Lawful termination of employment in Cyprus

Lawful termination of employment in Cyprus

Termination of an employment contract is one of the most sensitive issues in labour law, both for employees and employers. In Cyprus, employment relations are regulated by the Termination of Employment Law of 1967 (Law 24/1967) and related labour legislation, which establish a strict framework of rights and obligations for both parties. Failure to comply with these rules may result in financial liabilities, reputational risks, or litigation before the Industrial Disputes Court.

At Hadjivangeli & Partners we assist clients in navigating the complexities of employment termination in Cyprus, ensuring compliance with the law and safeguarding the interests of employees and employers alike.

Termination by the employee

Employees in Cyprus are entitled to resign, but this right must be exercised in accordance with the contract and the law. A written notice is always recommended, even when the employment agreement does not explicitly require it.

The minimum notice period depends on the employee’s length of service:

• up to 1 year – no notice is required;

• 1–2 years – 1 week;

• 2–5 years – 2 weeks;

• 5–10 years – 3 weeks;

• over 10 years – 4 weeks.

If an employee leaves without respecting the notice period, the employer may deduct wages corresponding to the unworked period.

At the same time, employees are entitled to:

• the full salary up to the last day of employment;

• payment for unused annual leave days;

• an official certificate of employment, which is important for future professional opportunities or benefit claims.

Employees should also be aware of their right to register with the Social Insurance Services to safeguard eligibility for unemployment benefits, if applicable.

Termination by the employer

Employers may terminate a contract, but only on legally recognised grounds. These include:

• serious misconduct (e.g. theft, fraud, persistent absenteeism);

• incapacity to perform duties (due to illness, accident, or lack of competence);

• redundancy, business closure, or reorganisation;

• expiry of a fixed-term contract.

The law sets out strict minimum notice periods, depending on the employee’s length of service:

• up to 26 weeks – no notice;

• 26–51 weeks – 1 week;

• 1–2 years – 2 weeks;

• 2–3 years – 3 weeks;

• 3–4 years – 4 weeks;

• 4–5 years – 5 weeks;

• 5–6 years – 6 weeks;

• over 6 years – 7–8 weeks.

In addition, redundancy cases often require the employer to notify the Ministry of Labour and provide supporting documentation. Failure to do so can result in fines or additional liability.

Compensation in case of unlawful dismissal

When an employer dismisses an employee without valid grounds or without respecting the proper procedure, the dismissal is considered unlawful. In such cases, employees may:

1. Apply for compensation through the Social Insurance Services – provided they have been employed for at least 26 weeks.

2. File a claim with the Industrial Disputes Court – which has the authority to award compensation, damages, or reinstatement in certain cases.

The amount of compensation depends on various factors, including:

• length of employment;

• level of remuneration;

• age of the employee;

• circumstances of the dismissal.

This framework is designed to strike a balance between business needs and the protection of employees’ rights.

Special considerations

• Pregnant employees: Cypriot law provides strict protection for pregnant employees and those on maternity leave. Termination during this period is generally prohibited, except in cases of gross misconduct.

• Collective redundancies: Employers planning mass redundancies must follow additional procedures under EU and Cypriot law, including consultation with employee representatives.

• Fixed-term contracts: If such a contract is terminated before its agreed end date without lawful grounds, the employee may claim damages for the remaining duration.

Practical advice for employees

• Always submit resignations in writing and keep a copy.

• Request a certificate of employment for future use.

• Register with the Employment Office promptly to secure benefits.

• If you suspect unfair treatment, consult a lawyer before signing any settlement agreement.

How Hadjivangeli & Partners can help

Our firm provides comprehensive legal support on employment termination matters in Cyprus, including:

• advising on lawful procedures for dismissal or resignation;

• preparing notices, contracts, and settlement agreements;

• representing employees in claims for compensation or unlawful dismissal;

• assisting employers in restructuring, redundancy, or compliance cases;

• representing clients before the Ministry of Labour and the Industrial Disputes Court.

By combining legal expertise with practical knowledge of Cypriot labour law, we ensure that our clients are fully protected and that employment termination procedures are handled smoothly, lawfully, and with minimal risk.

This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication. This article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.