Contributed By Chrysostomides Advocates & Legal Consultants
We note that one of the main changes made over the past year was the harmonisation of the legal framework on whistle-blower protection with the relevant EU Directive 2019/1937, by virtue of the Protection of Persons Who Report Violations of Union and National Law Law of 2022 (L. 6(I)/2022). Please see 7.5 Protected Employees.
Further, maternity leave has been increased in case of a second child onwards. Please see 2.5 Other Terms of Employment.
Even further, there are currently ongoing negotiations between the social partners for the establishment of a national minimum wage – at present, there is a statutory minimum wage only for specific professions.
In addition, there is a legislative initiative, at the moment, at an EU Commission level, for the introduction of a harmonised legislative framework on remote work.
There is no statutory distinction between blue-collar and white-collar workers.
The only distinction is between employed and self-employed individuals for social security purposes.
Fixed-term employees and part-time employees have a legal framework to prevent abuse vis-à-vis indefinite-term employees and full-time employees, respectively, but do not constitute separate statuses.
Employers have a statutory obligation to provide their employees with specific information about their terms of employment within one month from the commencement of the employment, provided that the employment exceeds one month. The information may be given in any of the following ways: (a) in a contract of employment; (b) in a letter of appointment, or (c) in any other document signed by the employer which contains at least all the information detailed below:
The only distinction between written contracts for fixed-term and indefinite-term employees is that fixed-term contracts need to also state the anticipated duration.
Otherwise, the legal framework for fixed-term contracts does not mandate any additional terms in writing, but it is intended to prevent abuse and discrimination. For example, where successive fixed-term contracts exceed 30 months of continuous employment, the employee may then be assumed to be an indefinite-term employee, unless certain objective circumstances apply, as provided by law.
Working hours legislation provides that the number of weekly working hours should not exceed 48, including overtime, over a four-month reference period. However, there are special provisions for certain professions, in particular staff in the retail sector, the tourist sector and mining, as well as clerical staff. Concerning clerical staff, which includes administrative staff, secretaries, junior staff and messengers, their working time shall not exceed 44 hours per week in total or eight hours per day, which in either case does not include mealtime, by ministerial decree.
Employees are also 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.
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 (certain derogations are allowed).
Managing executives or persons with autonomous decision-making powers, family staff, and employees in religious institutions are exempted from limitations on working hours, provided general health and safety principles are followed.
Flexible arrangements are possible, provided working hours restrictions are followed.
There are no specific overtime regulations, and overtime is usually regulated by individual or collective agreement (with few exceptions regulated by law, such as the retail sector), provided that the working hours ceiling is followed.
Finally, there are no specific additional terms that need to be mentioned in a part-time contract, over and above those mentioned in 2.2 Contractual Relationship. However, the legal framework for part-time contracts is intended to prevent abuse by guaranteeing certain minimum rights, such as the number of statutory leave days and right of access to collective employee representation.
In general, apart from the minimum standards of protection set out below, salaries are not regulated by law and can be negotiated by the employer and the employees (or their representatives) through individual or collective agreements.
By decree of the Council of Ministers, which will come into force on the 1 January 2023 a new minimum wage is set for all employees working in the Republic of Cyprus, excluding the below categories:
In the case of seasonal workers under 18 years of age, whose duration of work does not exceed two consecutive months, the minimum wage may be reduced by 25%. Further, the minimum wage of employees whose food is covered by the employer may be reduced by 15% and when accommodation is covered by further 10%. The employee nevertheless retains the right to terminate such an arrangement by providing a 45 days’ notice to the employer.
The new minimum wage for a full-time employment is set at EUR885 per month, which increases to EUR940 after six months of continuous employment with the same employer.
Currently, and before the new Decree on Minimum Wage of 2022 comes into effect in January 2023, there are certain occupations for which minimum wage is set by a decree of the Council of Ministers of 2012. Those occupations are:
Currently, employees in the categories above are entitled to at least EUR870 per month, which increases to EUR924 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 was revised to an hourly rate of EUR4.90, and upon completion of a six-month period of employment at the same employer is increased to EUR5.20. The hourly rate of pay for newly recruited cleaners is EUR4.55, and upon completing six months of employment at the same employer is increased to EUR4.84.
