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The Termination of Employment in Cyprus is governed by law 24/1967 – Termination of Employment law and which entered into force on 1st of February 1968. The main purpose is to protect the employees in the event of unjustified termination of their employment. Furthermore, with this law, Cyprus established a redundancy fund for redundant employees and this offset the effects of redundancy. In general, the Labour law in Cyprus governs the relationship between employers and employees, ensuring the protection of their rights and obligations.
Categories of employees covered by the law
The termination of Employment law covers all employees of the private and public sector including apprentices. It also covers shareholders of private companies who are registered as employees of their companies. The law excludes certain categories of employees such as Employees Government of the United Kingdom and the Navy, Army, and Air Force Institutions N.A.A.F.I. The general provisions of the legislation do not cover redundancy payments because their employers apply different payment schemes.
An employment contract is the foundation of the employer-employee relationship. It should include terms and conditions of employment, such as working hours, wages, leave entitlements, and termination procedures. The law requires employers to provide employees with a written statement of employment within one month of starting work.
Notice of Termination
One fundamental principle of termination law in Cyprus is the requirement of notice periods. The length of the notice period depends on the employee’s length of service. The law stipulates a minimum notice period ranging from no notice for employees with less than 26 weeks of service up to 8 weeks for employees with a length of service of 312 or more weeks.
Employment contracts or collective agreements may specify longer notice periods, ensuring fairness and providing ample time for both parties to make necessary arrangements. The notice period depends on the employee’s length of service as shown below:
|Duration of Continuous Employment||Minimum Notice Period|
|From 26 to 51 weeks||1 week|
|From 52 to 103 weeks||2 weeks|
|From 104 to 155 weeks||4 weeks|
|From 156 to 207 weeks||5 weeks|
|From 208 to 259 weeks||6 weeks|
|From 260 to 311 weeks||7 weeks|
|From 312 and over||8 weeks|
The notice must be in writing and should clearly state when the notice period it starts and when it finishes. In the event that the employee is on a probation period did not require to give a notice of termination, the employer may dismiss the employee immediately without notice.
The probation period can last from 26 weeks to a maximum of 104 weeks. But a new law came into force in Cyprus on 13/04/2023 The Transparent and Predictable Conditions of Employment Law 2023 (25(I)/2023) to be read together with the Termination of Employment Law which provides for a 6-month limit for the probation period. The employer instead of giving notice to the employee has the right to pay him his wages for the period of notice he is entitled to.
Employee’s obligation to give notice to the employer
An employee who intends to terminate his employment, has to give a minimum period of notice to his employer, depending on his duration of employment, as follows:
Period of continuous employment Minimum period of notice
Duration of Continuous Employment
Minimum Notice Period
From 26 to 51 weeks
From 52 to 259 weeks
From 260 weeks or more
However, the right of an employer to a longer period of notice, if he is so entitled by custom, collective agreement, contract, or otherwise, is not affected by the Termination of Employment Law.
Grounds for Termination
Termination must be justified on valid grounds recognized by the law. The Termination of Employment Law provides several legitimate reasons for termination, including redundancy, employee misconduct, poor performance, incapacity, or other justifiable causes. Employers must demonstrate a valid reason for termination and ensure adherence to procedural fairness throughout the process.
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, war operations, political rising, act of God, or destruction of the plant by fire not caused by the wilful act or negligence of the employer.
- Where the employment is terminated at the end of a fixed term contract or because of the attainment by the employee of the normal retirement age by virtue of custom, law, collective agreement, work rules or otherwise.
- Where the dismissal is due to the employee’s own fault. The termination of employment is deemed to be due to the employee’s own fault, if he fails to carry out his work in a reasonably efficient manner or conducts himself in a manner that renders him liable to dismissal without notice (see under ‘Employer’s obligation to give notice above)
The principle of unfair dismissal protection is a crucial aspect of termination law in Cyprus. Unfair dismissal occurs when an employer terminates an employee’s contract without valid justification or fails to follow proper procedures. Employees who believe they have been unfairly dismissed can challenge the termination through legal channels. The law provides avenues for dispute resolution, including the right to file a complaint with the competent authorities or seek legal remedies through the Labour Disputes Court.
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. The amount of severance pay depends on the length of service and is calculated based on a formula prescribed by law. This financial compensation helps mitigate the economic impact of job loss and provides a level of support during the transition period. Compensation is also payable in the case of an employee who terminates his employment because of his employer’s conduct.
No compensation is payable in the case of any employee, who, before the termination of his employment, has attained the pensionable age (65).
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 takes into 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. The amount of compensation up to the wages of one year is payable by the employer and any amount in excess of such wages is payable out of the Redundancy Fund.
Dispute Resolution Mechanisms
To resolve disputes arising from termination, Cyprus has established various mechanisms for employees to seek redress. Employees can file complaints with competent authorities, such as the Department of Labour Inspection, depending on the nature of the dispute. These bodies play a crucial role in mediating disputes, conducting investigations, and facilitating settlements between employers and employees. If the dispute remains unresolved, employees can pursue legal action through the Labour Disputes Court. The availability of these dispute resolution mechanisms ensures that employees have access to a fair and impartial process to address their concerns.
Understanding the general principles of termination law in Cyprus is essential for both employers and employees. Compliance with the legal requirements ensures fair treatment, safeguards employee rights, and promotes a harmonious work environment. The principles of termination law in Cyprus, including notice periods, valid grounds for termination, protections against unfair dismissal, severance pay, legal safeguards, and collective redundancy procedures, are designed to balance the interests of both parties. Employers should be aware of the legal obligations surrounding the termination, including providing appropriate notice periods, justifying termination on valid grounds, and adhering to procedural fairness. Employees, on the other hand, should be aware of their rights and avenues for recourse if they believe they have been unfairly dismissed. By upholding the principles of termination law, Cyprus can maintain a balanced and equitable employment landscape that fosters respect, fairness, and stability.
The above article is purely informative in nature and in no way constitutes legal advice or opinion regarding the Termination of employment. Our law firm provides services, and specialized advice on Employment Law and can represent clients in all Districts of the Republic of Cyprus. You can reach us by calling +357 24 727313 or sending an email to [email protected] .