The fifth of our international monthly series of articles by guest lawyers, Constantinos D. Messios and Marilena M. Stylianou of C.D. Messios LLC, looks at dismissal protections in Cyprus.
International Series #5 – A Brief Overview of the Law on Dismissal in Cyprus
Cyprus applies the principles of common law and equity. Upon the accession of Cyprus to the European Union in 2004, its Constitution was amended so that EU law takes priority over Cypriot law.
The grounds on which an employer can rely in order to lawfully dismiss an employee are outlined under Article 5 of Law 24/67. They are as follows:
- When an employee fails to perform his/her duties in a satisfactory manner.
- Redundancy.
- When a fixed-term contract comes to an end (and it is not renewed).
- Upon an act of God, civil commotion, act of war or force majeure.
- Conduct on the part of the employee, which renders him/her subject to summary dismissal.
- Conduct which makes it clear that the relationship between the employer and the employee cannot reasonably be expected to continue (i.e. due to the commission, by the employee, of a serious criminal or disciplinary offence, indecent behaviour at the workplace, or violation of the employment terms).
Constructive dismissal in Cyprus occurs where the employee is deemed to be unlawfully dismissed even though it was he/she who terminated his services to the employer. In other words the employee terminates his services due to the conduct of the employer. In order for this argument to succeed in court the employer has to be shown to have acted in such a manner so as to leave no other option to the employee but to stop providing his services to the employer. Either the behaviour of the employer has to go to the root of the employment relationship or the employer has to conduct his affairs in such a manner so as to show that he no longer wishes to be bound by the employment contract.
Notice Period
When an employer dismisses an employee the former can elect to give the latter payment in lieu of notice. The statutory minimum notice to be given to the employee depends on the employee’s period of continuous employment. The parties, by agreement, may extend this period. However, notice cannot be less than the statutory minimum.
Protection from Dismissal
Employees are protected from dismissal if their dismissal was due to one of the following reasons:
- Participation in Trade Union related activities.
- Membership in a Trade Union.
- Gender, colour, religion, political beliefs, social standing (etc.).
- Pregnancy or motherhood (an employer will commit a criminal offence if he dismisses a pregnant employee from the time he is presented with a doctor’s certificate of pregnancy up to three months after the end of maternity leave).
Remedies available
One of the remedies available for unfair dismissal is an order for reinstatement. This remedy however is available in theory rather than in practice. The courts in Cyprus rarely order the reinstatement of the employee.
If the Employment Tribunal rules that the employee was unfairly dismissed, then he is entitled to at least the amount that he would receive if he were made redundant. At a maximum he is entitled to the annual salary that he would receive for two years. The maximum paid by an employer is one year’s salary with the redundancy fund paying the rest.
If a person wishes to claim compensation in excess of two years’ income then a civil action should be filed for breach of contract in the district court. The employment tribunal does not have jurisdiction to award anything higher than two years’ salary.
The award that the employee will receive is at the discretion of the Employment Tribunal. In calculating the award the tribunal evaluates a number of factors; the length of service, wage and all other earnings, the age of the applicant and the circumstances surrounding the dismissal.
The dismissal of an employee should be the last resort. Prior to the dismissal the employee should receive a warning (preferably just an oral and if the breach continues, a written one) relating to his efficiency or conduct. If an employer uses a job evaluation scheme it becomes easier to prove in court either that the employee has not improved over time, or that he is inefficient.
Redundancy
Any employee who has been continuously employed for more than 104 weeks and is dismissed on redundancy grounds is entitled to compensation from the Redundancy Fund. Redundancy payments are calculated based on the length of service of the employee. Prior to an application to the court for an award, the employee has to file an application with the Ministry of Labour and Social Insurance for compensation, within 3 months from the day of dismissal.
Due to the rapid increase in the number of applications to the Redundancy Fund, it may take up to a year to examine an application. The upper limit for redundancy awards is compensation equal to 75 ½ weeks’ salary.
If the Fund rules that there had been a redundancy situation, it then compensates the employee. If the Fund rules that there was no redundancy then the employee has to file an application with the Employment Tribunal, against both his former employer and the Fund, within 9 months from the decision of the Redundancy Fund.
A slightly different regime applies when it comes to collective dismissals in that it involves information and consultation procedures with the representatives of the employees and in certain cases the Ministry of Labour and Social Insurance.
For more information on employment law issues in Cyprus, Constantinos D. Messios can be contacted at messios@messios.com and Marilena M. Stylianou can be contacted at marilena@messios.com. You can also visit the C.D. Messios LLC website: www.messios.com
