Employment 2023 Comparisons

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.

Employees must (and are entitled to) receive, within seven calendar days from commencement of employment in writing or electronically, at least the following information:

• the identities of the parties to the employment relationship;
• the place of work; where there is no fixed or main place of work, the principle that the worker is employed at various places or is free to determine his or her place of work, and the registered place of business or, where appropriate, the domicile of the employer;
• either:
1. the title, grade, nature or category of work for which the worker is employed or
2. a brief specification or description of the work;
• the date of commencement of the employment relationship;
• in the case of a fixed-term employment relationship, the end date or the expected duration thereof;
• the duration and conditions of the probationary period, if any;
• the remuneration, including the initial basic amount, any other component elements, if applicable, indicated separately, and the frequency and method of payment of the remuneration to which the worker is entitled;
• if the work pattern is entirely or mostly predictable, the length of the worker’s standard working day or week and any arrangements for overtime and its remuneration and, where applicable, any arrangements for shift changes; and
• if the work pattern is entirely or mostly unpredictable, the employer shall inform the worker of:
1. the principle that the work schedule is variable, the number of guaranteed paid hours and the remuneration for work performed in addition to those guaranteed hours;
2. the reference hours and days within which the worker may be required to work; and
3. the minimum notice period to which the worker is entitled before the start of a work assignment and, where applicable, the deadline for cancellation of the employment relationship.

Employees must also (and are entitled to) receive, within one calendar month from commencement of employment in writing or electronically, the following information:

• in the case of temporary agency workers, the identity of the user undertakings, when and as soon as known;
• the training entitlement provided by the employer, if any;
• the amount of paid leave to which the worker is entitled or, where this cannot be indicated when the information is given, the procedures for allocating and determining such leave;
• the procedure to be observed by the employer and the worker, including the formal requirements and the notice periods, where their employment relationship is terminated or, where the length of the notice periods cannot be indicated when the information is given, the method for determining such notice periods;
• any collective agreements governing the worker’s conditions of work or in the case of collective agreements concluded outside the business by special joint bodies or institutions, the name of such bodies or institutions within which the agreements were concluded; and
• where it is the responsibility of the employer, the identity of the social security institutions receiving the social contributions attached to the employment relationship and any protection relating to social security provided by the employer.

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 – employment past those 48 hours triggers a number of obligations, including reporting, but also it is at the discretion of the Minister of Labour and Social Insurance to prohibit or restrict individual businesses from doing this.

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. For example, clerical staff, which includes administrative staff, secretaries, junior staff and messengers, shall not work in excess of 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, subject to principles of general health and safety.

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 1.2 Employment Contracts. 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 came into force on 1 January 2023 a new minimum wage has been set for all employees working in the Republic of Cyprus, excluding the below categories:

• domestic workers;
• agricultural and livestock workers;
• maritime workers;
• employees that benefit from more favourable arrangements by law, contract, practice or custom;
• employees in the hotel industry covered by the Decree on Minimum Wage in the Hotel Industry of 2020; and/or
• any employee who receives training or education provided for by law, practice or custom to obtain a diploma and/or to practice a profession.

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 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.

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.

Annual Leave

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.

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 can apply to exempted from contribution to the Central Holiday Fund.

An employee is not entitled to be paid annual leave if they have worked for fewer 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.

Sick Leave

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.

Maternity Leave

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.

Paternity Leave

An employee that has a child either through natural maternity or by surrogacy or by adoption up to twelve 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 two weeks after the end of the maternity leave. 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.

Parental Leave

Employees who have completed six months or more of continuous employment with the same employer can claim parental leave for up to 18 weeks in total on the grounds of childbirth or adoption, for the purpose of caring for and bringing up the child (in case of a widower parent or single parent, the duration of parental leave may be extended to twenty-three weeks) to be taken up to the completion of the eighth year of the child’s age (with slight differences for adoptive children) and up to the eighteenth year of age of the child, in case of children with disabilities. Such leave may be obtained with a minimum of one week and a maximum of five weeks per calendar year.

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 parental allowance is in any case payable by the Social Insurance Fund, provided that the parent (a) has worked for at least twelve months during the preceding 24, (b) has completed six months of continuous employment with the same employer and (c) does not receive full pay by their employer.

