covers some exceptions from the above obligation and, in specific cases, it allows for wage payment in cash. Such exception is the period required for opening a bank account. Another exception covers the eventuality in which credit institutions refuse to open bank accounts to employees. Also, an exception is provided for when employees are paid on a weekly basis, given that this is provided for by a collective agreement or another signed agreement.

    In relation to wages transparency, the Law enhances this by regulating an obligation for the employers to prepare and send payroll statements to all employees. Through this provision, employees will know details of their payments including their salary, deductions and employer's contributions.

    Mr. Mamas clarified that according to the provisions of the law, the employers must keep records showing details of the gross and net salary of their employees, including any deductions over a 6-year period.

    (3 ) Gender Equality in Cyprus compared with the EU

    Ms. Niki Christofi, member of the Corporate Social Responsibility Committee of ICPAC and Business Mentor, presented equality statistics of Cyprus compared with the EU and pointed out that based on the Gender Equality Index, which is a tool that is used by the EU to measure equality in each Member State, significant progress of our Country is observed.

    Despite the fact that Cyprus ranks 21st in the EU on the Gender Equality Index, in 2005 it had a score of 38.5 points out of 100, while in the year 2023 our Country had achieved 60.7 points, almost twice. As publicly indicated by the European Institute of Gender Equality (EIGE), Cyprus is catching up and has grown more quickly over time than other countries, reducing the gap.

    The reason that Cyprus has achieved a score of 60.7 out of 100, is mainly due to the fact that fewer Women in Cyprus are in leadership positions compared to Men. Also, Women spend much more time on housework and caring for minors. Specifically, she mentioned the below:

    During the coronavirus pandemic, 40% of all Women in Cyprus spent more than 4 hours caring for children/grandchildren, compared to Men, whose corresponding percentage was 16%.

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    The share of Board Members in the largest quoted companies, supervisory boards, or boards of directors in Cyprus is 12% for Women and the remaining 88% relates to Men. Also, 14% of the Members of the Parliament in Cyprus relate to Women and the remaining percentage of 86% relate to Men.

    With reference to the Public Service of Cyprus, Men dominate at the A14-A16 scale, with the percentage of 55%. It is noteworthy that in the year 2000, the percentage distribution of women in the Council of Ministers was 0%, in 2015 it was 8.3% and in 2023 it reached 35.3%. It is encouraging that while in 2006 the percentage distribution of Women Judges in Cyprus was only 34.4%, in 2023 it rose to 55.6%.

    It is noteworthy that in the Education Service of Cyprus, Women dominate with a percentage of 75%, as 25% of the of Educators in Cyprus are Men.

    Regarding the “Gender Pay Gap”, Mrs. Christofi pointed out that Cyprus has less gap compared with the EU.

    Ms. Christofi informed the participants that based on the latest data available from the Statistical Service of Cyprus (CYSTAT), in the Accounting/Audit Profession of Cyprus, Women are paid €30 less per month than Men. In Mathematicians and Actuaries, the gap amounts to €64, in the Legal profession the gap totals to €13 and to the Human Resource Managers the gap amounts to €201.

    Ms. Christofi stated that according to research of the International Labor Organization (ILO), it will take at least until the year 2086 to achieve pay equality around the world, with the current rate of progress.

    Ms. Christofi especially thanked the Statistical Service of Cyprus (CYSTAT) for providing the statistical information for Cyprus.

    (4) Presentation of the Law on equal pay between men and women and the new Directive on pay transparency

    Ms. Yiota Kambouridou, Labor Relations Officer A’ at the Department of Labor Relations made a presentation on the Law regarding equal pay between men and women for equal work or work of equal value.

    During her presentation she mentioned that the principle of equal pay between men and women has been a priority at the EU level since 1957, when it was enshrined through the Treaty of Rome, and explained the main reasons why the gender pay gap persists to this day . Through her presentation, she emphasized that the principle of equal pay does not only concern equal work, but also work to which “equal value is attributed” and explained the criteria provided by the Law for the purpose of comparing the value of work , which are among others: the qualifications, skills and experience required to perform the work, the degree of responsibility, the circumstances in which it is carried out and the effort it requires.

    Referring to the most recent developments on the issue at the EU level, Ms. Kambouridou informed the participants about the new Directive (EU) 2023/970, the purpose of which is to strengthen pay transparency and which has a harmonization deadline of 7 June 2026. Specifically, she mentioned that through the Directive several obligations arise for all employers regardless of size, such as for example the obligation to have salary structures, to establish and use gender-neutral job evaluation and classification systems, to provide information to candidates for employment about the starting salary or its range and to make easily accessible to employees the criteria for determining pay levels.

    She further noted that the Directive also provides protection to both job applicants and employees since it prohibits the employer from investigating in any way the salary history of the candidate, but also prohibits contractual terms that restrict employees from disclosing information about their pay. Finally, Ms. Kambouridou referred to the obligation of employers, who employ more than 100 workers, to provide the competent authority (the Department of Labor Relations) with indicators regarding the gender pay gap in their organization. These indicators shall be published by the competent authority in an easily accessible manner that allows comparison between employers, economic sectors and regions.

