The Industrial Disputes Tribunal recently issued a decision regarding a person working for the Cyprus Tourism Organisation (CTO) under a series of fixed-term contracts, some of which were referred to as contracts of employment and others as contracts for services.(1) The tribunal ruled that, even when working under an alleged contract for services, the applicant was a CTO employee working under a genuine contract of employment.
In December 2006 the applicant began working for the CTO under a fixed-term contract of service. After the contract expired, the applicant continued working for the CTO under a series of fixed-term contracts, some of which were referred to as contracts of employment and others as contracts for services.
In December 2010, when the last contract expired, the CTO refused to renew it, claiming that the applicant was on a fixed-term contract and that it was under no legal obligation to continue her employment. According to the CTO, the applicant worked under a contract of service for 829 days and under a contract for service for 82 days. Thus, the applicant was not employed for a continuous period longer than 30 months and therefore her contract was not transformed into a contract of indefinite duration under the Fixed-Term Work Employees (Prohibition of Discriminatory Treatment) Law (93(I)/2003).
The applicant brought a claim before the Industrial Disputes Tribunal, arguing that for the duration of her employment with the CTO she was working under a genuine contract of employment; therefore, her contract was automatically transformed into a contract of indefinite duration from the date on which she completed 30 months of employment. Consequently, the CTO's refusal to continue her employment constituted an illegal termination of her contract and she was entitled to:
- compensation for unlawful dismissal;
- compensation for loss of income; and
- reinstatement to her position.
After highlighting the basic principle governing the employer-employee relationship, according to which the relationship is determined by law, rather than by a label chosen by the parties (Cleanthis Christofides Ltd v The Fund for Redundant Employees and Yiannakis Florides ((1978) 1 Α.Α.Δ 208)), the tribunal examined the facts of the case and concluded that, for the duration of her employment with the CTO, the applicant was working under a genuine contract of employment. In reaching this conclusion, the tribunal considered, among other things, the following facts:
- The applicant performed her duties from the CTO's premises.
- The CTO provided the applicant with the necessary tools and equipment to perform her duties.
- The applicant was under an obligation to offer her services personally.
- The applicant was placed into a specific department of the CTO and received orders from the head of that department.
- The applicant worked the same hours as the rest of the CTO's employees and was unable to choose her own working hours.
- The applicant received a fixed annual salary, deposited to her in 12 monthly instalments.
The tribunal concluded that the applicant had been a CTO employee for a period longer than 30 months (from December 2006 to December 2012) and, as a result, her fixed-term contract was automatically transformed into a contract of indefinite time. Therefore, the non-renewal of her contract constituted unlawful termination of her employment and she was entitled to receive relevant compensation.
However, the tribunal rejected all other claims made by the applicant, especially her claim for reinstatement. According to the tribunal, the Fixed-Term Work Employees (Prohibition of Discriminatory Treatment) Law does not provide employees with such a right. The only remedy provided by the law is the conversion of a fixed-term contract into a contract of indefinite duration. In addition, a reinstatement order could not be justified by the Termination of Employment Law (24/1967) because, under the law, such an order is justified only in exceptional cases when the termination of employment is proven to have occurred illegally and in bad faith.
The case is important for two reasons. First, it underlines the rule that, when determining a person's employment status, the courts will not simply accept the label given to the employment relationship by the parties, but will examine the facts and circumstances of each individual case. Second, it confirms that the Fixed-Term Work Employees (Prohibition of Discriminatory Treatment) Law does not allow the issuing of a reinstatement order, only the conversion of the fixed-term contract into a contract of indefinite duration. This means that employees with a fixed-term contract who ceased working due to the illegal non-renewal of their contract cannot hope to return to work, only to receive compensation for their unlawful dismissal.
For further information on this topic please contact Nicos Panayiotou at George Z Georgiou & Associates LLC by telephone (+357 22 763 340) or email ([email protected]). The George Z Georgiou & Associates LLC website can be accessed at www.gzg.com.cy.
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