Force Majeure

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 member of the employee’s family, which requires the immediate presence of the employee.

Carers’ Leave

The employee may take out unpaid carers’ leave of up to five days per year, in order to provide personal care or support to a relative or a person that resides in the same household who has the necessity of important care or support due to a serious medical reason, provided that they notify the employer in due time and by providing the relevant medical certificate substantiating the need for such leave.

Flexible Work Arrangements

Parents of children up to eight years old and carers have the right to request flexible work arrangements, such as remote work and reduced or flexible working hours, provided that they have worked continuously for the same employer for at least six months (in case of short-term fixed-term contracts, they can all be taken into account together in the calculation of six months). The employer must consider such request and reply to the employee in writing within a month. The employer may take into account both their needs and the needs of the employee and may approve the request and agree with the employee the period for which these arrangements will apply, or postpone implementation of such flexible work arrangements, or reject the request. However, before any postponement or rejection, the employer must take into account the representations of the employee and notify them in writing of the decision, justifying the grounds of postponement or rejection.

Confidentiality

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.

Non-disparagement

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:

• one who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, as long as the buyer or any person deriving title to the goodwill from them carries on a like business therein, provided that such limits appear to the court reasonable, regard being had to the nature of the business;
• partners may, upon or in anticipation of a dissolution of the partnership, agree that some or all of them will not carry on a business similar to that of the partnership within such local limits as are referred to in the preceding bullet point; and
• partners may agree that one or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership.

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 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 2.1 Non-competes.

Consent

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.

Employer Obligations

Employers are obliged to inform employees (via a privacy policy, or via internal circular or any other document) of: (a) the identity and the contact details of the employer and, where applicable, of the employer’s representative; (b) the contact details of the data protection officer, where applicable; (c) the purposes of the processing for which the personal data is intended as well as the legal basis for the processing; and (d) the recipients or categories of recipients of the personal data, if any. There are also specific rules on data transfers to third countries. In addition, the employer shall, at the time when personal data is obtained, provide the employees with the following further information necessary to ensure fair and transparent processing: (a) the period for which the personal data will be stored, or if that is not possible, the criteria used to determine that period; (b) the existence of the right to request from the employer access to and rectification or erasure of personal data or restriction of processing concerning the employee or to object to processing as well as the right to data portability; (c) the existence of the right to withdraw consent at any time, without affecting the lawfulness of processing based on consent before its withdrawal; (d) the right to lodge a complaint with a supervisory authority; (e) whether the provision of personal data is a statutory or contractual requirement, or a requirement necessary to enter into a contract, as well as whether the employee is obliged to provide the personal data and of the possible consequences of failure to provide such data; and (f) the existence of automated decision-making, including profiling, and, at least in those cases, meaningful information about the logic involved, as well as the significance and the envisaged consequences of such processing for the employee. Where the employer intends to further process the personal data for a purpose other than that for which the personal data was collected, the employer shall provide the employee prior to that further processing with information on that other purpose and with any relevant further information. It is also noted that a record of processing activities needs to be maintained in the offices.

Employee Monitoring

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 employer may install electronic surveillance systems at the workplace for legitimate purposes which the employer pursues, provided that these purposes supersede the rights, interests and fundamental freedoms of the employees;
• the means/monitoring systems that the employer chooses to install and the data collected every time must be proportionate to the objective pursued;
• the employer must choose the least interventionist means of monitoring in order to satisfy the pursued aims;
• the personal data of the employees collected during the stage of monitoring shall be used only for the purpose for which the monitoring is carried out;
• the personal data of the employees collected during the stage of monitoring shall be destroyed/deleted once the purpose for which the monitoring is carried out has been fulfilled;
• the employer must in all instances inform the employees before the monitoring begins, of the purpose, method, duration and the technical specifications of the surveillance;
• continual monitoring in the workplace must be avoided;
• secret surveillance is prohibited;
• the employer may choose to prohibit employees from using the equipment of the company/organisation for personal purposes such as sending emails or making outbound telephone calls;
• the employer must inform the employees of how they can use the equipment of the company/organisation, the electronic surveillance methods which will be used and the consequences on employees resulting from the use of such equipment for personal purposes;
• the access of the employer to the content of personal emails and personal telephone calls of the employees is prohibited; and

• the employees maintain the right to protection of their private life even in the workplace.

