A severe labour shortage in Cyprus' construction sector is pushing trade unions and contractors towards confrontation, with both sides agreeing that workforce shortages pose a serious challenge but differing sharply on how the problem should be addressed, particularly regarding the employment of workers from third countries.
The construction unions of PEO, SEK and DEOK have objected to the granting of work permits for third-country nationals to contractors and subcontractors whom they accuse of failing to comply with collective agreements and labour legislation.
Contractors, meanwhile, are warning that restrictions on hiring foreign workers could result in delays to construction projects and investment.
According to a joint union statement, authorisation for the employment of third-country nationals cannot continue without meaningful controls to ensure compliance with collective agreements and labour law.
Unions threaten action
Adamos Katalanos, secretary-general of the PEO Construction Workers' Union, told Politis that no progress has been made since a meeting with Labour Minister Marinos Mousiouttas on 24 June.
"It is unacceptable for permits to be granted to contractors who violate collective agreements," he said, describing the issue as highly serious for the unions.
"We expect immediate solutions and do not rule out strike action."
Similarly, Giorgos Kasouris, secretary-general of the Federation of Industrial Building Workers of Cyprus (OBIEK-SEK), said that despite assurances from the minister, unions had not been invited back to continue discussions.
"The situation we are experiencing is tragic," he said.
The unions are calling for:
- No issuance or renewal of work permits for companies that violate collective agreements or labour legislation.
- Meaningful screening of applications through the re-establishment of technical committees involving both trade unions and employer organisations.
- Increased inspections at construction sites.
- Full enforcement of collective agreements and labour legislation.
Growing demand for workers
For contractors, however, labour shortages have become a critical challenge.
Stelios Gavriel, president of the Cyprus Building Contractors Association, described the lack of sufficient and appropriately trained workers as a major problem, intensified by the repatriation of more than 8,000 Syrian workers, who previously formed an important part of the sector's workforce.
He noted that growing construction activity has significantly increased staffing requirements.
The number of projected residential units included in building permits rose from 10,506 in 2021 to 16,171 in 2025, an increase of approximately 54%.
"The reality is that the available workforce is not sufficient to meet the sector's needs," Gavriel said.
"This causes delays, increases costs, limits productivity and negatively affects business competitiveness."
He warned that the shortage is affecting both investment projects and the supply of new housing, with implications for the wider economy and the housing market.
Concerns over permit approvals
Gavriel also expressed concern about the current process for approving employment permits for workers from third countries.
He argued that despite growing demand, there appears to be an informal restriction on the categories of workers being approved and noted that there has so far been no substantial arrival of workers under the Cyprus-Egypt labour agreement.
He also rejected the use of fixed quotas in the approval process.
"Approvals should not be based on rigid percentages such as 30% or 50%," he said, "but on the actual needs of each contracting company."
