Comprehensive Guide to Employment Law in Cyprus

17 Apr 2026

This guide draws together the principal areas of Cyprus employment law, based on Economou & Co LLC's published practical guides. It is intended to provide an accessible overview of the legal landscape across the full employment lifecycle, from the formation of the employment relationship through to termination, post-employment obligations, and dispute resolution. The guides referenced throughout this publication reflect the firm's experience advising on Cyprus employment law matters across a range of sectors and employer sizes, including international companies, technology and fintech businesses, and senior-level individual mandates

1. The Legal Framework

Employment law in Cyprus is principally governed by statute. Key legislative instruments include the Termination of Employment Law 24/1967, the Protection of Wages Law 35(I)/2007, the Annual Holidays with Pay Law 8/1967, the Social Insurance Law 59(I)/2010 and the Organisation of Working Time Law 63(I)/2002, alongside other sector-specific and topic-specific enactments.

In addition to these laws, Cyprus is a member of the European Union, and its employment regulations are influenced by EU directives. This includes regulations on non-discrimination, health and safety, and working conditions.

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2. Government Bodies and Enforcement

Employment disputes and labour-related enforcement in Cyprus are distributed across several institutions.

The Industrial Disputes Tribunal has exclusive jurisdiction over claims arising from termination of employment, including unlawful dismissal, payment in lieu of notice, redundancy-related compensation and other payments arising out of the contract of employment, save where the amount claimed exceeds the equivalent of two years’ salary, in which case jurisdiction lies with the District Court. Tribunal decisions are subject to appeal on points of law within 42 days.

The Ministry of Labour and Social Insurance, including in particular the Department of Labour Relations, oversees labour policy and industrial relations matters. The Social Insurance Services administer social insurance contributions and benefits, while the Department of Labour Inspection conducts workplace inspections and enforces occupational health and safety legislation.

For further detail: Comprehensive Guide to Employment Law in Cyprus: Legal Framework, Contractual Obligations, and Employee Rights

3. Employment Contracts

A well-drafted employment contract will address the probationary period, place of employment, duties, working time, pay and benefits, and leave entitlements. Depending on the role and the nature of the business, it may also include confidentiality provisions, garden leave and notice arrangements, intellectual property assignment, and post-termination restrictions. All terms must comply with applicable mandatory law. Contractual provisions that seek to waive or reduce statutory rights are void to that extent.

For further detail: Comprehensive Guide for Employment Agreements in Cyprus for ICT and Fintech Companies

4. Restrictions on Additional Work During Employment

Employees generally have the right to take on additional employment outside their agreed working hours. Under Law 25(I)/2023, this right may be restricted only where the limitation is set out in writing and justified by an objective and proportionate business reason.

For further detail: Non-Compete Clauses in Cyprus: What You Need to Know

5. Illegal Employment Terms

A contractual term that seeks to remove or reduce a statutory employment right in a way the law does not permit is void or unenforceable to that extent. This is of particular relevance in areas such as dismissal, notice, and minimum statutory entitlements.

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6. Non-Compete and Non-Solicitation Clauses

A non-compete clause seeks to prevent a departing employee from working for a competing business or establishing one. A non-solicitation clause seeks to prevent a departing employee from actively approaching the employer’s clients, customers, suppliers, or staff. Under Cypriot law, the enforceability of both remains uncertain, although narrowly drawn non-solicitation restrictions may be viewed more favourably than broad non-compete restraints. Broad post-employment restrictions should not be assumed to be automatically enforceable.

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7. Confidentiality Clauses

A confidentiality clause is a contractual provision requiring one or both parties not to disclose, use, or misuse specified confidential information. Such clauses do not normally extend to information that is publicly known, forms part of an employee’s general skill and experience, or must be disclosed by law. Where the clause is intended to protect trade secrets or highly sensitive information, the extent to which the employer has identified and protected that information may also be relevant.

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8. Employment Agreements and Intellectual Property

Employment agreements should include clear clauses dealing with intellectual property created during employment. These should cover ownership, disclosure, assignment and any further steps needed to secure the employer’s rights. Careful drafting helps reduce ambiguity and protect valuable business assets.

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9. Trade Secrets

Under section 2 of Law 164(I)/2020, a trade secret is information that is secret, has commercial value because it is secret, and has been subject to reasonable steps to preserve its confidentiality by the person lawfully controlling it. Not all confidential information qualifies as a trade secret, but trade secrets constitute a protected subset of confidential information.

For further detail: Trade Secret Protection in Cyprus: Framework, Remedies, and Best Practices

10. Protections Against Unlawful Use or Disclosure of Trade Secrets

Trade secret holders may apply to the Cypriot courts for interim measures to prevent or immediately stop any unlawful use or disclosure of a trade secret. Upon such application, the Court may order the temporary cessation or prohibition of unlawful use or disclosure; the prohibition of production, offering, placing on the market, use or storage of infringing goods; and the seizure or delivery up of goods suspected of incorporating unlawfully obtained trade secrets.