The decree of the Council of Ministers of 2012 will be repealed on 1 January 2023 when the new decree of 2022 will come into effect.
There is also an additional decree concerning minimum wages for different job positions within hotels. Depending on the job position, these vary between EUR870 and EUR1,070 per month and/ or between EUR5.28 and EUR6.32 per hour.
Overtime pay is not generally regulated by law in Cyprus and it is usually regulated by individual or collective agreement. There are a few exceptions regulated by law, such as the retail sector and sections of the hospitality industry.
There is also no general regulatory requirement or limitations for executive compensation in Cyprus. It is possible, however, in the financial industry that contracts of executives may be subject to approval by the Central Bank of Cyprus or the Cyprus Securities and Exchange Commission, depending on the type of financial institution.
The minimum holiday entitlement per year is 20 working days for employees working five days a week and 24 working days for employees working six days a week, provided that the employee has already worked for at least 48 weeks within the year, which shall be paid through the Central Holiday Fund to which each employer contributes 8%.
When employers opt to pay the annual leave directly to the employees and provide more beneficial terms than the law – ie, at least 21 or 25 days respectively – they are exempted from contribution to the Central Holiday Fund.
An employee is not entitled to be paid annual leave if they have worked for less than 13 weeks in the year. If the employee has worked for a period more than 13 weeks then they are entitled to the pro rata amount of holiday. The annual leave may be accumulated, for two years, only if this is agreed between the employer and the employee. The above are only the statutory minimums, and the parties are free to agree to more generous terms for the employee.
The number of sick leave days, and whether this will be paid or unpaid by the employer, is a contractual matter. If there is no different provision within the contract of employment (or collective agreement), a sickness allowance is in any case payable by the Social Insurance Fund for any period of more than three days in which an employee is unable to work. The weekly entitlement is 60% of the weekly average of basic insurable earnings within the previous year and is increased by one-third for the employee’s first dependant (including a spouse, whether or not in employment) and one-sixth for each child or another dependant. The maximum number of days for which sick pay is payable is 156 days for every period of interrupted employment. This can be extended for a further period of 156 days during the same period of interrupted employment, provided that the insured is eligible to receive an incapacity pension but is not expected to remain permanently incapacitated from working.
Apart from paid annual leave and sick leave, employees may also take maternity leave up to 18 continuous weeks (in the case this is the mother’s second child, 22 weeks; in the case this is the third child onwards, 26 weeks). Female employees who are about to adopt a child under the age of 12 years are entitled to 16 continuous weeks (in the case this is the mother’s second child, 20 weeks; in the case this is the third child onwards, 24 weeks) starting immediately from the date on which they begin to have the care of the adopted child(ren). In addition to maternity leave, for nine months after childbirth, a female employee is entitled to take one hour off for breastfeeding or for the increased needs of child-raising. In accordance with the law, that time must be considered and paid as normal working time.
Whether the above is paid or unpaid by the employer is a contractual matter. If there is no different provision within the contract of employment (or collective agreement), a maternity allowance is in any case payable by the Social Insurance Fund.
An employee, the spouse of whom has given birth or got a child by surrogacy or jointly adopted with the spouse a child under 12 years old, has a right to paternity leave of two continuous weeks at a time during the period that starts from the week of the childbirth or adoption and ends after 16 weeks. During the paternity leave, the employee is entitled to a paternity allowance from the Social Insurance Fund.
Whether the above is paid or unpaid by the employer is a contractual matter. If there is no different provision within the contract of employment (or collective agreement), a paternity allowance is in any case payable by the Social Insurance Fund.
Employees who have completed six months or more of continuous employment with the same employer can claim unpaid parental leave for up to 18 weeks in total on the grounds of childbirth or adoption. In the case of natural parents, parental leave may be taken after the end of the maternity leave and before the eighth birthday of the child. In the case of adoption, leave may be taken within eight years from the date of adoption of the child, provided that the child has not reached 12 years of age.
Parental leave has a one-week minimum and five-week maximum per calendar year for one or two children, and a seven-week maximum for three children and more. With the employer’s consent, the maximum leave may exceed those limits. Provisions that are more favourable to the employee than the provisions of the law may be applied through collective agreement or by agreement between the employer and the employee.
