Increased dismissals of employees due to redundancy reasons

Introduction
Actual reduction of turnover
Restructuring of businesses due to reduction in turnover
Abolition of employee's position

Introduction

There has recently been a large increase in the number of redundancies attributed by employers to the economic crisis. However, redundancies must be supported by objective criteria and the burden of proof rests with the employer, which must show that the employee has been rightly dismissed for valid redundancy reasons. These criteria are stated in the law and have been analysed in numerous court cases.

According to the Termination of Employment Laws of 1967 (Law 24/1967), some valid redundancy reasons are as follows.

Actual reduction of turnover

This is ascertained by taking into consideration the usual workload of the business during the past three years (at a minimum) before the redundancies occurred. In A Iasonos Ltd v Christou ([1994] 1 CLR 703), the Supreme Court stated that a temporary reduction in workload cannot constitute an adequate reason for supporting redundancy, as businesses experience daily fluctuations with regard to their workload.

Restructuring of businesses due to reduction in turnover

As the Supreme Court has explained (eg, in A/foi Galatarioti Ltd v Paraskeva Grigora ([2001] 1 CLR 1985)), restructuring can constitute a valid reason for supporting redundancy only when it occurs at such a level of severity that it results in a change of the employee's duties, leading to a decrease of his or her necessity within the business.

Abolition of employee's position

Dismissals are ruled invalid if, after making an employee redundant, an employer hires a new employee to perform the same duties as those of the dismissed employee. However, redundancy is usually not affected where new employees may have been hired to perform different duties from those carried out by the dismissed employees or by the assignment of the dismissed's duties to another employee who performs the same duties within the business.

If redundancy is upheld, the employee will be compensated by the statutory redundancy fund and not by the employer.

For further information on this topic please contact George Z Georgiou at George Z Georgiou & Associates LLC by telephone (+357 22 763 340), fax (+357 22 763 343) or email ([email protected]).