The Termination of Employment Law was voted by the Parliament of the Republic of Cyprus on the 27th of May 1967. It was subsequently implemented on the 1st of February 1968 and its main purpose is to regulate and determine the rights and obligations of employers and employees in matters relating to termination of employment.
The Court of Labor Disputes was founded in 1967 and has jurisdiction to hear all cases regarding Labor disputes including disputes about termination of employment. The Termination of Employment Law applies to employees of both the private and public sector, including apprentices. It also applies to shareholders of private companies provided they are employed by their own Company. Employees of the Government of the United Kingdom of Britain (e.g. Sovereign Military Bases of Akrotiri, Episkopi and Dekelia) and N.A.A.F.I are outside the scope of the this Legislation.
Article 9 of the Termination of Employment Law states that in cases where an employer intends to terminate the employment of an employee who has been employed for a continuous period of at least 26 weeks, he must give the employee notice prior to the termination of employment.
The period of notice depends on the duration of the employment. It starts from one (1) week in cases where employees have been employed for 26 up to 51 weeks and can go up to eight (8) weeks where employees have been employed for a period of more than 312 weeks. The notice must be in written form. The employer is under no obligation to give notice to an employee if his employment was on a trial basis and its duration did not exceed 104 weeks. The employer has the right, instead of giving written notice, to pay the employee’s salary for the period of the notice, e.g. one week’s salary for an employee who has been employed for a period between 26 - 51 weeks.
Article 9 (6) provides that the notice cannot be given in cases were the employee is absent from work due to maternity leave. The employer cannot give the aforementioned notice for a period of six months from the first day on which the employee took leave from work on maternity leave.
The employer is under no obligation to give notice to an employee in cases where the behavior of the employee is such, that the immediate termination of employment is justified (Article 15), i.e. commitment of serious misconduct by the employee during the exercise of his duties. On the other hand, if it is the employee who wishes to terminate his employment, then he too must give his employer a minimum period of notice that depends on the duration of the employment. The minimum period of notice is one (1) week if the duration of employment is between 26 -51 weeks, and goes up to three (3) weeks if the duration of employment is more than 260 weeks.
Article 3 of the Termination of Employment Law provides for cases where an employee can be compensated if he has been unjustly dismissed. An employee that has been working for a minimum period of 26 weeks and is subsequently unjustly or unfairly dismissed is entitled to compensation.
The amount of compensation is decided and quantified by the Court of Labor Disputes after the employee submits the appropriate application. This amount cannot be less than the minimum amount of payment recoverable for dismissal due to redundancy, and cannot be more than the sum of two years’ salary.
An employee is not entitled to compensation for unjustified dismissal if the termination of employment took place as a result of redundancy, Act of God, war, riots, extreme weather conditions etc.
Furthermore, the termination of employment of an employee is by no means considered justified if the dismissal took place due to the employee’s membership or participation in a Workers Union, or in response to an employee’s complaint against his employer.
The Court of Labor Disputes in certain cases has the power to order the re-employment of an employee (if the employee so wishes) if his employment was terminated by the employer on the basis of unfair or unlawful grounds, provided that such employer employs in his Business at least 20 persons.
The Termination of Employment Act also deals with the rights of employees in cases of termination of employment due to redundancy.
Articles 16 A, B, 17, 18 and 19 of the relevant legislation refer to redundancy. An employee is considered to be redundant if the termination of employment was due to any of the below mentioned reasons:
- If the employer stopped or intends to stop conducting a business in which the employee is employed, and/or,
- If the employer stopped or intends to stop conducting a business in the area where the employee is employed and/or,
- Due to any of the following reasons which are related with the operation of a business: i.e. modernization, mechanization or any other change in the method of production or organization that reduces the number of employees needed. Change in the products or methods of production or in the required specialization of the employee, closing down of certain departments, deficiency in sources, orders and raw materials.
The compensation received by an employee in case of redundancy depends on the period of his employment. For example, where the period of employment is between four to ten years, the amount received as payment by the employee will be two (2) weeks’ salary for every year of continuous employment. Thus, if an employee has been working in a company for a period of five continuous years and has been illegally dismissed, he will be entitled to compensation equal to the sum of two weeks’ salary multiplied by five. The amount of compensation is of course increased in cases where the employment period is greater than ten years.
Although the Court of Labor Disputes has jurisdiction to deal with all cases regarding labor disputes, an employee is also entitled to apply to the Civil District Court where the compensation and/or remedy claimed cannot be fully satisfied by the Court of Labor Disputes, as in a case, for example, where an employee claims compensation or damages for loss of career prospects or injury to reputation.
The above mentioned description provides only a general outline of the Termination of Employment Law and is by no means an exhaustive description of the rights and duties emanating from the relevant law. Specialist advice should be sought on your specific circumstances.