The employee is entitled to seven days’ leave per year without pay on the grounds of force majeure. These grounds must be related to urgent family reasons in the case of sickness or accident to a dependent member of the employee’s family (child, spouse, sister, grandfather, grandmother), which makes the employee’s presence indispensable.
There is an implicit duty of confidentiality on employees which arises from common law and can be further regulated by contract. The duty of confidentiality may implicitly and contractually extend beyond the term of the employment relationship, unless the disclosed information has come to the public domain by other means and without the input or fault or unlawful action of the employee. Employers can pursue their rights and claim damages through civil action for breach of confidence.
Statutory trade secrets law also protects employers against the unlawful obtainment, use and disclosure of trade secrets (including against employees), unless use of this information takes place within the rights to expression and information (including respect to freedom of mass media), in case of offence or tortious behaviour or illegal activity by the employer (provided that the employee acted in protection of general public interest), or where mandated in the course of lawful exercise of duties according to EU or Cyprus law (where disclosure was necessary for the exercise of such duties), or where the disclosure happened in protection of recognised lawful interests under EU or Cyprus law.
There is no explicit duty of non-disparagement, but this may be regulated contractually, as well as dealt with through defamation/libel actions.
Under Cypriot law, employees owe an implied duty of loyalty and fidelity to their employer. Employees should offer their services in a trustworthy and faithful manner. This means that, during employment, employees are restrained from providing services to competitors or competing directly with their employer, from soliciting clients/customers and/or suppliers and from acting in a manner that is prejudicial to their employer’s interests.
With regard to post-termination restrictions on competition, the position under Cyprus law is the following:
Under Section 27 of the Cypriot Contracts Law – Cap 149 (“Cap 149”), any agreement which restricts the freedom to conduct a legitimate profession, trade or business is void. The exceptions are the following:
Given the above, post-termination restrictive covenants of this kind in employment contracts are, in most instances, considered to be an unlawful restraint from exercising a lawful profession, trade or business of any kind, and to that extent they are declared void and unenforceable.
Case law in Cyprus is relatively scarce to this effect, and we cannot fully evaluate how a Cypriot court would assess the said circumstances about post-termination non-competition covenants. However, Section 2 of Cap 149, as amended, provides that Cap 149 should be interpreted in accordance with the principles of legal interpretation in England, and expressions used in it shall be presumed to be used with the meaning attached to them in English law. In view of the above, the Cypriot courts may be guided by English case law on this issue.
There were instances where English courts ruled that, in the circumstances, post-termination restrictive covenants with limited duration and within very limited geographical borders were reasonable and enforceable. Therefore, it may be assumed that a Cypriot court could possibly rule such a clause enforceable in some instances, but the limitations have to appear reasonable under the circumstances. In examining the reasonableness of a restrictive covenant, the court will take into consideration all the circumstances of the specific case, particularly the geographical area, duration, level of importance of the position of the employee and access to information, and type of restriction.
Concerning independent consideration, we note that for any agreement to constitute a contract, lawful consideration is necessary. Such consideration may consist either of some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other. If the restrictive covenant is a clause in the employment contract, anything that forms the consideration for the entire contract may also be a consideration for the restrictive covenant. If, however, the restrictive covenant is a separate agreement, this will also require consideration, but the employment itself usually constitutes the consideration for such restrictions.
See 3.1 Non-competition Clauses.
Processing of personal data of the employee by an employer is allowed without consent, provided that the processing is necessary for the performance of the employment contract or in order to take steps at the request of the employee prior to entering into the contract and/or provided that processing is necessary for compliance with legal obligations to which the employer is subject.
Special Categories of Personal Data
Special categories of personal data (sensitive data) may also be processed, where processing is necessary for the purposes of carrying out the obligations and exercising specific rights of the employer or of the employee in the field of employment and social security and social protection law in so far as it is authorised by domestic law or collective agreement pursuant to domestic law providing for appropriate safeguards for the fundamental rights and the interests of the employee.