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 cases, such as personnel employed in “companies of foreign interests” (as these are defined under the applicable decisions of the Council of Ministers) and/or in economic sectors of priority, such as academic, R&D, software, biotechnology, pharmaceuticals etc.

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 (where the annual gross salary does not exceed EUR35,000). 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.

Employees in “companies of foreign interests” undergo a much simpler procedure that does not require any application to the Department of Labour, but only the Civil Registry and Migration Department, and the employer is entitled to employ such individuals, under certain conditions, for indefinitely renewable three-year periods. It is noted that after five years of continuous lawful residence they shall have the right to apply for a Long-Term Residence permit and, after seven years, citizenship, under certain conditions.

At least 30% of a workforce need to be Cypriot or EU/EEA/Swiss citizens - foreign labour can be up to 70%.

Family members and dependants of Cypriots or EU/EEA/Swiss citizens, who are not Cypriots or 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.

However, spouses or civil partners of more than one year, and dependents, of third country nationals that are employees in “companies of foreign interests” have immediate right to reunification - spouses or civil partners also have immediate right to work, not only reside, in these cases.

The terms and conditions of employment must be the same for all individuals, whether they are foreign or Cypriot nationals.

See 4.1 Limitations on Foreign Workers.

Mobile work is unregulated. However, our usual advice to employers is that:

• they should give at least a work phone or equivalent benefit and work laptop to employees to avert the leaking of sensitive data;
• they may partially cover electricity and internet costs, in order to assist with the employees’ increased personal costs (in order to avert the risk of the employee claiming constructive dismissal); and
• they should prepare at least a checklist of dos and don’ts to employees concerning how to secure occupational safety at home or ask employees if they want the employer to inspect their personal space to ensure occupation safety.

It would also be prudent to prepare a remote work policy and disseminate it to employees, as these may become terms of the employment relationship over time.

There is no entitlement to a sabbatical leave in Cyprus, unless provided for by individual or collective agreement or employer practice or custom. The only regulated forms of leave are annual paid leave, maternity leave, paternity leave, sick leave, parental leave, carers leave, and leave on grounds of force majeure, explained in 1.5 Other Employment Terms, and military leave, in case an employee is a reserve soldier, for military exercises.

Aside from remote work, which has picked up widely regardless of the size of the business, the other forms of “new work” that have appeared were desk sharing and four-day weeks, but these are mostly confined to larger enterprises. To this effect, we are not able yet to elaborate on new manifestations in the field of “new work”, because they have not picked up as much as remote work. Therefore, we cannot deduce more general comments or rules.

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 contractual relations. Failure to comply with said law may lead to criminal prosecution and imposition of a fine.

Cyprus law also 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 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 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.

There is a default statutory probation period for the first 26 weeks of employment - probation can be extended past six months up to a maximum of 104 weeks with the consent of both parties only in cases of directors, executives, managers and persons with alike positions. 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:

• unsatisfactory performance (excluding temporary incapacitation owing to illness, injury and childbirth);
• redundancy;
• force majeure, act of war, civil commotion or act of God;
• termination at the end of a fixed period;
• conduct rendering the employee subject to summary dismissal;
• conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue; and
• committing a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

Concerning dismissals due to redundancy, the following circumstances constitute specifically lawful 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 where the employee was employed; or
• due to any of the following grounds relating to the operation of the business: (a) modernisation, automation or any other change in the methods of production or organisation which reduces the number of required employees; (b) changes in the products or the production methods or the necessary expertise of the employees; (c) abolition of departments; (d) difficulties in placing products on the market or credit difficulties; (e) lack of orders or raw materials; (f) shortage of means of production; or (g) reduction of the volume of work or the business.

Further, an employer may never lawfully terminate the employment agreement for any of the following reasons:

• membership of trade unions or a safety committee established under the Safety at Work Law of 1988;
• activity as an employees’ representative;
• the filing in good faith of a complaint;
• reporting certain types of violations of EU and/or national law (whistle-blowing); or
• the participation in proceedings against an employer involving an alleged violation of laws or regulations, civil or criminal.

