Social Dialogue and CYTA

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Social Dialogueand CYTA

• Photios Savvides
• Deputy General Manager
• CYTA, Cyprus

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Social Dialogue

• The dialogue between the social partners with the
  aims

• To achieve sound industrial relations and
• To maintain industrial peace.

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Social Framework

• How far can Social Dialogue go?
• Should it be restricted to the three main social
  partners, or include more?
• Should it cover only industrial relations, or
  should it expand to more subjects?
• Is there universal agreement on the need and
  necessity for Social Dialogue?

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Who should be included in Social Dialogue?
Traditional Social Partners
Suppliers
Customers
Environmental Org.
Employers
Competitors
Non- governmental organizations
Corporation
Employees Unions
Government
Regulators
Shareholders
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What subjects should Social Dialogue cover?

• Employment Contracts
• Equal Opportunities
• Full employment
• Reskilling
• Life long learning

INDUSTRIAL RELATIONS

• Corporate Governance
• Corporate Social Responsibility

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Social FrameworkTwo different philosophies

• American School of thought
• Society driven by companies
• The winner takes it all
• ¾ Society
• European School of thought
• Creation of a social safety net
• Companies serve the society at large

Two versions of capitalism!
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Shareholder model

• Short term perspective (we are here for our
  current shareholders and only them)
• Focus on financial measures only (at most, they
  can go as far as MVA and/or EVA)
• Funds primarily from the Stock Exchange
• Private employment contracts (Personal talent is
  the King, and it moves around, trying to sell
  itself for more)
• Cost minimization policies (Downsizing whenever
  things get tough)

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Stakeholder model

• Long term perspective (our role is to create
  value for all our stakeholders - the owners, the
  employees, the customers, the suppliers, the
  society at large)
• Measures are not only financial
• Multiple sources of funds (eg Banks which are
  regarded as partners, Employees through Share
  Ownership schemes and partnerships, etc)
• Collective agreements for employment, Reskilling
  and Lifelong learning are quite popular

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Social Framework in Cyprus

• Influenced by both, but closer to the stakeholder
  model
• Tripartism
• Unions, Employers, Government
• Voluntarism
• Minimum state intervention
• Free collective bargaining between employers and
  trade unions
• However collective agreements are not enforceable
• Industrial Relations Code
• Social Contract

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So, which model is the best one?

• If we vote for the stakeholder model, does it
  mean it is OK to have bad financial results?
• The shareholders are still one major stakeholder
• Isnt it true that bad financial results put at
  risk our Value maximization principle?
• If we vote for the shareholder model, does it
  mean we can forget about Social Dialogue?
• Even if we dont like it, it seems to be a
  necessary process
• The EU seems to be quite serious, so we better do
  something about it
• Corporate Social Responsibility is regarded quite
  highly by consumers and the Commission

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The Organization perspective

• In search of a right Corporate Governance model

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CYTAs perspective

• Fully Unionized workforce
• Collective bargaining
• Active in Corporate Social Responsibility
• Working on a modern corporate governance model
• WE DO BELIEVE IN SOCIAL DIALOGUE

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What is Corporate Social Responsibility

• A concept whereby companies decide voluntarily
  (and beyond legal obligations) to contribute to a
  better society and a cleaner environment.
• (Taken from the Green Paper on Promoting a
  European framework for corporate social
  responsibility).

Surveys in Cyprus and in other countries show
that both consumers and employees value Corporate
Social Responsibility.
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Successes of Social Dialogue in CYTA

• Agreement of Trade Unions on the need to
  transform CYTA to a public company, issuing
  shares to employees, in order to gain flexibility
  to face competition.
• Expansion of the working hours of the Customer
  Service Offices in order to serve its customers
  better, with the agreement and cooperation of the
  Trade Unions.
• Substantial discussions with Unions for the
  introduction of Performance Management and
  Rewards Incentives systems, as a means to
  retain key personnel in case they are attacked
  by competition

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Thank You!