Concerning any employee monitoring, such as monitoring of faxes and emails, web browser history, recording of inbound and outbound calls (frequency, duration, time), CCTV and GPS monitoring, the Cyprus Commissioner for Personal Data Protection issued a Directive on the Processing of Personal Data in the Sector of Employment Relationships. In particular, the below principles must be followed in instances of surveillance and monitoring of employees:
The employers must maintain the balance between this right and the degree to which the surveillance systems interfere with the private life of employees.
Finally, the protection of data and privacy of employees is also safeguarded by Article 15 of the Constitution (right to respect for private and family life), Article 17 of the Constitution (right to respect for and to secrecy of correspondence and other communication if such other communication is made through means not prohibited by law) and all international instruments to which Cyprus is a party that guarantee the right to privacy, such as the European Convention on Human Rights, the EU Charter of Fundamental Rights and pertinent ILO Conventions, as well as ECJ/CJEU and ECtHR jurisprudence.
The maximum period of stay for all third-country nationals for the purposes of employment is four years, except for the livestock farming and agricultural sectors, where the maximum period has been set to six years. This limitation does not apply in certain exceptional cases, such as highly skilled personnel employed in companies with a significant turnover and/or in economic sectors of priority, athletes, coaches, researchers et al.
EU/EEA/Swiss nationals may work in the Republic of Cyprus, provided that they comply with a relatively simple and straightforward registration procedure, without any further restrictions. However, non-EU/EEA/Swiss nationals are required to obtain a residence permit with right to work, prior to any employment in Cyprus.
The main precondition for the granting of a permit for employment of third-country workers is the inability of the employer to satisfy the needs of its business with local workers (Cypriot or EU/EEA/Swiss nationals). This inability will be ascertained following a “labour market test” conducted by the competent Department of Labour of the Ministry of Labour, Welfare and Social Insurance (where the annual gross salary exceeds EUR35,000, no such test is required). The applications for the permit of the non-EU/EEA/Swiss national will be submitted to the District Labour Offices, which will have to confirm that the criteria for employment of foreigners are being met. Moreover, the interested employer is required to publish the available position via the employment services of District Labour Offices. If there are no Cypriot or EU/EEA/Swiss citizens available and capable of filling the specific positions, the employer submits a special application form for employment of foreign workers. Once the application is approved and the employment contract stamped, application is then made for the issuance of the pertinent residence permit to the Civil Registry and Migration Department.
Family members and dependants of EU/EEA/Swiss citizens, who are not EU/EEA/Swiss citizens themselves, generally enjoy the same rights, but in order to work, they need a residence permit with right to work. Third-country nationals who reside legally within the areas controlled by the government of the Republic for at least two years, who are holders of a residence permit valid for at least one year, and who have reasonable prospects of obtaining the right of permanent residence, can apply for family reunification.
The terms and conditions of employment must be the same for all individuals, whether they are foreign or Cypriot nationals.
As stated in 5.1 Limitations on the Use of Foreign Workers, EU/EEA/Swiss nationals may work in the Republic of Cyprus provided that they comply with a relatively simple and straightforward registration procedure, without any further restrictions. However, third-country nationals are required to obtain a residence permit with right to work prior to any employment in Cyprus.
Article 21 of the Constitution of the Republic of Cyprus protects the right of association, including specifically the right to establish and join a trade union.
Cyprus has a relatively high level of trade union organisation. The main national, multi-sectoral workers’ organisations are the Pancyprian Federation of Labour (PEO), the Cyprus Workers Confederation (SEK), the Democratic Labour Federation of Cyprus (DEOK) and the Pancyprian Federation of Independent Trade Unions (POAS).
Other independent sectoral workers’ organisations are the Pancyprian Union of Public Servants (PASYDY), the Pancyprian Organisation of Greek Teachers (POED), the Organisation of Greek Secondary Education Teachers (OELMEK) and the Union of Banking Employees of Cyprus (ETYK).
Trade unions have the right to possess property under their legally registered name, to contract, to appear before courts either as plaintiff or as defendant, and also to proceed with all necessary actions to accomplish their purposes. However, to enjoy these rights, a trade union has to be legally registered as such.
Union elections take place in accordance with their articles of association and relevant rules.
