Employment & labour law in Cyprus

Country snapshot

Key considerations

Which issues would you most highlight to someone new to your country?

The following are important issues in Cypriot employment:

• the grounds of prohibited discrimination;
• immigration and the right to work;
• lawful grounds of termination;
• data protection;
• fixed-term versus permanent employment;
• part-time versus full-time employment;
• safeguarding and protecting employee rights in the event of a transfer of undertakings, businesses or parts thereof;
• protection of wages; and
• employer liability insurance.

What do you consider unique to those doing business in your country?

The following are unique aspects of doing business in Cyprus:

• the ease of setting up a business and kick-starting work;
• the positive economic outlook;
• strong business support services;
• the low cost of doing business;
• an attractive and transparent tax regime; and
• an efficient regulatory structure.

Is there any general advice you would give in the employment area?

Employers are advised to adhere to labour regulations closely and foreign employers that are not familiar with the Cypriot legal system are advised to consult local lawyers. They should also communicate with the Social Insurance Services, the Department of Labour Inspection and the Department of Labour Relations at regular intervals, directly or through their lawyers, in order to ensure adherence to the applicable employment rules. Employers are also advised to prepare comprehensive employment contracts and internal policies, in order to cover as many issues not covered by statute as possible.

Emerging issues/hot topics/proposals for reform

Are there any noteworthy proposals for reform in your jurisdiction?

Some noteworthy reform proposals include the following:

• There is a debate surrounding the introduction of a statutory national minimum wage as there is currently a statutory minimum wage in only selected professions.
• Social insurance contributions increased on 1 January 2019 and will increase every two years from now on. This is putting greater strains on both employer costs and employee salaries.

• In 2019 a new universal tripartite healthcare system will be established, which requires contributions from employers, employees and the state.

What are the emerging trends in employment law in your jurisdiction?

Emerging employment law trends include:

• an increase in flexible forms of employment;
• the application of the EU General Data Protection Regulation in the employment relationship;
• the increase in the social media presence for both employees and employers, which means that more rigorous privacy policies are required; and
• a gradual shift from collective bargaining to individual agreements, despite the fact that Cyprus is traditionally a highly unionised country.

The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

The employment relationship in the private sector is generally governed by the terms of the contract of employment. In addition, there are certain statues which govern specific issues. The main employment-related statutes include:

• the Termination of Employment Law 1967, as amended;
• the Social Insurance Law 1980, as amended;
• the Annual Paid Leave Law 1967, as amended;
• the Protection of Maternity Law 1997;
• the Minimum Salaries Law, as amended;
• the Equal Treatment at Work and Employment Law 2004, as amended;
• the Health and Safety at Work Law 1996, as amended;
• the Law Providing for an Employer’s Obligation to Inform Employees of the Conditions Applicable to their Contract or Employment Relationship 2000; and
• the Collective Redundancies Law 2001.

Further, the Constitution guarantees certain fundamental rights relating to employment (eg, the rights to work, to strike and to equal treatment). International treaties that were ratified by the Republic of Cyprus regarding employment issues are also applicable. EU regulations and directives regarding employment and labour issues are also applicable in Cyprus following the country’s accession to the European Union in 2004.

Who do these cover, including categories of worker?

These laws and regulations apply to all employees. There are a number of other lex specialis statutes which apply to specific sectors and types of worker (eg, retail sector workers, personnel aboard vessels, underage workers and military personnel).

Misclassification

Are there specific rules regarding employee/contractor classification?

The question as to whether the relationship of employer and employee exists is always a question of fact and all the facts of each particular case must be taken into consideration. The criteria for determining whether an individual is considered to be an employee not only include the payment of a salary for services rendered and the way that the parties choose to label their relationship, the courts will also take into account:

• whether the employer exercises control over the work of the employee;
• whether renumeration is dependent on the performance of the employee; and
• the employee’s role in the employer’s business.

Contracts

Must an employment contract be in writing?

No, but employers are obliged by statute (the Law Providing for an Employer’s Obligation to Inform Employees of the Conditions Applicable to their Contract or Employment Relationship 2000 (Law 100(I)/2000)) to provide employees with specific information about the terms of employment within one month from the commencement of the employment.

