Termination Of Employment In Cyprus: Legal Rights, Notice Periods And Redundancy Rules

Termination of employment in Cyprus: legal overview

Termination of employment in Cyprus is primarily regulated by the Termination of Employment Law (Law 24/1967), supplemented by additional employment legislation and case law. These provisions apply across the private, public, and semi-governmental sectors and govern dismissal procedures, notice periods, redundancy payments, and compensation for unlawful termination.
The Labour Court examines disputes related to dismissal and employee rights. For this reason, employers and employees must understand these rules to ensure compliance and avoid financial exposure.

Who is protected under the Cyprus termination law

The law applies to employees who:

• Have an employment relationship or contract
• Have completed at least 26 weeks of continuous employment

Notice periods for termination of employment in Cyprus

An employer who intends to dismiss an employee with at least 26 weeks of continuous service must provide written notice. The minimum notice period depends on the employee's length of service.

Payment instead of notice may be provided where legally justified.

Lawful grounds for dismissal

Termination must be based on a legally recognized reason. Lawful grounds may include:

• Proven employee misconduct
• Unsatisfactory performance following warnings
• Redundancy due to business restructuring
• Expiry of a fixed-term contract
• Force majeure circumstances

If dismissal does not fall within accepted legal grounds, it may be considered unlawful.

Unlawful dismissal in Cyprus

An employee who has completed at least 26 weeks of continuous employment may claim compensation if dismissed without lawful justification.

Unlawful dismissal may arise where:

• No valid reason exists
• Proper disciplinary procedure was not followed
• The dismissal is discriminatory
• The employee resigns due to serious employer misconduct, known as constructive dismissal

Constructive dismissal occurs where the employer's behaviour makes continuation of employment objectively impossible.

Compensation for unlawful termination

The Labour Court assesses compensation and may award up to two years' salary, depending on the circumstances.

The Court considers factors such as:

• The employee's remuneration
• Duration of service
• Age of the employee
• Impact on career prospects
• Circumstances surrounding the dismissal
• Claims must be filed within the statutory limitation period.

Situations where compensation is not payable

Compensation is generally not payable where:

• The dismissal results from serious misconduct
• A fixed-term contract expires naturally
• Termination occurs due to lawful redundancy
• Force majeure events cause termination
• The employee resigns without grounds for constructive dismissal

Each case requires individual legal assessment.

Redundancy in Cyprus

Redundancy arises when employment ends for economic, technical, or organisational reasons unrelated to the employee's conduct. In these cases, compensation is paid from the Redundancy Fund, provided eligibility criteria are met.

Redundancy compensation increases progressively according to the employee's years of continuous service. Employees with up to 4 years of service receive 2 weeks' wages for each year of service. Between 4 and 10 years, compensation increases to 2.5 weeks' wages per year. Between ten and fifteen years, three weeks' wages apply per year. Between fifteen and twenty years, three and a half weeks' wages apply per year. Between twenty and twenty-five years, four weeks' wages apply per year.

The calculation is subject to statutory weekly wage limits.

Time limits for employment claims

Claims for unlawful dismissal must generally be filed within twelve months from the date of termination. Early legal advice is therefore critical.

Practical considerations for employers

Employers should ensure:

• Proper documentation of performance issues
• Compliance with warning procedures
• Accurate calculation of notice periods
• Objective redundancy assessments
• Non-discriminatory termination decisions
• Procedural errors are a common cause of successful employee claims.

How Michael Chambers & Co. LLC assists in employment termination matters

Michael Chambers & Co. LLC provides legal representation and advisory services in employment termination matters.

Our services include:

• Review of dismissal procedures
• Representation before the Industrial Disputes Court
• Advice on redundancy planning
• Drafting and reviewing employment contracts
• Negotiation of termination and settlement agreements
• Defence and prosecution of wrongful dismissal claims

We provide clear, structured guidance aligned with Cyprus employment law.

Legal guidance on termination of employment in Cyprus

Employment termination decisions often involve legal exposure, financial implications, and procedural requirements. A structured legal assessment helps clarify risks, confirm compliance with statutory obligations, and determine available remedies in the event of disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.