Dismissing employees in Cyprus
Consider these issues when terminating an employee in Cyprus.
Individual Dismissals in Cyprus
, Sarah Forster
George Z Georgiou & Associates LLC
1st Floor, 1 Eras Street
T +357 22 76 33 40
F +357 22 76 33 43
1. GENERAL PROTECTION
In Cyprus, protection is afforded to all employees (both white and blue collar workers) who are less than 65 years of age, or those who have not retired as a result of custom, law or collective agreement, regardless of the size of the undertaking in which they work.
The general protection against dismissals comes from the Termination of Employment Law 24/67, as amended. In addition, Law 28(I)/2001 provides protection against collective dismissals.
There are a number of other legislative measures affording more specialised protection against discrimination, including equal pay and maternity protection.
Qualifying employees are protected against unfair dismissal. The burden of proof is on the employer to show that the dismissal was fair.
2. SPECIAL CONSIDERATIONS
Article 28 of the Cypriot Constitution contains a general anti-discrimination provision that corresponds to Article 14 of the European Convention on Human Rights. In addition, Cyprus has ratified most international conventions on human rights which include anti-discrimination provisions.
Therefore, an employer may never terminate employment on the grounds of race, colour, sex, marital status, religion, political opinion, national extraction or social origin.
The age at which a child is deemed to be an adult is 18 years of age. The employment of children (under 15 years of age) is prohibited except for the purposes of, and only with the relevant licence from the Minister of Labour & Social Insurance: vocational or occupational training of a child who has attained the age of 14; and cultural, artistic, sports or advertising activities. Restricted hours of work and further protections are afforded to all young adults and children under the age of 18.
The private sector does not have a mandatory retirement age and age can be agreed by the parties, or according to the custom and practice of the organisation. However, it should be noted that retirees (statutory retirement age is 65) do not have recourse to the employment courts for disputes.
2.3 Length of service and fixed-term contracts
An employee must have completed a minimum six-month ‘trial period’ in order to be protected against dismissal.
All individuals who are employed for more than six months (i.e. who have completed a trial period) by the same employer are protected and have the right not to be unfairly dismissed. This trial period can be extended for up to two years, but only with the written agreement of the parties at the time of hiring.
2.4 Part-time work and career breaks
Employees who work on a part-time basis or employees who are on a career break approved by the employer, are afforded the same protection as full-time employees.
However, there is no obligation on the employer to accept flexible working hours for any employee and therefore it is at the employer’s discretion. The only exception is under Article 5 of Maternity Law 100(I)/97.
2.5 Pregnancy and child care
An employed pregnant woman is entitled to maternity leave for 18 consecutive weeks. An employed woman who has adopted a child under the age of 12 is entitled to 16 weeks of maternity leave.
An employed parent (either male or female) is entitled to take unpaid parental leave of a total duration of up to 13 weeks for the purpose of taking care of and participating in the raising of a child.
An employer may never terminate employment on the grounds of an employee being pregnant or on maternity or parental leave.
An employee has a right under the law to take leave on the grounds of force majeure for urgent family reasons involving a child, spouse, sibling, parent or grandparent. The leave is a maximum of seven days unpaid per annum.
Nurses and carers working in retirement homes, for example, are treated as normal employees.
2.7 Employee representatives
An employer may never terminate employment on the grounds that an employee is a member of a trade union or a safety committee established under the Safety at Work Law 1988; or that he or she is an employee representative.
Collective dismissal protection applies only where a certain number of employees are going to be dismissed within a period of 30 days. The dismissals must not be for reasons relating to the employees’ conduct. The threshold also depends on the size of the organisation:
Number of employees to be dismissed within
a period of 30 days
Size of the organisation
10 or more employees
Between 20 and 100 employees
10% or more of all employees
Between 100 and 300 employees
30 or more employees
More than 300 employees
An employer may not terminate employment on the grounds that the employee has filed a complaint in good faith, or is participating in proceedings, against the employer which involve alleged violations of laws or regulations either criminal or civil.
Article 7 of Law 24/67 states that when an employee resigns from his or her employment because of the employer’s conduct, the termination is considered to be a constructive dismissal.
In such a case, the employee must prove that he or she resigned lawfully, but the resignation was caused by reasons relating to the employer’s conduct. The burden of proof then reverts to the employer to show that the dismissal was lawful.
Constructive dismissal reasons can include a substantial change in the terms and conditions of employment, including a reduction in salary, harassment, abusive behaviour, and unsuitable working conditions.