Where a registered trade union wishes to be recognised by the employer for the purposes of negotiating the conclusion of a collective agreement, but the employer refuses to recognise it, the trade union may apply, under certain conditions, to the Registrar of Trade Unions for issuance of an order of recognition, forcing the employer to recognise it as the lawful representative of the employees for the said purposes.
In cases of undertakings employing at least 30 employees, a company has a general obligation to inform the employees and/or their representatives and consult them by exchanging views and establishing a dialogue between the employees and/or employee representatives and the employer. In particular, such information and consultation shall cover: (a) information on the recent and probable development of the undertaking’s or the establishment’s activities and economic situation; (b) information and consultation on the situation, structure and probable development of employment within the undertaking or establishment and on any anticipatory measures envisaged, in particular where there is a threat to employment; and (c) information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations. Failure to comply with the said law may lead to criminal prosecution and imposition of a fine.
Cyprus law provides for the establishment of European Works Councils for the purpose of safeguarding and improving employees’ rights to information and consultation in EU-scale undertakings and EU-scale groups of undertakings. However, at the time of writing, there are no active European Works Councils in Cyprus.
See 6.1 Status/Role of Unions.
In relation to collective bargaining agreements (CBAs), there is no general legislative framework regulating the manner in which they are conducted nor is there a minimum of terms that need to be contained therein (other than, of course, minimum statutory obligations). CBAs constitute one of the main policy instruments in Cyprus used to shape labour policy and, as a matter of practice, the negotiations are conducted in a tripartite manner between employers’ organisations, the Ministry of Labour, Welfare and Social Insurance, and the trade unions. We note that CBAs in Cyprus do not have erga omnes effect nor are they legally binding; therefore, non-compliance per se may not be the subject of a judicial process, even though the provisions of applicable CBAs in any given case, together with any other existing practices concerning terms and conditions of employment, are taken into consideration by Cyprus courts as evidence of such terms and conditions. CBAs are only subject to the provisions of the 1977 Industrial Relations Code, a not legally enforceable “gentlemen’s agreement” between the main employers’ associations and trade unions, which lays down the procedures to be followed for the settlement of employment disputes, arbitration, mediation and public inquiry in disagreements over interests and rights. However, given the high level of unionisation in Cyprus and the possibility of strike action, employers, as a matter of practice, have almost always voluntarily adhered to both the Industrial Relations Code and CBAs.
There is a default statutory probation period for the first 26 weeks of employment, but it may be extended up to a maximum of 104 weeks with the consent of both parties. Throughout the duration of the probationary period, the statutory provisions relating to notice and protection from termination of employment do not apply, and the employee may be dismissed for any reason and without notice, save where more favourable provisions for the employee are stipulated within the contract of employment.
After the lapse of the probationary period, employees are protected from dismissals. More specifically, a dismissal that cannot be justified under any one of the grounds below is considered unlawful per se:
Concerning dismissals due to redundancy, the following circumstances constitute specifically lawful grounds for dismissal due to redundancy:
Further, an employer may never lawfully terminate the employment agreement for any of the following reasons:
There is a rebuttable presumption that any dismissal is unlawful until the employer proves the contrary on the balance of probabilities.
Further, an employer must always give to the employee a written notice of termination, outlining the grounds for dismissal, with the applicable notice period or pay in lieu of notice.
The notice period is calculated on a graduated scale, according to length of prior service, as follows:
However, where the grounds of termination are either conduct rendering the employee subject to summary dismissal, or conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, or committing a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules, no notice period is applicable and the employee may be terminated with immediate effect.
In addition, in cases of foreseeable dismissals due to redundancy, the employer is obliged to notify the Minister of Labour and Social Insurance at least one month in advance before the anticipated date of termination, including the number of possible 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 of redundancy. The notice is given by the filing of an official template form (Form YKA 608) with the Social Insurance Services.
Employers who intend to proceed with a collective dismissal due to redundancy are additionally obliged to consult in good time with the workers’ representatives to reach an agreement. The employer shall notify the Minister of Labour and Social Insurance in writing of any intended collective redundancies as soon as possible. Any intended collective redundancies which have been notified to the Minister of Labour and Social Insurance shall be valid only after the expiry of the period of 30 days accruing from the day of the provision of such a notification.