The information given by the employer must be in writing and must include at least:

• the identity of the parties;
• the place of work and the registered address of the business or the home address of the employer;
• the position or the specialisation of the employee, their grade, the nature of their duties and the object of their employment;
• the date of commencement of the contract or the employment relationship and its anticipated duration if this is for a fixed time;
• notice periods;
• the duration of any annual leave to which the employee is entitled, as well as the manner and time in which it may be taken;
• the time limits which must be observed by the employer and the employee in the event of a termination of employment, either by consent or unilaterally;
• all types of renumeration to which the employee may be entitled and the time schedule for payment;
• the usual duration of the employee’s daily or weekly employment; and
• details of any collective agreements which govern the terms and conditions of the employment.

Are any terms implied into employment contracts?

Under Cypriot law, employees have an implied duty of loyalty and fidelity to their employer and should offer their services in a trustworthy and faithful manner.

Are mandatory arbitration/dispute resolution agreements enforceable?

The Industrial Disputes Tribunal has exclusive jurisdiction to hear and decide on any disputes arising from the application of the law relating to the termination of employment. However, any person has the right to apply to a district court in relation to a dispute concerning employment where their claim is greater than the maximum amount that may be ordered by the Industrial Disputes Tribunal (two years’ salary) or for any claim arising during the first 26 weeks of employment. Recourse to one court excludes the jurisdiction of the other. In view of the above, it is questionable whether an arbitration clause is enforceable without the consent of both parties.

How can employers make changes to existing employment agreements?

Amendments to an employment agreement may only be made with the consent of both parties. The consent must be confirmed either with an amending agreement or by conduct. Any unilateral change in employment terms that is detrimental to the employee may give rise to a claim for constructive dismissal and/or damages.

Foreign workers

Is a distinction drawn between local and foreign workers?

The maximum period of stay for all foreign nationals for the purpose of employment is four years, except in the livestock farming and agriculture sectors, where the maximum period is six years. This limitation does not apply in a few exceptional cases (eg, highly skilled personnel employed in companies with a significant turnover and athletes or coaches of sports teams). EU nationals may work in the Republic of Cyprus provided that they comply with a relatively simple and straightforward registration procedure, without any further restrictions. Non-EU nationals are required to obtain a residence and employment permit before commencing employment in Cyprus.

Recruitment

Advertising

What are the requirements relating to advertising positions?

There are no specific requirements. Employers cannot advertise unlawful types of work or discriminatory grounds for non-recruitment.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Information relating to criminal prosecutions or convictions constitutes sensitive personal data. The processing of sensitive personal data is permitted in exceptional circumstances, where one or more of a series of conditions are satisfied. The most common legal way of processing criminal history data is when a candidate has provided their explicit consent. However, the general principles of personal data processing must be followed, which include:

• lawfulness, fairness and transparency;
• specified, explicit and legitimate purposes;
• adequate, relevant and limited to what is necessary in relation to the purposes for processing;
• accuracy;
• storage limitation; and
• integrity and confidentiality.

As the Directive of the Commissioner for the Protection of Personal Data for the Processing of Personal Data in the Field of Employment Relationships provides, an employer may collect and retain data concerning previous prosecutions or convictions of an employee (including candidates) only where this is absolutely necessary for purposes which are linked to the needs of an employment relationship (ie, when the duties of a particular position justify an employer choosing candidates who have not been previously prosecuted or convicted for particular offences which are relevant to the duties of the position in question) or to cases where this is required by national law. In such cases, the employer must inform the relevant data subjects before the collection of the relevant data about the purpose of such collection.

(b) Medical history?

Collection and processing of health data falls within the general framework of Article 9 of the EU General Data Protection Regulation (GDPR) (2016/679), which repealed the Data Protection Directive (95/46/EC) and is further clarified by the Directive of the Commissioner for the Protection of Personal Data for the Processing of Personal Data in the Field of Employment Relationships. Article 9 prohibits the processing of such data. Nevertheless, in certain circumstances processing is permitted on the grounds of certain lawful bases. The most common basis for such processing is if it is necessary for the assessment of the working capacity of the employee (Article 9(2)(h) of the GDPR and Paragraph 11.5(a) of the Directive of the Commissioner for the Protection of Personal Data).

A privacy notice must be provided to the employee stipulating that, within the context of the employment relationship, the employee is obliged to provide the employer with a medical report every ‘X’ months or years, which shall include ‘A’, ‘B’ and ‘C’ data, which the employer collects and processes in order to assess the working capacity of the employee (ie, stating the purpose and lawful basis for the processing of the data).

(c) Drug screening?

