Cyprus: Labour and Employment Comparative Guide

Last Updated: 22 July 2019
Article by Yiannis Ch. Karamanolis
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1 Legal framework

1.1 Are there statutory sources of labour and employment law?

The main employment-related statutes are the following:

  • the Termination of Employment Law of 1967, as amended;
  • the Social Insurance Law of 1980, as amended;
  • the Annual Paid Leave Law of 1967, as amended;
  • the Protection of Maternity Law of 1997;
  • the Minimum Salaries Law, as amended;
  • the Equal Treatment at Work and Employment Law of 2004, as amended;
  • the Health and Safety at Work Law of 1996, as amended;
  • Law 100(I)/2000, providing for an employer's obligation to inform employees about the conditions applicable to their contract or employment relationship; and
  • the Collective Redundancies Law of 2001.

Furthermore, the Constitution guarantees certain fundamental rights relating to employment, such as the right to work, to strike and to equal treatment. International treaties that have been ratified by Cyprus regarding employment issues are also applicable. EU regulations and directives regarding employment and labour issues are also applicable in Cyprus since it acceded to the European Union in 2004.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

In addition to the statutes outlined in question 1.1, employment relationships in the private sector are governed by the terms of the employment contract.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Employers are obliged by statute (Law 100(I)/2000, providing for an employer's obligation to inform employees about the conditions applicable to their contract or employment relationship) to provide employees with specific information about their terms of employment within one month of commencement of employment.

This information may be given in any of the following ways:

  • a contract of employment;
  • a letter of appointment; or
  • any other document signed by the employer which contains at least all the information detailed below.

The information given by the employer must include at least the following:

  • the identity of the parties;
  • the place of work and the registered address of the business or the home address of the employer;
  • the position or specialisation of the employee, his or her grade, the nature of his or her duties and the object of his or her employment;
  • the date of commencement of the contract or the employment relationship and its anticipated duration if this is for a fixed time;
  • notice periods;
  • the duration of any annual leave to which the employee is entitled, as well as the manner in which and time at which it may be taken;
  • the time limits which must be observed by the employer and the employee in the event of termination of the employment, either by consent or unilaterally;
  • all types of emoluments to which the employee may be entitled and the schedule for their payment;
  • the usual duration of the employee's daily or weekly employment; and
  • details of any collective agreements that govern the terms and conditions of employment.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

Employees of either gender who have completed six months or more of continuous employment with the same employer can claim unpaid parental leave for up to 18 weeks in total on the grounds of childbirth or adoption. In the case of natural parents, parental leave is taken after the end of the maternity leave and before the child's eighth birthday. In the case of adoption, it is taken within eight years of the date of adoption of the child, provided that the child is still under the age of 12.

A minimum of one week's parental leave and a maximum of five weeks' parental leave may be taken per calendar year for one or two children; the maximum for three children or more is seven weeks. With the employer's consent, the maximum leave may exceed these limits. Provisions that are more favourable to the employee than the provisions of the law may be applied through collective agreement or by agreement between employer and employee.

2.2 How long does it last and what benefits are given during this time?

Please see question 2.1.

2.3 Are trade unions recognised and what rights do they have?

Cyprus has a relatively high level of trade union organisation.

The main national, multi-sectoral workers' organisations are:

  • the Pancyprian Federation of Labour;
  • the Cyprus Workers Confederation;
  • the Democratic Labour Federation of Cyprus; and
  • the Pancyprian Federation of Independent Trade Unions.

Other independent sectoral workers' organisations include:

  • the Pancyprian Union of Public Servants;
  • the Pancyprian Organisation of Greek Teachers;
  • the Organisation of Greek Secondary Education Teachers; and
  • the Union of Banking Employees of Cyprus.

According to Law 71/65, as amended, providing for trade unions, trade unions have the right:

  • to possess property under their legally registered name;
  • to contract;
  • to appear before courts as either plaintiff or defendant; and
  • to proceed with all necessary actions to accomplish their purposes.

However, to enjoy these rights, a trade union must be legally registered as such.