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:

• zero days for 26 continuous weeks’ employment;
• one week for 26-52 continuous weeks’ employment;
• two weeks for 52-104 continuous weeks’ employment;
• three weeks for 104-156 continuous weeks’ employment;
• five weeks for 156-208 continuous weeks’ employment;
• six weeks for 208-259 continuous weeks’ employment;
• seven weeks for 260-311 continuous weeks’ employment; and
• eight weeks for 312 continuous weeks’ employment or more.

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 due 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:

• at least ten, in undertakings which normally employ more than 20 and fewer than 100 employees;
• at least 10% of the number of employees in undertakings that normally employ at least 100 and fewer than 300 employees; and
• at least 30, in undertakings that normally employ at least 300 employees.

The consultations should, at least, cover the following:

• ways and means of avoiding collective redundancies or reducing the number of employees to be affected and of mitigating the consequences of collective redundancies; and
• the employer must supply, in good time, the employees’ representatives with all relevant information to enable them to make proposals during the consultations. The employer has to give in writing, inter alia, the following information: (a) the reasons for the planned redundancies; (b) names and occupations of employees to be made redundant; (c) names and categories of employees normally employed by the employer; (d) the period over which the redundancies are to be effected; (e) the criteria to be used for selecting the employees to be made redundant; and (f) the method of calculating any redundancy payments to the affected employees.

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:

• two weeks’ wages for each year of service up to four years;
• two-and-a-half weeks’ wages for each year of service from five to ten years;
• three weeks’ wages for each year of service from 11 to 15 years;
• three-and-a-half weeks’ wages for each year of service from 16 to 20 years; and
• four weeks’ wages for each year of service beyond 20 years.

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.

Notice

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:

• zero days for 26 continuous weeks’ employment;
• one week for 26-52 continuous weeks’ employment;
• two weeks for 52-104 continuous weeks’ employment;
• three weeks for 104-156 continuous weeks’ employment;
• five weeks for 156-208 continuous weeks’ employment;
• six weeks for 208-259 continuous weeks’ employment;
• seven weeks for 260-311 continuous weeks’ employment; and
• eight weeks for 312 continuous weeks’ employment or more.

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:

• zero days for 26 continuous weeks’ employment;
• one week for 26-52 continuous weeks’ employment;
• two weeks for 52-260 continuous weeks’ employment; and
• three weeks for 260 continuous weeks’ employment or more.

Severance

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:

• two weeks’ wages for each year of service up to four years;
• two-and-a-half weeks’ wages for each year of service from five to ten years;
• three weeks’ wages for each year of service from 11 to 15 years;
• three-and-a-half weeks’ wages for each year of service from 16 to 20 years; and
• four weeks’ wages for each year of service beyond 20 years.

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:

• unsatisfactory performance (excluding temporary incapacitation owing to illness, injury and childbirth);
• redundancy;
• force majeure, act of war, civil commotion or act of God;
• termination at the end of a fixed period;
• conduct rendering the employee subject to summary dismissal;
• conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue; and
• committing a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

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:

• conduct rendering the employee subject to summary dismissal (which may be connected to committing theft, fraud, damage to company property, serious breach of health and safety regulations, violence, discrimination or harassment against another employee);
• conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue; and
• committing a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

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, formalities or specific statutory requirements, but it is a matter of negotiation between the parties to the employment relationship.

No other limitations are applicable.

Maternity

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 said period, the employer is not allowed to give any notice of termination or proceed with other actions aiming at the final dismissal of 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).

Paternity

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.

Sickness Leave

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:

• 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, committing a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

Whistle-Blowers

The Protection of Persons Who Report Violations of Union and National Law Law of 2022 (L. 6(I)/2022) 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

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).

Protected categories include both private and public sector employees.

Other

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:

• compensatory damages;
• any special damages suffered because of the discrimination;
• reinstatement/re-employment; and
• attorney’s fees.

See also 7.2 Notice Periods/Severance on minimum damages and 8.1 Wrongful Dismissal 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.

There is no possibility of court proceedings via video in employment disputes. The digitalisation in employment disputes has been confined to the submission of pleadings and affidavits, as well as limited communications between the lawyers and the court or the court registry, under the new electronic justice platform.

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.

As of 1 July 2023, a third-instance jurisdiction has been added to the Cypriot judicial system – ie, Industrial Disputes Tribunal or District Court at first instance (as explained above) and Court of Appeals at second instance, with the Supreme Court at third instance.

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.