Drug screening is not directly covered in the GDPR. However, it falls into the category of medical information, which requires a lawful basis for collection and processing, as explained directly above. The employer must assess the necessity of collecting the data for the purposes of the legitimate interests pursued against the interests or fundamental rights and freedoms of the data subject. Some factors that employers should consider regarding the collection and processing of such data include:

• the confidentiality and security of the information;
• minimising the amount of health information stored;
• the length of time for which the information is stored;
• communication with employees regarding the information collected and the reasons for the collection; and
• providing employees with access to their personal information.

(d) Credit checks?

Employers may collect and process credit data, provided that it is relevant, necessary and in compliance with the general principles of personal data processing within the context of employment relationships, which include:

• lawfulness, fairness and transparency;
• specified, explicit and legitimate purposes;
• adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed;
• accuracy;
• storage limitation; and
• integrity and confidentiality.

A credit history check, even with the candidate’s consent, is permitted in limited cases only (eg, for roles which involve the regular and direct handling of money or control over finances). The question of how far back an employer may look in relation to an individual’s credit history must be determined on a case-by-case basis, with reference to the general principles of data processing.

(e) Immigration status?

The employer may request the required right to work documents.

(f) Social media?

Generally, employers are not permitted to check a candidate’s social media account. However, if such screening is conducted by looking at a publicly available profile, this is not prohibited per se, unless a decision on non-recruitment is based on unlawful grounds of discrimination, by virtue of information extracted from such a profile (eg, not employing someone because the employer disagrees with a political opinion that the candidate has expressed on their social media account).

(g) Other?

N/A.

Wages and working time

Pay

Is there a national minimum wage and, if so, what is it?

In general, wages are not regulated by law and can be negotiated by the employer and the employees (or their representatives) through individual or collective agreements.

However, for certain occupations, a minimum wage is set annually by order of the Ministerial Council and comes into force on 1 April of each year. The occupations covered by the minimum wage provisions are:

• clerks;
• shop assistants;
• school assistants;
• childcare workers; and
• nursing assistants.

These employees are entitled to €870 per month, which increases to €924 after six months of continuous employment.

Security guards and cleaners of business or corporate premises are also covered by minimum wage provisions. The minimum wage for security guards has been revised to an hourly rate of €4.90, which is increased to $5.20 after six months of employment at the same employer, is increased to €5.20. The hourly rate of pay for newly recruited cleaners is €4.55, which is increased to $4.84 after six months of employment at the same employer.

Are there restrictions on working hours?

Section 7(1) of the Organisation of Working Time Law (L.63(I)/2002) provides that the number of working hours must not exceed 48 per week, including overtime, over a reference period of four months. However, in certain sectors (eg, the hotel industry) different limitations may apply.

Night workers should not, on average, exceed eight working hours per day within a period of one month or any other period specified in a contract. Night workers whose work is hazardous or physically or mentally demanding should not exceed eight hours of night work.

Hours and overtime

What are the requirements for meal and rest breaks?

Employees are entitled to a minimum of:

• 11 continuous hours of rest per day;
• 24 continuous hours of rest per week; and
• either two rest periods of 24 continuous hours each or a minimum of 48 continuous hours within every 14-day period.

How should overtime be calculated?

Overtime pay is not regulated by law in Cyprus (except in the retail sector) and is usually a matter of negotiation between the employer and employees. However, in certain industries working time is regulated by specific legislation and regulations or by collective agreements.

What exemptions are there from overtime?

According to Section 7(4) of the Organisation of Working Time Law (L.63(I)/2002), the 48 hours’ maximum working week does not apply if:

• the worker consents to perform the work concerned;
• the worker is not subjected to any adverse consequences by their employer if they do not agree to perform such work;
• the employer keeps up-to-date records of all workers engaged in such work;
• the records are placed at the disposal of the competent authority, which may prohibit or restrict the possibility of exceeding the maximum weekly working hours for reasons of the health or safety of the workers; and
• the employer provides the competent authority at its request with information regarding the consent of the workers.

Managing executives or other persons with autonomous decision-making powers, employed family members and employees in religious institutions are also exempt from any limitation on working hours.

Is there a minimum paid holiday entitlement?

The Annual Holidays With Pay Law (L.8/1967) provides that the minimum holiday entitlement per year is 20 working days for employees working five days per week and 24 working days for employees working six days per week, provided that the employee has already worked for at least 48 weeks within the year, which will be paid through the Central Holiday Fund to which each employer contributes 8%.

