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Notice periods in Cyprus

Termination of employment in Cyprus

Post-termination restraints in Cyprus

Waivers in Cyprus

Transfer of undertakings in Cyprus

Avoid risk and missed opportunities with our end-to-end employment solutions

End of employment in Cyprus

The end of an employment relationship is a significant event for both employers and employees, and in Cyprus, there are clear rules to ensure fairness for all parties involved. Whether you’re considering ending an employment contract or navigating the process, it’s important to understand the legal framework that governs these situations.

In this section, we’ll explore the various ways employment can end in Cyprus, including termination by mutual agreement, with notice, or without notice. We’ll also discuss constructive dismissal, the enforceability of waivers, permissible post-termination restraints, and the implications of transfers of undertakings. By the end of this guide, you’ll have a clearer understanding of the processes and protections in place regarding the end of employment in Cyprus.

Notice periods in Cyprus

Employers and employees are required to provide at least a certain amount of notice to the other party if they want to terminate their employment relationship. In Cyprus, this is governed by the Termination of Employment Law (Law 24/1967). Read on for more information about notice periods in Cyprus for both employers and employees.

Notice periods in Cyprus for employers

Notice periods for employers in Cyprus, depending on the employee’s length of service, are as follows:

26–51 weeks of service: one week’s notice.
52–103 weeks of service: two weeks’ notice.
104–155 weeks of service: four weeks’ notice.
156–207 weeks of service: five weeks’ notice.
208– 259 weeks of service: six weeks’ notice.
260–311 weeks of service: seven weeks’ notice.
312 or more weeks of service: eight weeks’ notice.

Employers may opt to pay an employee for the appropriate number of weeks based on their length of employment instead of giving them notice. Longer notice periods may be required by collective bargaining agreements, individual employment contracts, or company policies.

Notice periods in Cyprus for employees

Employees intending to resign must also provide notice based on their length of service:

26–51 weeks of service: one week’s notice.
52–259 weeks of service: two weeks’ notice.
260 or more weeks of service: four weeks’ notice.

In some cases, longer notice periods may be stipulated by collective agreements or employment contracts or implied due to the customs of the organisation.

Probationary periods in Cyprus

Probationary periods are permitted and common in Cyprus. The statutory probationary period in Cyprus is 26 weeks (six months). However, this can be extended up to a maximum of 104 weeks (two years) for employees in certain roles, including directors, executives, and managers. During the probationary periods, either the employer or the employee can terminate the contract without giving notice to the other party.

Severance pay in Cyprus

Severance pay is required in Cyprus under certain conditions. For example, employees who are dismissed due to redundancy are entitled to severance pay from the state-administered Redundancy Fund, provided they have completed at least 104 weeks (two years) of continuous employment with the same employer. Redundancy pay is calculated based on the employee’s length of service, as follows:

Up to 4 years: 2 weeks’ wages for each year of service.
4–10 years: 2.5 weeks’ wages per year.
10–15 years: 3 weeks’ wages per year.
15–20 years: 3.5 weeks’ wages per year.
20–25 years: 4 weeks’ wages per year.

In other circumstances, employers in Cyprus are not normally required to pay severance pay unless this is stipulated in a collective agreement, employment contract, or company policy. Employees may be able to claim compensation for unfair dismissal if the Labour Disputes Court finds that the employer’s reason for termination was invalid.

Other requirements related to notice periods in Cyprus

Notice must be given to the other party in writing. Employees who have been given notice are entitled to paid leave of up to eight hours per week, up to a maximum of 40 hours in total, to search for a new position. If they find a new position after being given notice by their employer, they can end their employment before the end of the notice period. However, this means forfeiting the right to payment for the remainder of the notice period.

Termination of employment in Cyprus

Every country has specific rules that apply to the end of the employment relationship, which are designed to protect employees from unfair dismissal. In Cyprus, employment termination is governed by the Termination of Employment Law (Law 24/1967). Read on for everything you need to know about the different forms of termination of employment in Cyprus.

Termination by mutual agreement in Cyprus

Employment contracts in Cyprus can be terminated at any time through mutual agreement between the employer and employee. This process typically involves both parties signing a written agreement that outlines the terms of separation, which may include:

The effective date of termination.
Any severance or final payments.

While not legally mandated, documenting the mutual termination in writing is advisable to prevent future disputes.

Termination with notice in Cyprus

Under normal circumstances, employers in Cyprus must give notice to terminate an employment relationship. Any termination must also be justified by specific reasons recognised by the Termination of Employment Law. These include:

Failure to satisfactorily perform work duties.
Redundancy (e.g. due to business closure, restructuring, or technical changes).
Acts of God (force majeure).
Conclusion of a fixed-term contract.
Reaching retirement age.

Failure to provide valid grounds or to adhere to proper procedures can result in claims of unfair dismissal, potentially leading to compensation awards by the Labour Disputes Court.

Constructive dismissal in Cyprus

Constructive dismissal happens when an employee resigns because their employer has seriously breached the employment contract — for example, by changing key terms of the job, not paying wages, or creating a hostile work environment. In such cases, the law treats the resignation as if the employer had dismissed the employee. The employee may be entitled to compensation but must prove that the employer’s actions made it impossible to continue working.

