The legal framework of ​redundancies in Cyprus

1. When a dismissal of an employee is by reason of redundancy?  

1.1 Redundancy, pursuant to the Termination of Employment Law, L.24/1967 as amended, is the termination of employment in the following cases: 

1.1.1 The employer has ceased or intends to cease carrying on the business in which the employee is engaged; 

1.1.2 The employer has ceased or intends to cease carrying on the business at the place where the employee is engaged; and 

1.1.3 For any of the following reasons which relate to the operation of the business: 

1. 1. Modernization, automation or any other changes in the methods of production or organization which reduces the number of necessary employees 
   2. Changes in the products or the methods of production or the necessary qualifications of the employees 
   3. Closing down of departments 
   4. Difficulties in placing products in the market or credit difficulties 
   5. Lack of orders or raw materials 
   6. Rarity of means of production 
   7. Reduction of the capacity of work 

1.2 Therefore, an employee is redundant when his/her employment is terminated for any of the above grounds.  

2. What are the rights of an employee in the event of termination due to redundancy? 

2.1 In the case where the employment of an employee, who has been continuously employed for 104 weeks by the same employer, is terminated because of redundancy, he is entitled to redundancy payment from the Redundancy Fund. In this case, a specific claim shall be filed as explained in par.4.3 below. 

2.2 Alternatively, if the employee has reasonable grounds to believe that his/her dismissal was not due redundancy or his/her claim at the Redundancy Fund was rejected, he/she may proceed with the filing of an application at the Industrial Disputes Courts requesting compensation due to unlawful dismissal.  

3. Shall a notice of termination be given to the employee? 

3.1 Yes. It should be noted that the period of notice depends on the duration of the employment. It starts from one (1) week in cases where employees have been employed for twenty-six (26) up to fifty-one (51) weeks and can go up to eight (8) weeks where employees have been employed for a period of more than three hundred and twelve (312) weeks. 

4. Procedural requirements 

4.1 If you are an employer, it is advisable to seek legal advice as to whether, based on your facts, the requirements of a lawful termination of employment due to redundancy are met. If so, that an employment can be terminated due to redundancy, the employer shall give an advance notice (Form SIS 608) of at least one month, to the Minister of Labour, Welfare and Social Insurances. By doing so, the employer shall declare the number of employees likely to become redundant, the branch or branches of the business to be affected by the redundancy, the names, the occupations and the family responsibilities of the affected employees and the reasons for redundancy. 

4.2 Once the notice above is given by the employer to the Ministry, the employer shall proceed with the service of a written notice of termination to its employee. 

4.3 Since the employment contract is terminated due to redundancy, the employee for the purposes of payment from the Redundancy Fund shall submit a claim on a specific application form (SIS 600). The application form should be submitted at any Social Insurance District Office or Citizen Service Centre within three months from the day of the dismissal of the employee. However, in cases where the claimant proves that there was a good cause for the delay of submission of the application form, the payment can be made if the application form is submitted within twelve months from the day of his dismissal. 

5. What is the amount of redundancy payment? 

5.1 The amount of redundancy payment is calculated on the basis of the employee’s service and his/her last wages. Specifically: 

1. Up to 4 years – 2 weeks wages for each continuous period of employment of 52 weeks 
2. Above 4 and until 10 years2 ½ weeks wages for each continuous period of employment of 52 weeks 
3. Above 10 and until 15 years3 weeks wages for each continuous period of employment of 52 weeks 
4. Above 15 and until 20 years 3 ½ weeks wages for each continuous period of employment of 52 weeks 
5. Above 20 and until 25 years 4 weeks wages for each continuous period of employment of 52 weeks 

6. Time Frame 

An application requesting damages for unfair dismissal shall be filed by the applicant within twelve months from the date the termination notice was served to the employee or within nine months from the response of the Provident Fund for redundancy. 

7. Fees  

Our fees for representing a client in all legal proceedings in connection with an employment dispute depends on the complexity of the matter.