When employers opt to pay annual leave directly to employees and provide more beneficial terms, they are exempt from contributing to the Central Holiday Fund.

An employee is not entitled to paid annual leave if they have worked for less than 13 weeks in the year. If the employee has worked for more than 13 weeks, they are entitled to the pro-rata amount of holiday.

What are the rules applicable to final pay and deductions from wages?

All employees must be given all renumeration and benefits that they are entitled to, up to the effective date of termination. Pursuant to Section 10 of the Protection of Wages Law (Law 35(I)/2007), any deductions from employee wages are strictly prohibited, except for:

• deductions provided for by law or regulation;
• deductions in accordance with the rules of a pension scheme, provident fund or medical care fund;
• deductions by order of a court;
• deductions for damages in respect of a loss suffered by a business as a result of an intentional act or gross negligence of the employee concerned; and
• other deductions, subject to the employee’s consent, and provided that the following conditions are satisfied:
  • Before any deduction from the wages for damages to the employer, consultations must take place with the employees’ representatives with a view, among others, to determining the amount of damages and the manner of payment of damages; in case there is no recognised machinery of representation of the employees at the level of the establishment, consultations must take place with the employee themselves.
  • Where the above-mentioned consultations do not result in a settlement, the dispute is referred to the Ministry of Labour and Social Insurance for Mediation and, if no agreement is reached at the mediation stage, the ministry refers the dispute to the Labour Disputes Court.
  • Deductions from wages are limited to the extent that allows the employee to maintain themself and their family.

Employers in violation of Section 10 of the Protection of Wages Law can be prosecuted and issued with a fine of up to €15,000 and/or up to six months imprisonment.

Record keeping

What payroll and payment records must be maintained?

Ordinarily the payroll administrator must hold the following information relating to an employee:

• full name;
• social insurance number;
• complete address;
• date of birth;
• sex;
• occupation;
• offer letter, contract of employment or appointment letter;
• working hours and attendance records;
• paid leave days;
• regular pay rate;
• overtime earnings;
• other additions to wages (eg, bonus pay);
• expense reimbursement forms and receipts;
• payment records;
• all documentation indicating and proving contributions and deductions; and
• a certificate indicating the past year’s full earnings and contributions.

Discrimination, harassment & family leave

What is the position in relation to:

Protected categories

(a) Age?

Age is a protected category; employees cannot be discriminated against due to their age.

(b) Race

Race is a protected category; employees cannot be discriminated against due to their race.

(c) Disability?

Disability is a protected category; employees cannot be discriminated against as a result of any disability.

(d) Gender?

Gender is a protected category; employees cannot be discriminated against due to their gender.

(e) Sexual orientation?

Sexual orientation is a protected category; employees cannot be discriminated against due to their sexual orientation.

(f) Religion?

Religion is a protected category; employees cannot be discriminated against due to their religion.

(g) Medical?

There is no provision explicitly covering medial conditions, however, there is no valid reason for termination for medical reasons, unless the employee is absent from work due to illness or incapacity for more than 15 months.

(h) Other?

Employees cannot be discriminated against due to their ethnicity or language.

Family and medical leave

What is the position in relation to family and medical leave?

Sick leave The permitted number of sick days and whether they are paid or unpaid is a contractual matter. If there is no provision within the employment contract to the contrary, sick pay is paid by the Social Insurance Department for any period of three days or longer in which an employee is unable to work.

Maternity leave In addition to paid annual leave and sick leave, employees may take maternity leave for up to 18 continuous weeks or up to 22 weeks for twins. For every additional child (triplets and quadruplets) the mother is entitled to an additional four weeks’ leave. If the child is hospitalised immediately after birth due to premature delivery or a health problem, maternity leave can be extended for an additional week for every 21 days that the child was hospitalised, provided that the employee provides an original certificate from the doctor and a medical certificate from the hospital in which the child was hospitalised.

Employers are not obliged to pay any wages to employees on maternity leave. An insured, salaried or self-employed woman, as well as a woman who works abroad in the service of a Cypriot employer and is voluntarily insured, is entitled to a maternity allowance paid by the Social Insurance Fund, provided that she fulfils certain conditions regarding her contributions to the fund.

Paternity leave Pursuant to Law 117(I)/2017, new fathers are entitled to two weeks’ paternity leave, provided that they fulfill certain conditions regarding their contributions to the Social Insurance Fund. Employers are not obliged to pay any wages to employees during paternity leave. Paternity leave can be taken within a period of 16 weeks from the date of birth. Employees on paternity leave are paid by the Social Insurance Fund.