For purposes of collective redundancy legislation, the term “collective redundancies” means redundancies made by an employer for one or more reasons not connected with the employees, provided that the number of employees dismissed within a period of 30 days is:
The consultations should, at least, cover the following:
If the termination due to redundancy is genuine, then the employee(s) will receive payment from the state-administered Redundancy Fund to which all employers contribute, according to their length of service, as mentioned above, provided that the employee(s) has/have completed 104 weeks’ continuous employment with the same employer. In particular, the redundancy pay is calculated as follows:
The Minister of Labour and Social Insurance imposes a maximum compensation per week by decree.
If an employee is simultaneously entitled to payment out of the Redundancy Fund and payment from the employer by reason of custom, law, collective agreement, contract or otherwise, the employee is paid the whole amount from the Redundancy Fund, and from the employer any difference between the two payments, if the whole amount of payment from the employer is higher than the amount received from the Fund.
In the event that the application for payment from the Redundancy Fund is rejected because the grounds for redundancy were deemed not genuine, the employee has the right to take action against the Fund, as well as against the employer in the alternative, for unfair dismissal and to seek damages.
Finally, concerning internal and appeal procedures, there is no obligation for the employer to follow internal disciplinary rules in the private sector (unless the employment contract provides otherwise). However, disciplinary procedures are required regarding employees of governmental and semi-governmental bodies or organisations. Nevertheless, even without internal disciplinary procedures, according to case law, dismissal of an employee should always be necessary and reasonable, and must be treated as an employer’s "last resort”. Given this, before dismissing an employee, the employer should bring to the employee’s attention any complaints regarding their efficiency or unsatisfactory conduct or behaviour and the employer should warn the employee accordingly to give them the chance to express their views and improve.
The minimum statutory notice which the employer has to give to the employee varies according to the employee’s period of continuous employment as follows:
A dismissal without notice or payment in lieu of notice can take place only when: (a) the employee’s conduct indicates that the relationship between employer and employee cannot reasonably be expected to continue under the circumstances; (b) the employee committed a serious disciplinary or criminal offence; (c) the employee behaved indecently; or (d) the employee repeatedly violated or ignored employment rules.
An employee who intends to resign should give the employer a minimum period of notice depending on the period of prior service as follows:
Minimum statutory compensation for unlawful dismissal payable by the employer depends upon the period of continuous employment and is calculated in the same way as the compensation for redundancy, as follows:
The Industrial Disputes Tribunal will also take into account, at its discretion, the wages and earnings of the employee, length of service, loss of career, circumstances of the termination of employment and the age of the employee.
It is noted that the compensation to which the employee is entitled cannot exceed the equivalent of two years’ wages and is payable by the employer in so far as it does not exceed the employee’s annual wages and from the Redundancy Fund to the extent that such compensation exceeds the employee’s annual wages. The employer is thus exposed to the payment of damages up to a maximum of one year’s wages.
As also stated above, the employee is not entitled to any compensation from the employer when the dismissal takes place for any of the following reasons:
Of course, it is possible for the employer to still pay severance at its discretion or if pre-agreed contractually.
There is no precise definition of “serious cause”, but the following serious causes constitute lawful grounds of dismissal without notice and without compensation, as outlined earlier:
Only a letter of termination outlining the circumstances/facts that led to this decision to terminate is required to be given to the employee.
However, prior disciplinary procedures or otherwise giving the employee the opportunity to respond would constitute best practice and would be looked at favourably by the court, in the case of a labour dispute.
Under Cypriot law, it is permissible to obtain releases in connection with termination agreements, but case law suggests that the right to bring a claim can be waived only if such a waiver is clear and unequivocal. In addition, consideration would be necessary for a termination agreement to be valid and enforceable per se.
There are no specific procedures or formalities or specific statutory requirements, but it is a matter of negotiation between the parties to the employment relationship.
No other limitations are applicable.
