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Download the GuideEnding an employment contract in Cyprus is regulated by the Termination of Employment Law (Law 24 of 1967), which outlines the rights and obligations of both employers and employees. The law covers dismissals, resignations, notice periods, and compensation.
Dismissal must follow legal procedures and include fair notice. The minimum notice period ranges from 1 to 8 weeks, depending on the employee's length of service. In cases of redundancy, additional compensation is required. The Termination of Employment Law (Law 24 of 1967) governs dismissals. Employees who believe they have been unfairly dismissed can file a claim with the Labour Disputes Court.
The termination of employment in Cyprus must follow specific legal procedures to ensure that both the employer and employee are protected. This includes providing appropriate notice periods, settling final payments, and ensuring compliance with laws governing dismissal, redundancy, or resignation.
Employers and employees are both required to give notice before terminating an employment contract, unless the termination is for gross misconduct. Employers must provide written notice based on the employee's length of service (as per the Termination of Employment Law). Employees must also give the same notice when resigning. The notice periods range from 1 week to 8 weeks, depending on the duration of employment.
If the employer or employee wishes to end the contract without respecting the notice period, they must pay compensation in lieu of notice, which is equivalent to the salary that would have been earned during the notice period.
The required notice period depends on the employee's length of service:
Length of service | Required notice |
---|---|
Up to 6 months | 1 week |
6 months to 1 year | 2 weeks |
1 to 2 years | 4 weeks |
2 to 5 years | 5 weeks |
5 to 10 years | 6 weeks |
10+ years | 8 weeks |
Employers are required to settle all financial obligations, including unpaid wages, accrued leave, and any overtime. Upon termination, employees must receive compensation for any unused annual leave. This must be calculated based on the employee’s current wage and paid as part of the final settlement.
Employers must clearly state the reason for termination. Termination can occur for reasons such as redundancy, poor performance, or misconduct. In cases of gross misconduct, dismissal without notice may be allowed.
Employers are advised to document all reasons and procedures followed during the termination process to protect against future claims.
In cases of lawful dismissal, employees may still be entitled to severance pay depending on the reason for termination and the length of employment. Severance pay is typically required for dismissals due to redundancy. The compensation amount is calculated based on years of service and the employee’s salary. The Termination of Employment Law outlines the conditions under which severance pay is provided, particularly in cases of redundancy.
Failure to follow the correct termination procedure can result in legal claims from the employee. This could lead to compensation claims for unpaid wages, accrued leave, or even damages for wrongful termination. Employers could face fines or sanctions from the Labour Disputes Court for failing to provide appropriate notice or final payments.
Unfair dismissal occurs when an employee is terminated without valid reason or in violation of Cypriot labour laws. Dismissals based on discriminatory reasons (e.g., gender, race, religion), or those made without following legal procedures, are considered unfair. Employees have protection against wrongful terminations and can seek compensation if dismissed unfairly.
Employers can dismiss employees for valid reasons, including poor performance, misconduct, or redundancy. However, if an employee is dismissed without proper cause or due process, it may be challenged as unfair.
Dismissals based on factors such as gender, race, age, religion, or political beliefs are prohibited by law. Employers must ensure they are compliant with equal opportunity and non-discrimination laws.
Employees can file a complaint with the Labour Disputes Court. The court will assess whether the dismissal was justified or whether it violated employment laws. If found to be unfair, the employee may be entitled to reinstatement or financial compensation.
Employers found guilty of unfair dismissal can face substantial penalties, including the obligation to pay compensation, which may cover lost wages and other damages. The Labour Disputes Court may also order the reinstatement of the employee in some cases, depending on the severity of the breach. Additionally, employers may suffer reputational damage.
Other guidelines around the end of employment in Cyprus include procedures for redundancy, severance pay, and settlement of disputes. These rules ensure that employees are fairly treated when their employment ends and that employers meet all legal obligations.
If an employee is terminated due to redundancy, they are entitled to redundancy compensation if they have worked for the employer for at least two years. This compensation is paid from the Redundancy Fund. Employers must provide a valid reason for the redundancy and give appropriate notice.
Employees dismissed due to redundancy may also be entitled to severance pay based on their length of service. The amount is calculated according to the law and is processed through the Redundancy Fund. Employers who fail to comply with redundancy, severance, or leave compensation rules can face legal actions. The Labour Disputes Court may order employers to pay back wages, compensation for unused leave, or severance payments. Non-compliance may also result in fines or sanctions from labour authorities.
Employees on fixed-term contracts are protected from successive renewals that bypass job security protections. If a fixed-term contract is renewed more than twice, it may be considered a permanent contract, ensuring job security and the same rights as permanent employees. The Fixed-Term Work Law (Law 98(I)/2003) regulates the use of fixed-term contracts, preventing abuse of short-term contracts.
In cases of disagreement over termination, employees may seek resolution through the Department of Labour or take their case to the Labour Disputes Court. The court can mediate disputes over pay, notice periods, or unfair dismissal.
Employees on fixed-term contracts cannot be arbitrarily denied contract renewal without justification, particularly if the nature of the job implies continuity. Employers must provide reasonable notice and reasons for not renewing fixed-term contracts. If an employee's contract is not renewed without a valid reason, the employee may be entitled to compensation. The Fixed-Term Work Law ensures fair treatment for employees whose contracts are not renewed without sufficient cause.
Employees who have been unfairly dismissed may be entitled to either reinstatement or financial compensation. If the court determines the dismissal was unfair, the employee may be reinstated to their former position or awarded compensation for lost wages and benefits. The Labour Disputes Court handles such cases, and compensation is determined based on the severity of the employer's breach and the employee's losses.
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