Parental leave Any employee who has completed six months or more of continuous employment with the same employer can claim unpaid parental leave for up to 18 weeks following childbirth or adoption.

Parental leave is limited to:

• between one and five weeks’ maximum per calendar year for one or two children;
• seven weeks’ maximum for three children; and
• more than seven weeks provided that the employer consents to the extension.

Force majeure An employee is entitled to seven days’ leave per year without pay on the grounds of force majeure. Force majeure covers urgent family matters, including the sickness of or an accident to a dependant member of the employee’s family (eg, child, spouse, sister, grandfather or grandmother), where the employee’s presence is indispensable.

Harassment

What is the position in relation to harassment?

Any form of harassment is considered to be prohibited discriminatory conduct.

Whistleblowing

What is the position in relation to whistleblowing?

There is no specific legislation protecting whistleblowers and there is no government institution assigned to receive and investigate disclosures.

Indirectly, whistleblowers are protected by:

• their constitutional right to freedom of expression and right of access to courts; and
• the Termination of Employment Law, which provides that an employer cannot terminate an employment agreement due to an employee filing a complaint or commencing proceedings against the employer.

Consequently, private sector employees who suffer retaliation as a result of whistleblowing must mainly rely on the courts to protect their rights if they are unfairly dismissed.

In relation to civil servants, there is protection from retaliation under Section 69A of the Civil Service Law 1990 (1/1990 as amended) and the Code of Ethics of Civil Servants, jointly issued by the Public Administration and Personnel Department and the Commissioner for Administration and Human Rights (Ombudsman) in October 2013, both of which require that instances of corruption must be reported to the relevant supervisors.

Finally, pursuant to Section 9 of the Civil Law Convention on Corruption (Ratification) and Supplementary Provisions Law 2004 (7(III)/2004), retaliatory measures taken by an employer or supervisor against a whistleblower are prohibited and punishable by up to six months’ imprisonment and/or a fine of up to €5,125.80. The employee is also entitled to compensation through civil litigation, in case of damage resulting from any retaliation.

Privacy in the workplace

Privacy and monitoring

What are employees’ rights with regard to privacy and monitoring?

Employees have the following rights concerning their personal data:

• the right to gain access to the personal data that the employer holds about them;
• the right of rectification – to request the correction, without undue delay, of any personal data that the employer holds about them and which is either inaccurate or incomplete;
• the right to obtain the erasure of personal data, without undue delay, provided that the personal data in question is no longer necessary in relation to the purposes for which it was collected;
• the right to restrict the employer’s processing activities or to object to the processing of their personal data; and
• the right to data portability – to request that the employer send their personal data in a structured, commonly used and machine-readable format and transmit this data to another controller.

Employee monitoring (eg, the monitoring of emails and web browser history) is permitted only when it is connected directly to the employment relationship and when it is necessary for the performance of a statutory obligation of the employee, in which case a number of principles must be followed. These principles are outlined in the Directive of the Data Protection Commissioner on the Processing of Personal Data in the Sector of Employment Relationships.

To what extent can employers regulate off-duty conduct?

Generally, employers are not permitted to regulate the off-duty conduct of employees. In exceptional circumstances, the general principles relating to the processing of personal data and privacy must be complied with, which include the following:

• lawfulness;
• fairness and transparency;
• specified, explicit and legitimate purposes;
• adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed;
• accuracy;
• storage limitation; and
• integrity and confidentiality.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

There is no legitimate reason why an employer should have access to or should monitor the social media accounts belonging to employees.

Trade secrets and restrictive covenants

Intellectual Property

Who owns IP rights created by employees during the course of their employment?

Article 11 of the Patents Law (L16(I)/1998 as amended) provides that when an invention is made in execution of a commission or an employment contract, the right to the patent for that invention will belong – in the absence of contractual provisions to the contrary – to the person having commissioned the work or the employer. However, the employee has a right to equitable remuneration taking into account:

• salary;
• the economic value of the invention; and
• any benefit derived from the invention by the employer.

In the absence of agreement between the parties, the remuneration will be determined by the court. Article 11 of the Copyright Law (L59/1976 as amended) provides that any copyright is transferred to the person or body corporate which commissioned the work or to the author’s employer, except in cases where an agreement between the parties excludes or limits such a transfer.