In the case of maternity, there is an express protection from dismissal ranging from the start of the pregnancy until five months after the end of the maternity leave. During the said period, the employer is not allowed to give any notice of termination or proceed with other actions aiming at the final dismissal of the said employee, unless she is guilty of serious misconduct or the business has closed down or the contractual period of employment has ended (apart from instances where non-renewal of the contract relates to the pregnancy, childbirth or maternity).
In the case of paternity, there is a statutory protection from termination of employment or granting notice of termination during the period commencing from the date of written notice by the employee of the intention to exercise the right to paternity leave and expiring at the end of the paternity leave (except in cases of serious offence/misconduct or behaviour which warrants the termination of the employment relationship, or where the undertaking concerned ceased operations, or termination of a fixed-term contract).
Parental Leave or Leave on Grounds of Force Majeure
There is a statutory protection from dismissal in case of parental leave or leave on grounds of force majeure, except if the employee is guilty of a serious offence or misconduct, or the undertaking has ceased operations, or the employment contract duration has expired.
In the case of an employee being absent from work on sick leave due to incapacity, during the period of absence plus one-quarter of that period upon return (but up to a maximum of 12 months’ absence plus one-quarter, ie, 15 months), they may be served a notice of termination only on the following grounds:
The new law mentioned in 1.1 Main Changes in the Past Year requires all private legal entities with 50 or more employees and all public sector legal entities (except local authorities with fewer than 5,000 inhabitants or fewer than 25 employees) to establish reporting channels and procedures for internal reporting and for monitoring. The protection explicitly covers reports on infringements within the scope of EU law, including public procurement, financial services, products and markets and the prevention of money laundering and terrorist financing, product safety and compliance, transport security, environmental protection, radiation protection and nuclear safety, food and feed safety, health and animal welfare, public health, consumer protection, privacy and protection of personal data and security of network and information systems, infringements affecting the economic interests of the EU, and internal market-related infringements. The same law provides prohibition of any form of retaliation, criminal sanctions, and a number of causes of action. There is a transitional period for compliance of private sector entities with 50–249 employees up to 17 December 2023.
In addition to the new legislation, whistle-blowers are also protected by their constitutional right to freedom of expression and right of access to courts. Of course, as also noted earlier, there is an exhaustive list of lawful grounds of dismissal, and dismissal on any other grounds is considered unlawful per se.
Anti-discrimination legislation provides for certain protected characteristics, which include gender, community, language, colour, religion, political or other beliefs, age, sexual orientation, nationality, racial or ethnic origin, and disability (please see 8.2 Anti-discrimination Issues).
Protected categories include both private and public sector employees.
Any dismissal premised on (a) trade union membership, (b) membership of a safety committee under the Safety at Work legislation, or (c) submission of a complaint or participation in proceedings against an employer because the latter is involved in alleged violation of laws or regulations, or (d) recourse to a competent administrative authority, is considered unlawful per se.
The most common remedy available for unlawful dismissal is a claim for damages. 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 its termination. Minimum statutory compensation for unlawful dismissal payable by the employer depends upon the period of continuous employment and is calculated in the same way as the compensation for redundancy (see 7.2 Notice Periods/Severance). The maximum amount of compensation the Industrial Disputes Tribunal is entitled to award is two years of the claimant’s salary.
Depending on the circumstances of the case, the Tribunal may award any amount between the minimum (which is the amount that is calculated in the same way as the compensation for redundancy) and the maximum (two years’ wages). Before deciding, the Tribunal considers an employee’s age, family situation, (loss of) career prospects and all the circumstances of termination. In the case when the maximum amount is awarded, any payment in excess of one year’s wages is payable to the employee by the state-administered Redundancy Fund and not by the employer.
Alternatively, an employee has the right to file a claim for breach of contract at the District Courts, if the 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).
Also, an employee who was illegally dismissed is entitled to payment in lieu of notice, if notice had not been given, which is calculated on the basis of the scale mentioned in 7.2 Notice Periods/Severance.
In cases of unlawful dismissal, and provided that the employer’s total staff exceeds 19 persons, the court is further empowered to order the employer to redeploy the employee. However, this discretionary power is very rarely exercised.