For purposes of harmonisation with Directive 2009/38/EC, the Parliament of Cyprus enacted Law 106(I)/2011 providing for the establishment of a European works council for the purpose of safeguarding employees' rights to information and consultation in EU-scale undertakings and EU-scale groups of undertakings. The law aims to guarantee and improve the right to information and consultation of employees in such undertakings and groups of undertakings.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

The protection of data and privacy of employees is safeguarded by the following statutes and directives:

  • Article 15 of the Constitution of the Republic of Cyprus – every person has the right to respect for his or her private and family life;
  • Article 17 of the Constitution of the Republic of Cyprus – every person has the right to respect for and to the secrecy of his or her correspondence and other communication, if such other communication is made through means not prohibited by law;
  • Processing of Personal Data (Protection of the Individual) Law of 2001 (138(I)/2001), as amended, which transposes Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data into Cyprus law;
  • Directive of the Cyprus Commissioner for Personal Data Protection on the Processing of Personal Data in the Sector of Employment Relationships; 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 European Charter of Fundamental Rights and pertinent International Labour Organization Conventions, as well as European Court of Justice and European Court of Human Rights jurisprudence.

Under Section 5(1) of the Processing of Personal Data (Protection of the Individual) Law, the processing of personal data is allowed if the data subject has given explicit consent. However, Section 5(2)(b) allows for the processing of personal data without the consent of the data subject where the processing is necessary for the performance of a contract to which the data subject is a party or for the taking of measures upon request of the data subject before conclusion of the contract.

Further, pursuant to Section 6(2)(b) of the law, the general prohibition on the collection and processing of sensitive data under Section 6(1) may be waived, among other things, where:

  • the employee has given his or her explicit consent; and
  • the processing is necessary for the purposes of carrying out the obligations or duties of the data controller in the field of employment law, insofar as the commissioner for personal data protection has given his authorisation.

Regardless of the requirement for consent, Section 7(1) obliges the data controller to notify the commissioner in writing of the establishment and operation of a filing system or of the commencement of data processing.

The most common methods of employee monitoring which give rise to obligations upon the employer under pertinent data protection legislation include:

  • monitoring employee faxes, emails and web browser history;
  • recording inbound and outbound calls (frequency, duration, time);
  • closed circuit video monitoring systems; and
  • monitoring/recording the position/movement of employees and/or work vehicles via the Global Positioning System.

In all cases employers must ensure that:

  • data is processed fairly, in accordance with the law and for specific and legitimate purposes; and
  • the data is relevant, appropriate and not excessive in relation to the purpose of the data processing.

Moreover, the Cyprus commissioner for personal data protection has issued a Directive on the Processing of Personal Data in the Sector of Employment Relationships. Under Section 14 of the directive, the following principles must be followed in instances of employee surveillance and monitoring:

  • 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 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 employees collected during the monitoring stage shall be used only for the purpose for which the monitoring is carried out.
  • The personal data of employees collected during the monitoring stage shall be destroyed or deleted once the purpose for which the monitoring is carried out has been fulfilled.
  • The employer must in all instances inform employees before the monitoring begins of the purpose, method, duration and 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 company equipment for personal purposes, such as sending emails or making outbound telephone calls.
  • The employer must inform employees of how they can use company equipment, the electronic surveillance methods which will be used and the consequences for 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 employees is prohibited.
  • Employees maintain the right to protection of their private life, even in the workplace.
  • The employer must maintain a balance between this right and the degree to which the surveillance systems interfere with the private life of employees.

2.5 Are contingent worker arrangements specifically regulated?

Employment contracts in Cyprus may be for a fixed term or indefinite. If an employee is continuously employed for more than 30 months in total, then his or her contract will be considered indefinite, unless the employer can show that such fixed-term employment can be justified on objective grounds.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

In general, salary is not regulated by law and can be negotiated by the employer and employees (or their representatives) through individual or collective agreements.

However, for certain occupations, a minimum wage is set annually by order of the Ministerial Council that comes into force on 1 April each year. The occupations covered by the minimum wage provisions are:

  • clerk;
  • shop assistant;
  • school assistant;
  • childcare worker; and
  • nursing assistant.

Employees in the above positions are entitled to €870 per month, which increases to €924 after six months of continuous employment.

Security guards and cleaners of business or corporate premises are also covered by minimum wage provisions. The minimum wage for security guards was revised to an hourly rate of €4.90; upon completing six months of employment at the same employer, this increases to €5.20. The hourly rate of pay for newly recruited cleaners is €4.55; upon completing six months of employment at the same employer, this increases to €4.84.

