The Administrative Court has dismissed all appeals challenging the legality of salary, pension, and lump-sum reductions for employees in the civil service and wider public sector. These measures were implemented to ensure the sustainability of public finances in 2012, as stated in a ruling issued on 30 October 2024.
The Legal Service announced that the Court dismissed 113 consolidated appeals against salary reductions for state employees and 64 consolidated appeals against pension and lump-sum gratuity reductions, based on the 2012 Law on the Reduction of Salaries and Pensions of Officers, Employees and Retirees of the State Service and the Wider Public Sector (Law 168(I)/2012) and the 2012 Law on Pension Benefits for State Employees and Employees of the Wider Public Sector, including Local Government Authorities (Law 216(I)/2012).
The Court ruled that the reduction in salaries, pensions, and lump-sum gratuities, which are considered property protected under Article 1 of the First Protocol of the European Convention on Human Rights and Article 23 of the Constitution, does not constitute a deprivation of property rights. The reduction was applied in a gradual manner, was not substantial enough to affect the core of the right, and there was no evidence that it impacted the appellants’ right to a dignified living and social security.
Furthermore, the Court decided that, upon their employment, the appellants accepted the terms of employment governed by the various statutes applicable to employees in such organisations and/or public sector employment. Therefore, there was no breach of the freedom to contract, as they did not contract with the State in the strict sense of the term “contract.”
Additionally, the Court found that the principle of equality was not violated, as all civil service and public sector employees contributed from their earnings, with cuts made proportionately to the amount of their salaries.
Finally, the Court accepted the Republic’s position that the reduction in salaries, pensions, and lump-sums was a temporary measure solely aimed at achieving the sustainability of public finances.
Consequently, the reduction does not equate to tax-style deductions, which fund State expenditures.
In conclusion, the Court found that the measures taken were proportionate to the intended purpose, which was to ensure the sustainability of public finances.
The cases were handled by Ms Elena Simeonidou, Senior Counsel of the Republic, and Ms Katia Hadjidemetriou, Counsel of the Republic A’.
