Employment in the Republic of Cyprus

The Republic of Cyprus has traditionally been a cultural melting pot situated on the edges of the eastern Mediterranean. Over time, it has become home to people of diverse religious, ethnic, and intellectual backgrounds from Europe, Asia, and Africa. This historical consistency has fostered vibrancy, productivity, creativity, diversity, and tolerance. Following its independence from the British Empire in the 20^th century and in consideration of the rapid legal, sociological, and technological advancements experienced globally and partially fueled by competing economic theories and models, the Republic had to rapidly modernize and develop its social foundations and bring the same in line with the rest of the civilized world. Emphasis was placed on areas such as social cohesion, medicine, education, and the development of statutes to regulate and protect labor within the Republic in addition to the benefits and rights granted by virtue of the Republic’s signatory of various treaties and its membership in various international or supranational organizations such as the European Union.

Legislative System

The Republic has a rich history of structural societal existence, regulated by laws dating as far back as 1550 B.C. as evidenced by various Cypro-Minoan syllabary scripts and inscriptions. As a structured society with a rich history and social continuity, the Republic, by drawing upon social norms and traditions, legal principles of the common law system, jurisprudence and the additional input of European Union directives and regulations, has developed a cohesive legislative regime which aims to protect the rights of all workers, irrespective of their gender, employment type or duration, cultural or ethnic background. In addition to the protection of the rights of employees, the legislative regime of the Republic imposes several obligations upon the Employer. Notwithstanding the aforementioned, the Republic has developed specialized tailor-made legal instruments aimed at protecting individuals working in sensitive or particularly important sectors such as hospitality, hotel industry or maritime merchants. The Republic had also permitted the creation of multiple unions which retain statutory power to negotiate on behalf of its members with the applicable authorities. The Republic’s judiciary and dispute resolution mechanisms are generally perceived of doing a satisfactory job with respect to upholding the sanctity of the employment legislative regime and enforce them viz-a-vis Employers, Governmental Institutions, or any other potential offending entity. The authority to adjudicate issues pertaining to a civil nature arising out of employment is given to the Industrial Disputes Tribunal.  The Legislative System governing labor in the Republic as well as the protection of the rights afforded to the working class consists of various instruments, namely:

• The Constitution of the Republic of Cyprus;
• The Protection of Wages Law;
• The Organization of Working Time Law;
• Industrial Relations Code;
• Part-Time Work Employees (Prohibition of Unfavorable Treatment) Law;
• Fixed Term Work Employees ( Prohibition of Unfavorable Treatment) Law;
• Safeguarding of Employees Rights in the Event of Transfers of Undertakings, Business or Parts of Undertakings or Businesses Law;
• Health and Safety at Work Law;
• The Termination of Employment Law; and
• Directive 2000/78/EC.

Commencement and Termination of Employment

The employment of an individual in the Republic of Cyprus commences with the Parties coming to an agreement on the terms and conditions of the employment. It is recommended but not required for the particulars of the employment to be documented by contract. The employment contract should, at the very least, contain the following information whilst in the absence of a contract, the Employer shall inform the employee, in writing, of the following:  

• The identity of the parties;
• The place and time of work;
• The position or the specialisation of the employee;
• The commencement date of the contract, its duration and termination procedures;
• Annual leave and any other entitlement;
• All the payments due to the employee; and
• The application of any collective agreements.

The contract should include essential details, and the employer must secure two copies of the Form SIS 5-018 “Certificate of Commencement of Employment”, one to be kept by Employer and the other by the Social Insurance Services. At the same time the Employer shall complete and submit the Form SIS 1-003 “Declaration of hiring employees” to the Social Insurance Services or the Citizens Service Center. It is important to note that if the Employee does not retain a social insurance number, the employer is required to submit the form for the registration of that employee. The legislative system of the Republic provides for the Employer’s right to a probationary period for any new employee it hires which ranges from 26 weeks with extensions being possible to be increased up to 104 weeks from the date of commencement of employment. During the probationary period and unless otherwise agreed between the Parties via contract, the employee can be dismissed without any further obligations, whilst the rights and obligations of both parties will remain the same during the probationary period. An employment can be terminated in accordance with either the contract or the law or at the Employer’s discretion, provided that the Employer satisfies the criteria imposed by the law in such a scenario. Employment can be terminated by the employer for the following causes:

• Redundancy;
• Force Majeure;
• End of Employment Term;
• Unsatisfactory Performance;
• Conduct rendering the employee to be subjected to summary dismissal;
• Conduct which renders the relationship between Employer and Employee to be unable to continue.