Redundancy in Cyprus

Redundancy occurs when an employee’s position becomes obsolete due to factors like business closure, restructuring, or technological changes. Employees with at least 104 weeks of continuous service are entitled to redundancy payments from the Redundancy Fund, administered by the Ministry of Labour. The amount is calculated based on the employee’s length of service and final wages.

Termination without notice in Cyprus

Immediate termination without notice is permissible under Cypriot law if the employee engages in serious misconduct. Grounds for such dismissal include:

Gross misconduct during duty.
Commission of a criminal offence without the employer’s consent.
Immoral behaviour in the course of duties.
Serious or repeated violation of work regulations.

In these cases, the employer is not obligated to provide notice or severance pay. However, the burden of proof lies with the employer to justify the immediate dismissal.

Unfair dismissal in Cyprus

If an employee in Cyprus believes they have been unfairly dismissed, they can file a complaint with the Labour Disputes Court within 12 months of the date of the dismissal. If the court finds that the dismissal was indeed unjustified, it may award compensation up to a maximum of two years’ wages, considering factors such as the employee’s age, length of service, and the circumstances surrounding the termination.

Post-termination restraints in Cyprus

Post-termination restraints are restrictions that employers can impose on their former employees’ actions after the end of the employment relationship. They are sometimes referred to as restrictive covenants or post-termination restrictions. In Cyprus, these are subject to serious restrictions — read on for what you need to know as an employer.

Enforceability of post-termination restraints in Cyprus

Under Cypriot law, any agreement that restricts freedom to conduct a legitimate business, trade, or profession is void, apart from three specific exceptions:

Sale of business goodwill: If someone sells the goodwill (i.e. intangible assets like reputation, brand recognition, customer relationships, and employee loyalty) of their business, they can agree not to start a similar business within a certain area, as long as the buyer continues to operate a similar business there. The area and duration of this restriction must be reasonable.
Dissolution of partnerships: When a partnership ends, the partners can agree that some or all of them will not start a similar business within a specific area. Again, the terms must be reasonable in scope and duration.
During an ongoing partnership: Partners can agree that they will not engage in any other business activities outside the partnership while it continues.

Outside of these situations, post-termination restraints like non-compete clauses in employment contracts are typically unenforceable in Cyprus. In practice, restrictions like non-compete clauses, employee non-solicit agreements, and customer non-solicit agreements are sometimes included in employment contracts for their potential deterrent effect.

Waivers in Cyprus

In Cyprus, employees may waive certain employment claims as part of a settlement agreement, typically in the context of ending the employment relationship. However, such waivers must be clear, reasonable, and supported by adequate consideration — for example, a severance payment above statutory entitlements. The waiver should be in writing and outline exactly which claims or rights are being relinquished.

Importantly, employees cannot waive statutory employment rights provided under Cypriot law. These include rights such as minimum notice periods, protection against unfair dismissal, and redundancy pay. Any agreement that attempts to override these protections is likely to be deemed unenforceable. While not a legal requirement, it is advisable for employees to seek independent legal advice before signing a settlement agreement to ensure they fully understand the implications.

Transfer of undertakings in Cyprus

When a business unit is transferred from one entity to another, the employees of the transferred company have certain rights under Cypriot law. Read on to find out what you need to know about transfers of undertakings in Cyprus.

What is counted as a transfer of undertakings in Cyprus?

In Cyprus, a transfer of undertaking is when an economic entity is transferred and retains its identity. This means that an organised grouping of resources, with the objective of pursuing an economic activity, is transferred from one employer to another and continues its operations. Examples include mergers, acquisitions, or the sale of a business unit.

Employee rights after a transfer of undertakings in Cyprus

When a transfer of undertaking takes place in Cyprus, employees’ contracts and employment relationships transfer automatically to the new employer (transferee). The transferee must also maintain the same terms and conditions of employment, including those outlined in any collective agreements, for at least one year or until the agreement expires or is replaced.

In addition, statutory pension rights under the Social Insurance legislation are preserved. However, rights under supplementary company or inter-company pension schemes do not automatically transfer.

Dismissing employees after a transfer of undertakings in Cyprus

The transfer itself cannot constitute valid grounds for dismissal. However, dismissals may occur for economic, technical, or organisational reasons requiring workforce changes.

Employer information and consulting obligations related to transfers of undertakings in Cyprus

Both the transferor and transferee are required to inform and consult with employees or their representatives in good time before the transfer. They must provide information on:

The proposed date of transfer.
The reasons for the transfer.
The legal, economic, and social implications for employees.
Any measures envisaged in relation to the employees.

Can employees object to a transfer of undertakings in Cyprus?

Employees in Cyprus do not have the right to object to a transfer of undertaking. If an employee chooses not to continue employment with the transferee, they may resign. However, if the transfer results in substantial changes to working conditions to the employee’s detriment, and the employee resigns as a result, this may be considered a dismissal by the employer, entitling the employee to compensation.

Avoid risk and missed opportunities with our end-to-end employment solutions

There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Cyprus — or you could end up facing legal issues.

Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible

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