For further detail: Trade Secret Protection in Cyprus: Framework, Remedies, and Best Practices

11. Springboard Injunctions

A springboard injunction is a court order designed to prevent a defendant from continuing to exploit the unfair advantage obtained through past unlawful conduct, such as the misuse of confidential information or trade secrets. Its purpose is not to restrain ordinary lawful competition but to neutralise the head start created by the earlier wrongdoing.

For further detail: Springboard Injunctions: Protecting Businesses from Unfair Competitive Advantage

12. Garden Leave and Payment in Lieu of Notice

Payment in lieu of notice allows the employer to pay out the notice period instead of requiring the employee to work it, whereas garden leave keeps the employment relationship in place during that period while the employee remains away from work on full pay. In Cyprus, the distinction may be less clear-cut than in other common law jurisdictions, since Law 24/1967 deems the employee to remain employed for certain statutory purposes during the notice period.

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13. Voluntary Resignation

Voluntary resignation occurs when an employee freely and genuinely chooses to terminate the employment relationship, without undue pressure or threat. A resignation may still give rise to legal and practical questions, including the applicable notice period, handover obligations, return of employer property, and any continuing post-termination obligations.

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14. Notice Period Requirements

An employee who has been continuously employed for at least 26 weeks is entitled to a minimum notice period under Article 9 of Law 24/1967, the length of which increases by reference to the employee’s period of continuous employment. Where the employment contract provides for a longer notice period, the contractual term will prevail. Any contractual provision purporting to reduce the statutory minimum is void.

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15. Immediate Termination

Cyprus law recognises limited circumstances in which an employer may terminate employment without notice, typically where the employee’s conduct is sufficiently serious to justify immediate dismissal. Whether summary termination is lawful depends on the facts of the particular case and ultimately turns on whether dismissal would be considered reasonable in the circumstances.

For further detail: Comprehensive Guide to Employment Law in Cyprus: Legal Framework, Contractual Obligations, and Employee Rights

16. Remedies for Unlawful Dismissal

An employee who has been unlawfully dismissed may bring a claim before the Industrial Disputes Tribunal. The compensation the Tribunal may award cannot be less than the redundancy payment the employee would have received, nor more than two years’ wages; in assessing the award, the Tribunal may take into account factors such as the employee’s remuneration, length of service, age, career prospects, and the circumstances of the dismissal. Where the employer employs at least 20 employees, the Tribunal may also, in limited cases, order reinstatement together with compensation for actual loss not exceeding twelve months’ wages.

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17. Redundancy

Redundancy arises where an employee’s position is no longer required because of organisational, structural, or operational changes within the business. Under Article 5 of Law 24/1967, termination by reason of redundancy is one of the defined grounds that does not give rise to compensation for unlawful dismissal. An employee whose employment is terminated by reason of redundancy may be entitled, subject to the statutory conditions, to a payment from the Redundancy Fund calculated by reference to length of service and last wages.

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18. The EU Pay Transparency Directive

The EU Pay Transparency Directive (Directive (EU) 2023/970) will introduce significant new obligations for employers across the EU, including pay transparency measures, pay gap reporting, and stronger enforcement tools. Member states, including Cyprus, must transpose the Directive by 7 June 2026.

* Since the publication of our guide, a draft bill has been released for public consultation.

For further detail: EU Pay Transparency Directive: Implications for Employers in Cyprus

19. Digital Nomads, Third-Country Nationals, and International Companies

Cross-border working arrangements raise questions of immigration, residence, work permit, tax, and employment law that frequently overlap. Each category of worker or arrangement is subject to a distinct legal regime.

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20. Platform Work

The EU Platform Work Directive (Directive (EU) 2024/2831) establishes a harmonised framework across the EU governing employment classification, algorithmic management, and transparency in the context of platform-based work. Its central mechanism is a rebuttable presumption of employment: where factual indicators demonstrate that a digital labour platform exercises direction or control over the performance of work, the relationship may be treated as an employment relationship unless the platform proves otherwise. The Directive also imposes strict requirements on automated monitoring and decision-making systems, including the right of individuals to obtain explanations for significant automated decisions and to request human review. Member states, including Cyprus, are required to transpose the Directive into national law by 2 December 2026.

For further detail: The EU Platform Work Directive: A Practical Guide

21. When to Seek Legal Advice

Employment law questions arise at every stage of the employment relationship, from the drafting of contracts and the structuring of restrictions, through to termination, redundancy, and post-employment obligations. Complex or high-value matters, and situations where legal rights and commercial decisions intersect, benefit from early specialist advice.

The content of this article is valid as of the publication date mentioned above. It is intended to provide a general guide and does not constitute legal or professional advice, nor should be perceived as such. We strongly recommend that you seek professional advice before acting on any information provided.

If you need further assistance, please feel free to reach out to us via phone at +357 22260064 or email at info@economoulegal.com