Cyprus employment law is a mixture of statute and case law. Statutory provisions govern certain aspects of an employment relationship, such as termination, working hours, annual leave and social insurance contributions.  On the other hand, every employment relationship is contractual in nature and to the extent that specific legal provisions do not regulate any of its aspects, general contract law applies.

Protection is afforded against unfair dismissal to all employees, under the Termination of Employment Law 24/67 as amended. The legislation covers all employees, whether in private sector or public sector, including apprentices.

Termination of an employment

An employer intending to terminate the employment of an employee, who has completed at least 26 weeks of continuous employment, is obliged to give to the employee a notice of termination in writing.  The minimum period of notice depends on the length of his service as follows:

Period of employment Period of notice to be given
0 to 26 weeks No notice
26 to 51 weeks (6 months – 1 year) 1 week
52 to 103 weeks (1-2 years) 2 weeks
104 to 155 weeks (2-3 years) 4 weeks
156 to 207 weeks (3-4 years) 5 weeks
208 to 259 years  (4-5 years) 6 weeks
260 to 312 weeks (5-6 years) 7 weeks
More than 312 weeks (6 years) 8 weeks

The right of an employee for a longer period of notice, in case there is a respective provision in the contract of employment, is not affected by the Termination of Employment Law.  The employee and the employer have the right to a longer period of notice, if that is so entitled by custom, law, collective agreement, contract or otherwise.

The employer has the right to require the employee to accept payment of his wages, in lieu of the period of notice to which he is entitled.

An employee whose services have been terminated is entitled to payments for:

  • all his accrued work until the last day of his employment,
  • the proportion of annual leave except for the days he has taken during the year (the employee can claim accumulated leave up to 2 years unless there is another practice in the company);
  • the ratio of the 13th and / or 14th salary when there is agreement or practice for payment of a proportion
  • the provident fund where it exists and depending on what the statutes of each Fund provide.

The employer has the right to terminate the employment of an employee without notice, where the employee’s conduct is such as to justify his dismissal without notice:

  • Conduct of the employee makes it clear that the relationship between the employer and the employee cannot reasonably be expected to be continued.
  • Gross misconduct by the employee in the course of his duties.
  • Commission by the employee in the course of his duties of a criminal offence without the agreement, expressed or implied, of his employer.
  • Immoral behaviour by the employee in the course of his duties.
  • Serious or repeated contravention or disregard by the employee of work or other rules in relation to his employment.

Where the employer does not exercise his right to dismissal without notice within reasonable time, the termination of employment is deemed to be unjustified.

Employee’s right to compensation for unlawful dismissal

An employee, whose employment is terminated unlawfully after he has completed 26 weeks of continuous employment with an employer, is entitled to compensation. Compensation is also payable in the case of an employee who terminates his employment because of his employer’s conduct.

The amount of compensation is decided by the Labour Disputes Court after an application by the employee, but in no case it can be less than the amount of redundancy payment, to which the employee would be entitled, had he been declared redundant, or higher than two years wages. In assessing the amount of compensation, the Court gives consideration, inter alia, to the emoluments of the employee, the length of his service, the loss of his career prospects, his age and the circumstances of his dismissal.

Compensation is payable as following:

  1. For the first 4 years of continuous employment, 2 weeks’ wages per completed year.
  2. For 5th to 10th years, 2 1/2 weeks’ wages per completed year.
  3. For 11th to 15th years, 3 weeks’ wages per completed year.
  4. For 16th to 20th years, 3 1/2 weeks’ wages per completed year.
  5. For 21st to 25th years, 4 weeks’ wages per completed year.

Dismissal not giving right to compensation

No compensation is payable in the case of any employee, who, before the termination of his employment, has attained the pensionable age (65).  An employee is not entitled to compensation if his employment has been terminated for any of the following reasons:

  • Where the employee has become redundant.
  • Where the termination is due to force majeure, act of war, civil commotion, act of God, destruction or similar circumstances.
  • If the employment is terminated at the end of a fixed period of employment.
  • Dismissal due to the employee’s own fault, i.e. he fails to carry out his work in a reasonably efficient manner or commits serious disciplinary or criminal offence. In such a case the employer is entitled to terminate the employment without notice.

Dismissal by reasons of redundancy

Where an employee is dismissed on grounds of redundancy, the employer is obliged under the legislation to give notice to the Ministry of Employment and Social Insurance of any proposed redundancy dismissal at least one month prior the date of termination.

“Redundancy” is defined as termination of employment in the following cases:

  1. The employer has ceased or intends to cease carrying on the business in which the employee is engaged.
  2. The employer has ceased or intends to cease carrying on the business at the place where the employee is engaged.
  3. For any of the following reasons, which relate to the operation of the business:
  • Modernization, automation or any other changes in the methods of production or organization which reduces the number of necessary employees
  • Changes in the products or the methods of production or the necessary qualifications of the employees
  • Closing down of departments
  • Difficulties in placing products in the market or credit difficulties
  • Lack of orders or raw materials
  • Rarity of means of production
  • Reduction of the capacity of work

Within 8 months of redundancy, if an employee wishes to increase his workforce, he must give priority to employees dismissed on grounds of redundancy.

An unfairly dismissed employee can bring a claim at the Industrial Dispute Tribunal or a claim for breach of contract in the District Court, depending on the circumstances.

Power of the Labour Disputes Court to order re-instatement of an employee

Where the termination of the employment of an employee who has worked for an employer employing 19 or more employees, is considered unlawful and as an act of bad faith, the Labour Disputes Court, may, following an application by the employee concerned and if it thinks fit considering the circumstances of the case, order the re-instatement of that employee, as well as the payment of damages for the actual loss suffered by the employee. The amount of damages cannot exceed the wages of 12 months.

If you’ve been fired, you may have rights to pay, damages, or unemployment compensation. In certain circumstances, you may also have a valid claim for wrongful termination against your former employer. Speaking with an experienced lawyer from our team can help you understand your rights and make an informed decision about how to proceed.

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