    (5) Equal Treatment of Women and Men in matters of employment and occupation

    Ms. Alexia Hadjikoumi, Labor Officer at the Department of Labor and Equality Inspector as appointed by the Ministry of Labor and Social Insurance according to the relevant Law (No 205(I)/2002), stated the role of the Department of Labor as the competent authority regarding the equal treatment in the employment between Women and Men. Specifically, the Department of Labor is actively taking all necessary measures to implement the national legislation on the enforcement of the equality principle and the promotion of equal opportunities for Men and Women in the workplace, vocational training, according to the Law on Equal Treatment between Men and Women in Employment and Vocational Training No. 205(I)/2002 as has been amended and is fully harmonized with EU directive 2006/54/EC (recast). Harassment and sexual harassment are contrary to the principle of equal treatment between Men and Women and constitute discrimination on grounds of sex under the above directive and of course under the harmonized law No 205(I)/2002.

    The above legislation is directly related to the Maternity Protection Law since discrimination due to pregnancy or due to family status respectively against a working Woman constitutes direct sex discrimination and is also examined based on the provisions of the Equal Treatment of Men and Women in Employment and Vocational Training Law.

    Any employee who may face any matter of sex discrimination or who may be a victim can submit a complaint to the Equality Inspectors under the Equal Treatment for Men and Women in Employment and Vocational Training Law. This Law No.205(I)/2002 as has been amended, provides in Section 27 the way/procedure of investigating a complaint by the Gender Equality Inspectors of the Ministry of Labor and Social Insurance. Specifically, the inspector will proceed with mediation between the complainant and the employer in order to resolve the issue. If an agreement is reached, the inspector will write a report and both parties will then sign it. If an agreement is not reached, a report will be drafted and it can be used before a Tribunal court.

    (6) National Certification Body for the Implementation of Good Practices on Gender Equality at the Workplace

    Ms. Panayiota Arnou, Labor Relations Officer at the Department of Labor Relations of the Ministry of Labor and Social Insurance, presented the National Certification Body for the Implementation of Good Practices on Gender Equality at the Workplace. The National Certification Body operates under the Department of Labor Relations of the Ministry of Labor and Social Insurance. Its purpose, according to Ms. Arnou, is to certify companies and organizations that implement policies that ensure conditions of gender equality among their employees, equal opportunities in career progression and training, reconciliation of professional and private life, participation in human resources management issues, performance evaluation and remuneration of all employees regardless of gender, as well as prevention and protection from harassment or sexual harassment.

    Ms. Arnou stressed that the benefits of obtaining certification are multidimensional, not only for employees, but also for employers themselves. By integrating gender equality into the policies of a company, the processes of recruitment, evaluation, promotion, remuneration, training, etc. are strengthened, thus improving talent acquisition and retention of qualified employees.

    (7)  Investment in Family

    Ms. Konstantina Achilleos, Communications Officer at ICPAC, stated that a woman, mother and professional, is faced with thousands of challenges every day. The roles that a woman is called to serve are not only complex but also extremely demanding.

    Ms. Achilleos pointed out that the extent that someone can be successful, Woman or Man, depends on his/her personal characteristics and the way that the person takes advantage of the opportunities that he encounters along the way. However, the evaluation criterion of the success must be the same. Regardless of the gender, it should be based on objective criteria and measurable returns.

    Ms. Achilleos, addressed at the Directors and Officers of the Ministry and stated “Claim and protect equality and any other benefit that can be given because the investment in the institution of the family, in the new generation and the children, is what will bring surplus profits in our country in the coming years.

    (8) Gender Equality and Women’s Entrepreneurship

    Ms. Alexandra Theodorou, vice president of the Corporate Social Responsibility Committee of ICPAC, presented Women's Entrepreneurship in Cyprus.

    Ms. Theodorou pointed out that based on the latest statistics available from the Statistical Service of Cyprus (CYSTAT), out of 48.270 self-employed Individuals working in Cyprus in all professions, 59% are Men and 41% are Women.

    The Commissioner for Gender Equality announced a National action plan for women’s entrepreneurship, recognizing that women who decide to start up their own businesses face more difficulties than male entrepreneurs.

    In January 2024, the new national strategy for Gender Equality was presented and entered into force immediately and includes 13 topics and 66 actions. The 13 topics include subjects such as gender budgeting, work, social policy, health, justice, sports, innovation and digital transformation, decision-making positions and mass media.

    Ms. Theodorou stated that 87% of women globally perceive adaptability as the most important success factor for their businesses’ resilience. Women face challenges with optimism, despite the crises we are going through, such as wars and the COVID-19 pandemic.

    Also, in the category of the biggest risks that women in leadership positions consider, inflation and recession are in first place, followed by the risk of a shortage to find talented human resources, and political instability.

    The concept of Environmental, Social, Corporate and Governance (ESG) is gaining more and more value, and companies are emphasizing sustainable and ethical business practices and their ability to generate value in the long-term period. 47% of women worldwide expect that the ESG factors will have a positive impact on corporate growth. The need for reporting and transparency in its implementation is also increasing with 67% of women globally stating an increased demand for ESG reporting and transparency from stakeholders.

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