Restrictive covenants

What types of restrictive covenants are recognised and enforceable?

During employment, employees are restricted from:

• providing services to competitors or competing directly with their employer;
• soliciting clients, customers or suppliers; and
• acting in a manner that is prejudicial to their employer’s interests.

However, post-termination covenants of this kind are, in most instances, considered to be an unlawful restraint from exercising a lawful profession, trade or business of any kind and to this end are declared as void and unenforceable.

Under Section 27 of the Contract Law (Cap 149), any agreement which restricts the freedom to conduct a legitimate profession, trade or business is void and unenforceable, except in the following circumstances:

• A party who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, provided that the buyer or any person deriving title to the goodwill from them carries on a like business therein and provided that such limits are reasonable according to the court, with consideration being given to the nature of the business.
• Partners may, on or in anticipation of a dissolution of the partnership, agree that some or all partners will not carry on a business similar to that of the partnership within such local limits as referred to above.
• Partners may agree that some or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership.

However, Section 2 of Cap 149 provides that Cap 149 should be interpreted in accordance with the principles of legal interpretation in England and expressions used in it should be presumed to be used with the meaning attached to them under English law. In view of the above, it can be argued that the Cypriot courts may seek guidance from English case law on this issue, where it has been decided that post-termination covenants with limited duration and within very limited geographical borders may, under the circumstances, be reasonable and enforceable.

Non-compete

Are there any special rules on non-competes for particular classes of employee?

The enforcement of restrictive covenants in the field of employment law has not been tested in the Cypriot courts, but considering that the courts can take guidance from English case law, a restrictive covenant may be enforceable provided that:

• the work is of a particularly sensitive nature;
• the employee has blatantly acted unethically;
• the duration and geographical area of the prohibition is limited; and
• the employer has continued to pay the employee during the post-employment period (garden leave).

Discipline and grievance procedures

Procedures

Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

If nothing is stipulated within the contract of employment, internal discipline or grievance procedures are not required. Even without internal discipline procedures, according to case law, the dismissal of an employee should always be necessary and reasonable, and must be the employer’s last resort.

Industrial relations

Unions and layoffs

Is your country (or a particular area) known to be heavily unionised?

Cyprus has a relatively high level of trade union organisation.

The main national, multi-sectoral workers' organisations include:

• the Pan-Cyprian Federation of Labour;
• the Cyprus Workers Confederation;
• the Democratic Labour Federation of Cyprus; and
• the Pan-Cyprian Federation of Independent Trade Unions.

Other independent sectoral workers’ organisations include:

• the Pan-Cyprian Union of Public Servants;
• the Pan-Cyprian Organisation of Greek Teachers;
• the Organisation of Greek Secondary Education Teachers; and
• the Union of Banking Employees of Cyprus.

What are the rules on trade union recognition?

The right of association – including the right to form and to join trade unions – is safeguarded by Article 21 of the Constitution. This also includes the right for the workforce to decide who will represent them in the workplace, without any kind of input, interference or compulsion from or by the company owners or employers.

What are the rules on collective bargaining?

Employees are not generally entitled to be represented on the company board of directors.

The Industrial Relations Code 1977 regulates matters concerning:

• collective negotiations;
• collective agreements;
• the settlement of disputes;
• the conditions governing the calling of strikes; and
• the imposition of lockouts.

However, the code is not binding.

Negotiations between unions and employers' associations culminate in collective agreements that determine the terms of employment, including payment levels and increases. These agreements are usually renewed every two years.

Termination

Notice

Are employers required to give notice of termination?

According to the Termination of Employment Law, the statutory minimum notice varies from one to eight weeks, according to the employee’s period of continuous employment. A dismissal without notice or payment in lieu of notice can take place only in the following circumstances:

• The employee’s conduct indicates that the relationship between the employer and employee cannot reasonably be expected to continue under the circumstances.
• The employee has committed a serious disciplinary or criminal offence.
• The employee has behaved indecently.
• The employee has repeatedly violated or ignored employment rules.

Redundancies

What are the rules that govern redundancy procedures?