3.2 Is there an entitlement to payment for overtime?

Overtime pay is not regulated by law in Cyprus and is usually a matter of negotiation between employer and employees. However, in certain industries working time is regulated by specific legislation and regulations or by applicable collective agreements.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

The Annual Holidays with Pay Law (8/1967) provides that 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. This shall be paid through the Central Holiday Fund, to which each employer contributes 8%.

Where employers opt to pay annual leave directly to employees and provide more generous terms than the law – that is, at least 21 or 25 days respectively – they are exempt from contributing to the Central Holiday Fund.

An employee is not entitled to paid annual leave if he or she has worked for fewer than 13 weeks in the year. If the employee has worked for a period of between 13 weeks and 48 weeks, he or she will be entitled to holiday pro rata. Annual leave may be accumulated for two years, upon agreement between employer and employee. This is the statutory minimum and the parties are free to agree to more generous terms for employees.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

The number of days' sick leave to which an employee is entitled, and whether this is paid or unpaid, are contractual matters. Unless the employment contract provides otherwise, sick pay is paid by the Social Insurance Department for any period of three days or longer 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, 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 each 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 incapacity pension, but is not expected to remain permanently incapacitated from working.

3.5 Is there a statutory retirement age? If so, what is it?

There is no mandatory retirement age. However, according to the Termination of Employment Law, an employee is not entitled to compensation for termination of employment or redundancy if he or she reaches pensionable age (65 years) prior to the date of termination of employment.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

Discrimination in employment, including harassment at work, is illegal under various legislative statutes, including:

  • Law 3/1968 ratifying the Convention Relating to Discrimination (Occupation and Profession) of 1958;
  • the Equal Treatment at Work and Employment Law of 2004;
  • the Law on Equal Pay for the Same or Equal Work of 2002;
  • the Part-Time Employees (Prohibition of Discrimination) Law of 2002;
  • the Equal Treatment of Persons Regardless of Racial or Ethnic Origins Law of 2004;
  • the Equal Treatment of Men and Women at Work and Professional Training Law of 2002; and
  • the Persons with Disabilities Law of 2000.

The grounds of discrimination regulated by these laws include gender, community, language, colour, religion, political or other beliefs, age, sexual orientation, nationality, racial or ethnic origin, and disability.

4.2 Are there specified groups or classifications entitled to protection?

Protected categories include all private and public sector employees.

4.3 What protections are employed against discrimination in the workforce?

Apart from discrimination on the grounds referred to in question 4.1, the laws of Cyprus specifically prohibit any unequal payment on grounds of sex, the disproportionate treatment of part-time and fixed-term workers and any sexual harassment.

4.4 How is a discrimination claim processed?

Employees may enforce their rights by filing:

  • a complaint to the competent authorities and to the police authorities requesting criminal prosecution of the wrongdoer; or
  • a civil legal action before the Industrial Disputes Tribunal.

If the employee proves the existence of indications of discrimination on one of the prohibited grounds, the onus is on the employer to prove that no discrimination has occurred.

4.5 What remedies are available?

Apart from filing a complaint to the competent authorities, any employee who is discriminated against may file a claim requesting compensation for any damage sustained because of the illegal behaviour.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

The protections and remedies available against harassment and bullying are the same as those described in questions 4.3 and 4.5.

Retaliation/victimisation is also strictly prohibited under Section 10 of the Law on Equal Treatment at Work and Employment (58(I)/2004), and affected employees may also file civil claims for damages against the wrongdoers and/or complaints for their criminal prosecution.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

Yes. Dismissals that cannot be justified under any one of the grounds below are considered unlawful per se:

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

5.2 Is a minimum notice period required?

Yes. Written notice of termination must be given to the employee outlining the reasons for the dismissal and the effective date of termination.

According to the Termination of Employment Law, the statutory minimum notice period varies from one to eight weeks, according to the employee's period of continuous employment.

Dismissal without notice or payment in lieu of notice can take place only in the following circumstances:

  • The employee's conduct indicates that the relationship between the employer and employee cannot reasonably be expected to continue under the circumstances;
  • The employee has committed a serious disciplinary or criminal offence;
  • The employee has behaved indecently; or
  • The employee has repeatedly violated or ignored employment rules.