4. AVOIDING UNFAIR DISMISSAL
4.1 Grounds for dismissal
Article 5 of Law 24/67 provides a list of reasons under which an employee whose employment has been terminated is not entitled to compensation. It is therefore a list of valid grounds for dismissal. They are as follows:
• when the employee fails to perform his or her work in a reasonably competent manner
• when the employee is made redundant
• for reasons of force majeure, not brought about by the negligence or
wilful action of the employer
• when the employment is terminated on the expiry of a fixed-term contract,
or upon retirement age (note that the tribunal will consider a series of fixed-term contracts for the same employee as forming a contract of unspecified duration)
• for reasons of gross misconduct that permit the employer to terminate without notice.
No permissions are required for individual dismissals.
The employer is required to give the employee:
• written notice of dismissal, stating the reasons for dismissal
• a certificate stating the dates of employment and the duties of the employee
during the course of employment
• a notice period (see section 4.5 below), which can be extended but not
reduced, and can be paid in lieu
• payment of any outstanding salary, the proportion of annual leave that the
employee has accrued and any other benefits, if applicable.
Note that collective agreements may impose further obligations on the employer.
4.4 Notification/consultation obligations
Individual dismissals do not require any specific notifications or consultations.
A specific procedure must be followed for collective dismissals before the dismissals can take place. This includes notifying the Ministry of Labour and Social Insurance of the proposed dismissals/redundancies and entering into a consultation procedure.
4.5 Duration of notice period
Article 9(1) of Law 24/67 provides the following notice periods, depending upon the employee’s length of service:
The employer’s notice of dismissal
Length of service (weeks)
4.6 Treatment during notice period
During a notice period given by the
take alternative employment at any point. The employee is also entitled to take paid leave of up to eight hours a week, but not more than 40 hours in total, to seek new employment.
4.7 Payment in lieu of notice
The employer has the right to demand a payment in lieu of notice, for which the sum paid is equivalent to the applicable notice period, but there is no obligation for any severance or dismissal indemnity.
Private settlement agreements between the employer and the employee can be concluded provided that such agreements do not violate the minimum amounts set by the law.
Any provision in a contract or agreement providing for the reduction of the length of the statutory notice period is void ab initio, although the parties have the right to extend the notice period by contract, collective agreement or for any reason established by law, custom or otherwise.
5. CIRCUMSTANCES IN WHICH DISMISSAL WITHOUT NOTICE IS PERMITTED
The employer may dismiss an employee without notice for reasons of gross misconduct, i.e. misconduct that seriously undermines the purpose of the contract. Some examples include:
• behaviour that makes clear that the employee/employer relationship cannot continue
• a serious misdemeanour by the employee during the course of the employment
• the committing of a criminal offence by the employee during the course of his or her employment, without the employer’s consent
• inappropriate behaviour
• serious or repeated breaches of work regulations.
It should be noted that if the employer does not exercise its right to dismiss within a reasonable timeframe, the right is considered to have been waived.
6. SANCTIONS AND ENFORCEMENT
6.1 Sanctions for unlawful dismissal
Usually, compensation is awarded comprising a basic award (equivalent to a statutory redundancy payment and calculated in the same way) and a compensatory award. The tribunal has absolute discretion as to the award to be given as compensation. In calculating the award, the tribunal must take into consideration, amongst other things, the employee’s:
• wage and all other earnings
• length of service
• possible loss of future career
• circumstances surrounding the dismissal
The upper limit on the total award of damages that can be granted by the tribunal is two years’ wages. The award cannot go lower than the statutory minimum for redundancy. It should be noted that if an employee wishes to claim compensation in excess of two years’ wages, he or she must file a civil action for wrongful dismissal in the District Court, as the tribunal has no jurisdiction.
6.2 Void dismissals
Where more than 19 persons are employed and a dismissal has taken place and has been held either to be flagrantly unlawful or unlawful and done in bad faith, then the tribunal may under the circumstances and, if the employee has requested it, order the reinstatement of the employee. It can grant compensation for the harm suffered as a result of the dismissal, the amount of which must not exceed one year’s wages.
This is the only legal provision that makes a dismissal void.
See section 6.2 above.
7. WAIVER OF RIGHT TO SUE
The right to bring a claim is statutory and recent case law suggests that it can only be waived by an express personal agreement. However, even in the absence of an express agreement, if the minimum compensation is given by the employer to the dismissed employee, the tribunal will take this into account and is unlikely to continue trying the case, unless there is evidence to justify granting additional damages.