Under Section 18 of the Termination of Employment Law, the following constitute grounds for dismissal due to redundancy:

• the employer has ceased to carry on the business that employs the employee;
• the employer has ceased to carry on the business at the place in which the employee was employed; or
• any of the following grounds relating to the operation of the business:
  • modernisation, automation or any other change in the methods of production or organisation which reduces the number of required employees;
  • changes in the products, production methods or necessary expertise of the employees;
  • the abolition of departments;
  • difficulties in placing products on the market or regarding credit;
  • the lack of orders or raw materials;
  • a shortage of means of production; or
  • a reduction of the volume of work or the business itself.

A written notice of termination must be given to the employee, which outlines that the employee has been terminated for redundancy reasons and includes a notice period. Immediate termination is possible only if the employer pays the relevant wages in lieu of notice.

The statutory minimum notice period varies from between one and eight weeks, according to the employee’s period of continuous employment.

Pursuant to Section 21 of the Termination of Employment Law, the employer must notify the Ministry of Labour, Welfare and Social Insurance of any foreseeable redundancy at least one month in advance of the foreseen date of termination, and must include the following information:

• the number of potential redundant employees;
• the affected sector of the business;
• the professions and, where possible, the names and family obligations of the affected employees; and
• the grounds for the redundancy.

If an employee is made redundant, they will receive payment from the state-administered Redundancy Fund to which all employers contribute, according to their length of service, provided that they have completed at least 104 weeks’ continuous employment with their employer.

Are there particular rules for collective redundancies/mass layoffs?

Employers that intend to proceed with collective dismissals must consult in good time with worker representatives to reach an agreement. The employer must notify the Ministry of Labour and Social Security in writing of any intended collective redundancies as soon as possible. Any intended collective redundancies which have been notified to the ministry will be valid after 30 days following notification.

Protections

What protections do employees have on dismissal?

Employees are generally protected from dismissal for any reason that is not a legally justified ground for dismissal.

It is a criminal offence to dismiss a pregnant employee from the time of being presented with a doctor's certificate of pregnancy up to three months after the end of maternity leave.

It is also illegal to dismiss an employee on leave due to an incapacity, unless certain conditions are satisfied.

Further, an employer cannot dismiss an employee based on their:

• race;
• gender;
• religious beliefs;
• nationality; or
• social origin.

A dismissed employee can bring a claim for damages for unlawful or wrongful dismissal at the Industrial Disputes Tribunal, which has exclusive jurisdiction to determine matters arising from the contract of employment and termination. Alternatively, an employee has the right to file a claim for breach of contract at the district courts, if their claim exceeds the equivalent amount of two years' salary (which is the maximum amount of compensation that can be ordered by the Industrial Dispute Tribunal).

In addition, an illegally dismissed employee is entitled to payment in lieu of notice, which is calculated on the basis of the scale mentioned above.

Depending on the circumstances, an employee may also claim general damages for breach of contract or loss of career prospects and any special damages suffered as a result of the termination.

In cases of unlawful termination of employment and provided that the employer’s total workforce exceeds 19 persons, the courts can order the employer to re-employ the employee. However, this discretionary power is rarely exercised.

Courts/tribunals

Jurisdiction and procedure

Which tribunals or courts have jurisdiction to hear complaints?

The Industrial Disputes Tribunal has exclusive jurisdiction to hear and decide on disputes arising from the application of the law relating to the termination of employment. However, employees have the right to apply to a district court in relation to disputes concerning their employment where their claim is greater than the maximum amount that may be ordered by the Industrial Disputes Tribunal (two years’ salary) or for any claim arising during the first 26 weeks of employment (statutory probationary period). Recourse to one court excludes the jurisdiction of the other.

What is the procedure and typical timescale?

The limitation period for bringing employment claims before the Industrial Dispute Tribunal is 12 months from the date on which the dispute arose. If an employee was dismissed due to redundancy and applied to the Redundancy Fund for compensation, they can also file a claim before the Industrial Disputes Tribunal within nine months from the date of receipt of the notice of rejection of the claim by the Redundancy Fund. The limitation period for filing a claim with the district courts is six years from the date that the cause of action arose.

Appeals

What is the route for appeals?

Judgments made by the Industrial Disputes Tribunal are subject to appeal before the Supreme Court of Cyprus within 42 days from the date that the judgment was issued. However, the Supreme Court can decide only on points of law raised in first-instance proceedings and does not have jurisdiction to make its own findings on the facts pertaining to the dispute.

Judgments made by the district courts are also subject to appeal before the Supreme Court of Cyprus within 42 days from the date that the judgment was issued. If this is the case, the Supreme Court can reverse the first-instance judgment on both factual and legal grounds. 

Click here to view full article.