5.3 What rights do employees have when arguing unfair dismissal?

Employees are generally protected from dismissal for any reason that is not a legally justified ground for dismissal. Furthermore, it is a criminal offence to dismiss a pregnant employee from the time of presentation with a doctor's certificate of pregnancy up to five months after the end of maternity leave.

It is also illegal to dismiss an employee on leave due to an incapacity, unless certain conditions are satisfied.

Finally, an employer cannot dismiss an employee based on:

  • race;
  • gender;
  • religious beliefs;
  • nationality; or
  • social origin.

An unfairly 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 termination.

Alternatively, an employee has the right to file a claim for breach of contract with 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 Disputes Tribunal).

In addition, an illegally dismissed employee is entitled to payment in lieu of notice, which is calculated based on the scale mentioned above.

Depending on the circumstances, an employee may also claim general damages for breach of contract or loss of career prospects and any special damages suffered as a result of the termination.

In cases of unlawful termination of employment, and provided that the employer's total workforce exceeds 19 persons, the courts can order the employer to re-employ the employee. However, this discretionary power is rarely exercised.

5.4 What rights, if any, are there to statutory severance pay?

Statutory compensation for unlawful dismissal payable by the employer depends on the period of continuous employment and is calculated in the same way as compensation for redundancy. This compensation is calculated in accordance with Table 4 of the Termination of Employment Law, which provides 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 10 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.

In cases of lawful termination of employment due to redundancy, an employee is not entitled to compensation from the employer. In such case the employee is entitled to compensation from the National Redundancy Fund, to which all employers pay monthly contributions. The maximum amount of compensation that 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 (ie, which is calculated in the same way as compensation for redundancy) and the maximum (two years' salary). Before deciding, the tribunal will consider the employee's age, family situation, career prospects and all circumstances of termination. If the maximum amount is awarded, any payment in excess of one year's wages is payable to the employee by the National Redundancy Fund, not by the employer.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

The Industrial Disputes Tribunal has exclusive jurisdiction to hear and decide on disputes arising from the application of the law relating to the termination of employment. However, employees have the right to apply to a district court in relation to disputes concerning their employment where their 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.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

The limitation period for bringing employment claims before the Industrial Disputes Tribunal is 12 months from the date on which the dispute arose. If an employee is dismissed due to redundancy and applied to the National Redundancy Fund for compensation, he or she can also file a claim before the Industrial Disputes Tribunal within nine months of the date of receipt of the notice of rejection of the claim by the National Redundancy Fund. The limitation period for filing a claim with the district courts is six years from the date that the cause of action arose.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Although Cyprus is traditionally a highly unionised country, there has been a gradual shift from collective bargaining to individual agreements and an increase in flexible forms of employment.

Further, the following developments are expected in 2019:

  • The application of the EU General Data Protection Regulation (GDPR) in the context of the employment relationship will be tested before the courts and further guidance will be provided on its interpretation through case law. Moreover, the commissioner for personal data protection has announced the commencement of in-depth investigations in both the public and private sector, to ensure compliance with the provisions of GDPR and the relevant national legislation.
  • Serious tensions will arise between the government, the unions, doctors in the private sector, private hospitals and clinics, the Health Insurance Organisation, private insurers and employers and employees working in the health and pharmaceutical industry, because of the establishment of a new universal National Health Scheme.

In the absence of a final withdrawal agreement between the European Union and the United Kingdom, it remains to be seen how Brexit will affect the employment and residency rights of UK nationals living in Cyprus.

Finally, there is also debate on the introduction of a statutory national minimum wage, as there is currently a statutory minimum wage only in selected professions, and on the extension of paternity leave to unmarried fathers. With regard to the latter, on 20 February 2019 the Supreme Court declared that the relevant amendments to the Protection of Paternity Law and the Social Insurance Law were not in line with the Constitution of the Republic of Cyprus.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

As there is a rebuttable presumption that any dismissal is unlawful until the employer proves that termination of the employment contract is justified under the limited grounds provided for in the Termination of Employment Law, more comprehensive employment contracts and internal policies are required, and employers should seek professional legal advice and guidance in advance.

Moreover, the application of the EU General Data Protection Regulation and the increase in social media use by both employees and employers require more rigorous privacy policies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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