This guide aims to provide valuable insights into the key aspects of the Termination of Employment Law in Cyprus, focusing on outlining employer obligations. It is designed to help employers and their legal advisors appreciate the complexities of employment agreements, termination procedures and employee rights.

Purpose of the Termination of Employment Law, Law No. 24/1967

The primary purpose of the Termination of Employment Law, as clarified in the case of Stylianides v. British American Insurance Co Ltd (1990) 1 C.L.R. 51, is to protect employees' rights from unilateral termination as a social security measure. This protection does not deprive employees of more extensive rights that might be granted by contract law or other legal principles.

Notice Period Requirement

Unless specific cases as defined by Law No. 24/1967 justify immediate dismissal, an employee who has been continuously employed for at least 26 weeks is entitled to a minimum notice period as stipulated by Article 9 of Law No. 24/1967. If the employment contract specifies a longer notice period, the contract's terms shall apply.

Notice Period: Tips for Employers

• Written Notice: Ensure that the notice of termination is provided in writing to the employee.
• Payment in Lieu: The employer reserves the right to pay the employee’s wages for the notice period instead of requiring the employee to work through it. During the notice period, employees have specific rights, and employers must ensure these rights are respected, even if the notice period is not worked out in full.
• Contractual Compliance: Be mindful of the notice period stipulated in the employment contract, ensuring it complies with or exceeds the minimum legal requirements.
• Reasonableness: For contracts of indefinite duration, ensure that the notice period is reasonable and fair.

Grounds for Termination of Employment Without Compensation

Termination of employment by an employer is presumed to be unjustified and unlawful unless proven otherwise. It is incumbent upon the employer to substantiate the validity of the termination by proving that it aligns with the restrictive reasons outlined in Article 5 of Law N. 24/1967. Termination for any of the following reasons does not entitle the employee to compensation:

• Unsatisfactory Performance: When the employee fails to perform their work in a reasonably satisfactory manner. Relevant case law indicates that the employer must inform the employee of the complaints, give them an opportunity to improve, and issue warnings before termination.
• Redundancy: When the employee becomes redundant due to organizational changes. Employees are entitled to payment from the Redundancy Fund if their employment is terminated due to redundancy.
• Force Majeure: Termination due to events beyond the employer's control, such as acts of war, civil unrest, natural disasters, or the destruction of premises by fire not caused by the employer’s deliberate action or negligence.
• Contract Expiry or Retirement: When employment ends at the conclusion of a fixed-term contract or upon the employee reaching the normal retirement age based on custom, law, collective agreement, contract, work rules, or otherwise.
• Misconduct: Conduct that justifies dismissal without notice. The following, among others, may constitute grounds for dismissal without notice, considering all the circumstances of the case:

1. Conduct by the employee that clearly indicates the employer-employee relationship cannot reasonably be expected to continue.
2. Commission of serious misconduct by the employee in the performance of his duties.
3. Commission of a criminal offense by the employee in the performance of his duties, without the express or implied consent of their employer
4. Improper conduct by the employee during the performance of his duties.
5. Serious or repeated violation or disregard of work rules or other rules related to employment.

Termination of Employment: Tips for employers

• Case-Specific Judgment: Each termination case must be judged based on its specific facts and circumstances.
• Objective standard: As established in case law, the criterion for the justification of an employee's dismissal is whether a reasonable employer would have concluded that the termination of employment was justified under the specific circumstances.
• Timelines: Employers must act within a reasonable time to exercise the right to dismiss. If the employer does not act promptly or at least within a reasonable time, it is considered that he has forfeited the right to dismiss the employee without compensation and without notice.
• Exceptional Circumstances for Immediate Dismissal: Immediate dismissal is a drastic measure. A single act of negligence or a minor misconduct does not justify dismissal without notice unless it is accompanied by serious consequences.
• Investigation in cases of gross misconduct: Employers should investigate within reasonable expectations before dismissal and provide employees with an opportunity to defend themselves against allegations.
• Informing and Warning: In cases of unsatisfactory performance, the employer should inform the employee of the complaints against him, allow time for improvement, and warn them of the possibilities or likelihood of dismissal before issuing a notice of termination (James v. Waltham Holy Cross UDC [1973] ICR 398).
• Right to a Hearing: In cases of misconduct or unsatisfactory performance, the employee should be given an opportunity to defend themselves against the allegations made, unless it cannot reasonably be expected of the employer to provide this opportunity. For example, in cases where the facts cannot be objectively disputed or are admitted by the employee, the discussion between the employer and employee may be omitted (West Midlands Cooperative Society Ltd v. Tipton (1986) 1 ALL ER 513 (House of Lords)).

Our Services

Economou & Co LLC is at the forefront of employment law in Cyprus, offering expert guidance and support to employers, particularly in the fintech and ICT sectors. Our team of experienced legal advisors is dedicated to ensuring compliance with employment laws and protecting the interests of our clients. We offer a wide range of services, including:

• Employment Agreement Drafting and Review: We ensure that your employment contracts are comprehensive, compliant, and tailored to your business needs.
• Advisory on Employment Practices: We provide strategic advice on best practices for hiring, managing, and terminating employees.
• Compliance Audits: Our team conducts thorough audits to ensure your business complies with all relevant employment laws and regulations.
• Training and Seminars: We offer training programs and seminars to educate employers on the latest developments in employment law.
• Legal Representation in Employment Disputes.

With our support, you can focus on growing your business while we take care of your legal and HR needs, ensuring your company remains compliant and your employees well-supported.

For additional information, you can also read the rest of our comprehensive guides on employment law:

1. Comprehensive Guide to Employment Law in Cyprus: Legal Framework, Contractual Obligations, and Employee Rights.
2. Comprehensive Guide for Employment Agreements in Cyprus for ICT and Fintech Companies.