Cyprus hotel unions demand crackdown on "rented" workers: what hospitality staff need to know

Cyprus hotel and leisure-centre workers have a new labour problem — and this time it is not salaries or conditions. It is the identity of who is actually employing them.

Trade unions representing the hospitality sector have written formal letters to the island's Labour Minister and two senior department heads, demanding immediate government inspections across hotels and leisure centres. The reason: a sharp and accelerating rise in the use of so-called "rented workers" — temporary staff supplied by third-party agencies — that unions say is breaking the law, undermining collective agreements, and leaving workers exposed.

The unions involved are Ouxeka-Sek and Syxka-Peo. Their letters were addressed to Labour Minister Marinos Mousiouttas, Labour Relations Department Director Andis Apostolou, and Labour Department Director Alexandros Alexandrou. The message was unambiguous: the practice is rising, a previous warning was ignored, and the government needs to act now.

What are "rented workers"?

The term is blunt, but accurate. "Rented workers" — or temporary agency workers — are employees who are hired by a staffing agency and then placed with a hotel or leisure centre on a temporary basis. The hotel uses the labour but does not directly employ the worker. The worker's formal employer is the agency.

This arrangement is legal in Cyprus under specific conditions set out in the Temporary Agency Work Law of 2012, Law 174(I)/2012. That legislation exists precisely because the EU recognised that agency work is a real part of modern labour markets — but required member states to ensure that temporary workers receive the same basic working conditions as permanent staff doing the same job.

The problem, according to Ouxeka-Sek and Syxka-Peo, is that hotels in Cyprus are using this arrangement in ways that violate those conditions. The workers placed through agencies are not receiving the same terms as directly employed colleagues. Collective agreements — which set out pay scales, hours, leave entitlements and other protections specific to the hospitality sector — are being bypassed. And the number of workers in this situation is growing.

Why this is a problem now

This is not the first time the issue has been raised. The Labour Relations Department Director, Andis Apostolou, had already written to hoteliers' associations on 17 June 2025, setting out the relevant legal provisions and their obligations under Law 174(I)/2012.

That letter was apparently insufficient. According to the unions' correspondence, the practice has not only continued but is showing an increasing trend in the period since the warning was issued. The government told hotels what the law required. The hotels continued regardless. The unions are now demanding inspections rather than letters.

The timing also matters. The unions note that the rise in rented workers is compounding problems created by the new framework governing employment of workers from third countries — a system that has already generated its own compliance headaches across the hospitality industry as operators navigate the updated rules on non-EU hiring.

The construction sector parallel

Hospitality is not the only sector where this pattern has emerged. Earlier in July, the major unions Peo, Sek and Deok raised identical concerns in the construction sector, warning that the growing use of temporary agency workers there was leading to collective-agreement violations, unsafe working conditions, and — in their words — workers being treated as "mere tools."

The parallel is significant. Two of Cyprus's most labour-intensive, seasonal and internationally competitive sectors are experiencing the same pattern at the same time: employers substituting directly employed staff with cheaper agency placements, bypassing the collective agreements that set the floor for wages and conditions in both industries.

In both cases, the underlying economics are the same. Direct employment under a collective agreement carries fixed costs — minimum pay rates, overtime rules, leave entitlements, social insurance contributions at the right levels. Agency workers can be placed at lower effective cost, with the agency absorbing some employment obligations and the hotel retaining operational flexibility. For operators under margin pressure — which describes most of the Cyprus hotel sector in 2026 — the temptation is obvious.

What it creates for workers is a two-tier workforce. Directly employed staff have the protection of the collective agreement. The person doing the same job at the desk or in the kitchen, placed by an agency, may not.

The government's response

The government has acknowledged the broader problem, though the response so far has been structural rather than immediate. Last week, the ministry confirmed that its inspection service would be doubled — from the current eight inspectors to sixteen — allowing more frequent checks specifically targeting illegal and undeclared employment.

Eight inspectors covering the entirety of the Cypriot workforce was, by any reasonable measure, inadequate. The doubling to sixteen is a step forward, though still modest relative to the scale of the hospitality sector alone, which employs tens of thousands of workers across hundreds of properties from Paphos to Famagusta.

The unions are not waiting for the new inspectors. Their letters call for immediate inspections to begin across hotels and leisure centres — now, with the existing team — to ensure Law 174(I)/2012 is being followed and that the collective agreements covering the sector are being honoured.

What this means for hospitality workers

If you work in a Cyprus hotel or leisure centre — whether directly employed or placed through an agency — this matters directly to your pay packet and your working conditions.

If you are a direct employee, the collective agreement covering your sector should already apply. If your employer is supplementing their workforce with agency workers who are being paid less or working under inferior terms for the same roles, that directly undermines the negotiating position of your union and, over time, of directly employed workers.

If you are placed through an agency, Law 174(I)/2012 entitles you to the same basic working conditions as if you had been directly recruited by the hotel for the same job. That includes pay, working hours, rest periods, annual leave and access to collective agreement provisions where they apply to the role. If your conditions as an agency worker are materially worse than those of permanent colleagues doing the same work, that may constitute a breach of the law.

The practical reality is that many agency workers do not know their rights under Law 174(I)/2012, do not know what the collective agreement for their sector specifies, and do not have a straightforward channel to report violations. The unions exist precisely for this purpose — and the current inspection push is the best near-term opportunity for workers in non-compliant arrangements to have their situation reviewed.

What the law requires

Under Law 174(I)/2012, the core principle is equal treatment: a temporary agency worker must receive, for the duration of their assignment, at least the basic working and employment conditions that would apply if they had been directly recruited by the user undertaking (in this case, the hotel or leisure centre) for the same position.

Basic conditions covered include:

• Working time, rest periods and overtime
• Annual leave entitlement
• Pay — at minimum, the rate that a direct hire would receive for the same role under any applicable collective agreement
• Access to collective facilities (canteens, childcare, transport) on the same basis as permanent staff

There are limited exceptions — including a qualifying period during which the equal-treatment principle may be modified if the agency has a framework agreement with a trade union — but these exceptions require specific conditions to be met and cannot be used as a blanket workaround.

The broader picture

The hospitality sector is one of the most exposed segments of the Cypriot labour market. It is seasonal, it relies heavily on informal recruitment channels, it employs a large number of workers from third countries, and it operates on tight margins that put constant pressure on labour costs. All of these factors make it fertile ground for the kind of compliance shortcuts that the unions are now calling out.

The inspection service doubling and the formal union intervention create a window where the compliance picture could improve materially. Whether it does will depend on whether the inspections actually happen at scale — and whether the penalties for violations are sufficient to make the legal route more attractive than the current practice.

For workers in the sector, the message is clear: know your rights under Law 174(I)/2012, know what your collective agreement specifies, and use the union structures that exist to report breaches. The mechanism for enforcement is there. The pressure to use it has never been stronger.

For broader context on working rights in Cyprus, see our employee rights guide. For salary benchmarks across the hospitality sector, see our hotel and restaurant salary guide.