If the Employment contract does not include or cover any notice periods, the Law stipulates a minimum notice period ranging from no notice for employees with less than 26 weeks of service up to 8 weeks for employees with a length of service of 312 or more weeks as shown below:

With respect to unlawful dismissal, the Employee is entitled to remedies which usually take the form of compensatory damages, which are payable on an equivalent basis for the notice period to which the employee was entitled. If an employee was entitled to 2 weeks’ notice pursuant to the law, then they shall be entitled to 2 weeks wages.

Organization of Labor

While reviewing the topic of labor organization and management, it is important to note that certain organizations, including but not limited to the Armed Forces, Police, and Seafarers covered by the Merchant Shipping Law of 2003, are excluded. Any employer intending to organize labor in specific patterns or schedules shall take into account the nature of the work, principles of adapting to the work, and undertake measures to alleviate monotonous work, conducting it at a predetermined pace. The location and timeframe of work shall be clearly communicated by the employer. The working hours of any employee cannot exceed 48 hours per week or 8 hours per day, including overtime. Employers have some discretion in drawing up working schedules, but employees are entitled to 11 continuous hours of rest per 24-hour day and 24 continuous hours per week or a continuous 48-hour period for 2 weeks of employment. All employees are entitled to a minimum of 20 days of annual paid leave, with those working 6 days per week entitled to 24 days of annual paid leave. It is important to note that employees may be offered financial remuneration or incentives in exchange for reducing their annual leave. Managerial staff are exempt from statutory restrictions on hours worked, but attention must be paid to provisions regarding rest, as different industries, such as Hospitality and Retail, are regulated differently. Overtime pay is generally not regulated by law and is often part of private agreements between employers and employees, with certain industries, like Hospitality and Retail, having separate regulations. Temporary absence from work, whether due to incapacity, parental leave, or force majeure, is considered part of the employment period. Employees absent for up to 12 months due to incapacity cannot be terminated. Statutory sick pay is covered by the Social Insurance Services for any period exceeding 3 days. The primary employment taxes prescribed by the Legislative System are related to income tax, social insurance, and national health service contributions. The minimum wage in the Republic is set at 900 euros gross for the first 6 months of employment and must rise to 1000 euros after the lapse of the first 6 months, except for separately regulated industries.

Protection of Wages

The Republic’s judiciary and governmental organizations adopt a very strict stance on the remuneration of employees, upholding the sanctity of wages to the highest degree possible. Wages are to be paid on a weekly or monthly basis, as agreed between the parties. The nonpayment of wages owed to an employee constitutes a criminal offense for the employer. Under the Republic’s laws, an employee’s wages must be paid to the bank account of their choice or via a cheque in their name. An exception can be made for the salary to be paid in cash subject to specific criteria beyond either the employer’s or employee’s control. Employers cannot in any manner or form restrict or influence the employee’s discretionary freedom on the disposal of their wages. Payment of wages in kind is possible under the laws, subject to fulfillment of certain criteria and only in specific circumstances. Deductions from wages, apart from the employer’s statutory contributions on behalf of the employee, are forbidden and generally perceived as taboo. Deductions are allowed in certain circumstances, such as statutory deductions (i.e., income tax), regulatory deductions (i.e., healthcare), prescribed by judicial rulings, deductions required to compensate or cover any damages suffered by the business either by intent or serious negligence (subject to consultation with the employee or their legal representative), provided by a collective agreement or with the employee’s consent, which must be acquired on an at-will basis without any undue influence or repercussions for the employee in case of refusal. The payment of wages is monitored by the pay slip system, pursuant to which every employer is obligated to provide its employees with pay slips within five working days following the receipt of salary. The frequency of providing pay slips is consistent with the frequency of salary payment. The pay slip shall be representative of all the deductions and earnings due to the employee. Any employee affected by the non-payment of wages or other burdens related to employment is invited to submit formal complaints with the Department of Labor Relations of the Ministry of Labor.

Conclusion

In conclusion, the Legislative System of the Republic of Cyprus has developed and maintains a qualitative, cohesive, and comprehensive legislative and regulatory approach to labor employment. By drawing on its rich and diverse history, understanding the socio-political ideologies governing social segments of its multi-cultural society, as well as being aware of its industry advantages such as those of tourism and shipping, the Republic has instilled a harmonious system for the workers. Irrespective of gender, socio-economic status, or cultural background, the system developed by the Republic and enforced by its judiciary system aims to provide the workers of Cyprus with a high level of protection, strict enforcement of rights, and multiple guarantees not observed in other parts of the globe.

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