Cyprus has a multitude of anti-discrimination laws dealing with different forms of discrimination in different sectors; there is no single comprehensive equality statute. Law 42(I)/2004 and Law 58(I)/2004, which have some overlapping provisions, prohibit any direct or indirect discriminatory treatment or conduct, provision, term, criteria or practice in both private and public sector activities on grounds of race, community, language, colour, disability, religion, political or other beliefs, national or ethnic origin, or sexual orientation, including in relation to (a) access to employment, self-employment and work, including selection criteria and appointment terms, regardless of sector of activity at all levels of the professional hierarchy, including promotions, (b) access to all kinds and levels of professional orientation, training, education and re-orientation, including obtaining practical professional experience, (c) conditions and terms of employment, including provisions on dismissals and remuneration, (d) capacity of a member and participation in an employees’ or employers’ organisation or any organisation the members of which exercise a particular profession including advantages granted by such organisations, and (e) social protection, social security and healthcare.
Law 177(I)/2002 and Law 205(I)/2002 prohibit discrimination in the public and private sectors on the basis of gender, including in relation to terms and conditions of remuneration for the same work or work of equal value, ensure equal criteria for men and women, conditions of employment or access to employment or criteria, further protection of maternity, protection from harassment, and ensure active participation and representation. The preceding laws also have certain exceptions pertaining to residency requirements of third-country nationals and stateless persons or objectively justified discrimination on certain grounds of religion or age, and affirmative action. They also include pertinent administrative sanctions, criminal sanctions on perpetrators, enforcement mechanisms and whistle-blower protection.
We note additional anti-discrimination laws pertaining to discriminatory treatment of fixed-term employees vis-à-vis employees of indefinite duration, full-time vis-à-vis part-time employees, persons with disabilities, as well as Law 3/1968 ratifying the International Labour Organisation Convention No. 111 concerning Discrimination in Respect of Employment and Occupation of 1958.
In relation to potential claims, it is noted that a prima facie discrimination claim shifts the burden of proof onto the employer.
In the event of discrimination being found, employees are entitled to claim:
See also 7.2 Notice Periods/Severance on minimum damages and 8.1 Wrongful Dismissal Claims on said claims.
Employees may pursue administrative proceedings before the Ombudsman, who may impose a fine where they identify discrimination on the grounds of gender, religion or beliefs, age, sexual orientation, or racial or ethnic origin.
According to the provisions of the various statutes protecting employees from direct or indirect discrimination, discriminatory behaviour may also constitute a serious criminal offence punishable with imprisonment and/or a fine.
The Industrial Disputes Tribunal has exclusive jurisdiction to hear and decide any disputes arising from the application of the law relating to the termination of employment. However, the employee has the right to apply to a District Court in relation to a dispute concerning their employment where the 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.
There are only two levels of instances in the Cypriot judicial system – ie, Industrial Disputes Tribunal or District Court at first instance (as explained above) and Appeals Court/Supreme Court at second instance. Pending legislation provides for introduction of a third-instance jurisdiction.
There is no provision for class or collective action within the employment statutes and regulations. However, the Civil Procedure Rules provide that where several persons have the same interest in one cause or matter, one or more of them may be authorised by the court to pursue or defend an action on behalf or for the benefit of all interested persons.
So far, employment claims are filed on an individual basis, and it has not been tested yet whether class or collective actions will be allowed by the relevant provision contained in the Civil Procedure Rules.
In the case of a private dispute between employer and employee that relates to termination of employment, annual paid leave, protection of maternity, independent claims arising from the employment contract and similar claims, the Industrial Disputes Tribunal has exclusive jurisdiction (with the exception of District Court jurisdiction on dismissals where claims exceed two years’ wages), so agreement for arbitration on these matters is unenforceable.
In the case of a dispute between employer and trade union(s), under the Industrial Relations Code, non-binding mediation by the Department of Labour Relations is possible, but the parties’ rights to apply to the court may be reserved. Binding arbitration is also possible where employer and union(s) agree that the arbitrator’s decision will be binding.
The general rule is that orders as to litigation costs will usually burden the unsuccessful party to the action. Nevertheless, in practice, in the case of the Industrial Disputes Tribunal specifically, there is a possibility that if the application is rejected, the applicant may be burdened only with their own fees and the employer may still be required to pay its own fees.