Antis Triantafyllides & Sons advises the CySEC on the constitutionality of salary and pension cuts of the public sector
Our firm represented the Cyprus Securities and Exchange Commission (“CySEC”) successfully in its appeal against a judgment of the Administrative Court, which held that the legislations enacted during the period 2011-2012 in relation to salaries and pension cuts, as well as the limitation of salary increases of public sector employees, were unconstitutional. According to the judgment, these legislations could not fall within the derogations provided in Article 23 of the Cyprus Constitution, which safeguards the right to property.
The Supreme Court judgment has a very significant economic impact in cutting government spending, since the legislations had been enacted as imminent measures during the financial crisis, with the sole purpose of reducing the public deficit.
The Supreme Court agreed with the submissions brought forward by our firm, holding that the right to property did not extend to the right to salary of a certain amount. Therefore, in cases where the economy of a country faces a critical situation, the change in the salaries is acceptable, under certain conditions and provided that the change shall not pose a threat to the decent life of the employees.
Following this approach, the Supreme Court, in its landmark judgment, held that the change in the amount of salaries and pensions was not arbitrary in the circumstances, taking into account that the cuts were decided on a sliding scale based on wage and the temporary nature of the measures taken. In regard to the cuts to salary increases, the Supreme Court held that such increases were only awarded upon certain conditions and therefore, the employees did not have any legal expectation to salary increases.