Termination of Employment in Cyprus: A Practical Legal Guide
Dismissal is the single most litigated event in Cyprus employment law, and the one where employers expose themselves to the largest unbudgeted liabilities. The governing statute, the Termination of Employment Law of 1967 (Law 24/1967, as amended), sets a regime that is protective of employees and unforgiving of procedural shortcuts. An employer who dismisses for the wrong reason, or for the right reason in the wrong way, can find itself before the Industrial Disputes Tribunal facing an award of up to two years' wages. This guide sets out the framework that every employer and every employee in Cyprus should understand before a termination takes effect.
The Legal Framework
Termination is regulated principally by Law 24/1967, supplemented by the Transparent and Predictable Working Conditions Law of 2023 (Law 25(I)/2023), the Collective Redundancies Law, the equal treatment and maternity protection statutes, and a substantial body of Industrial Disputes Court and appellate caselaw. The framework applies across the private, public and semi-governmental sectors.
The forum matters. The Industrial Disputes Tribunal holds exclusive jurisdiction over disputes arising from termination, save in a few carefully defined exceptions.
When Does Protection Against Dismissal Begin?
Statutory protection against unlawful dismissal crystallises once an employee completes 26 weeks of continuous employment with the same employer. Before that threshold, employment is governed by ordinary contract principles and either party may terminate without cause and without notice, subject to anything more favourable in the contract.
The probationary period was reshaped by Law 25(I)/2023. The default maximum probation is now six months. The former practice of extending probation to 104 weeks survives only for directors, executives, managers and persons in comparable senior positions. Employers still operating two-year probation clauses for ordinary staff are relying on a position the 2023 law has displaced, and should revise their templates.
Lawful Grounds for Dismissal
Law 24/1967 does not permit dismissal at will. After the qualifying period, a dismissal is unlawful unless it rests on one of the statutory grounds. The recognised grounds are:
Redundancy
The role becomes surplus for economic, technical or organisational reasons unconnected to the individual, including reduced volume of business, modernisation or automation, changes to products or production methods, lack of orders or raw materials, and credit or market difficulties.
Force Majeure
An act of God, war, civil disturbance or natural catastrophe that makes performance impossible.
Expiry of a Fixed-Term Contract
Where the term ends and the contract is not renewed.
Reaching Pensionable or Contractual Retirement Age
Conduct Rendering the Employee Liable to Dismissal Without Notice
Serious misconduct, a criminal or serious disciplinary offence, indecent conduct, or repeated breach of work rules.
Unsatisfactory Performance
Excluding temporary incapacity owing to illness, injury or childbirth.
The onus of proof sits with the employer. Where conduct is relied upon, the employer must be able to prove the misconduct and show that the circumstances genuinely justified dismissal.
Grounds That Are Never Lawful
Certain reasons can never support a lawful dismissal, regardless of how they are dressed up. These include trade union membership or activity, the pursuit of a complaint or proceedings against the employer, and discrimination on grounds of race, colour, sex, marital status, religion, political opinion, or national or social origin.
Pregnancy and maternity attract specific protection. From the moment an employee notifies the employer of her pregnancy until three months after maternity leave ends, the employer cannot serve notice or terminate employment. Absence on parental leave, leave for reasons of force majeure, or temporary incapacity within the statutory limits is equally protected.
Notice Periods in Cyprus
An employer terminating an employee who has completed at least 26 weeks of continuous service must give written notice on the following statutory minimum scale:
| Continuous Employment | Minimum Employer Notice |
|---|---|
| 26 to 51 weeks | 1 week |
| 52 to 103 weeks | 2 weeks |
| 104 to 155 weeks | 4 weeks |
| 156 to 207 weeks | 5 weeks |
| 208 to 259 weeks | 6 weeks |
| 260 to 311 weeks | 7 weeks |
| 312 weeks or more | 8 weeks |
The notice must be in writing and must state when it begins and when it ends. The employer may elect to pay wages in lieu of notice and require the employee to leave immediately.
A resigning employee owes notice in return, on a shorter scale:
| Continuous Employment | Employee Notice |
|---|---|
| 26 to 51 weeks | 1 week |
| 52 to 259 weeks | 2 weeks |
| 260 weeks or more | 3 weeks |
No notice is required by either side during probation.
Redundancy and Redundancy Payments
Redundancy is the lawful termination of a role made surplus by operational necessity rather than by anything the employee has done.
An employee with at least 104 weeks of continuous service who is made redundant is entitled to a redundancy payment from the state Redundancy Fund which is financed by employer contributions.
The payment is calculated by reference to continuous service and final wages according to the following scale:
| Years of Continuous Service | Weeks' Pay per Year |
|---|---|
| Up to 4 years | 2 weeks |
| 5 to 10 years | 2.5 weeks |
| 11 to 15 years | 3 weeks |
| 16 to 20 years | 3.5 weeks |
| 21 to 25 years | 4 weeks |
The employee must submit the claim to the Redundancy Fund within three months of dismissal.
Constructive Dismissal
The law looks at substance rather than labels. Where an employee resigns because the employer's conduct has made continued employment intolerable, such as withholding wages, unilaterally altering fundamental contractual terms, or creating a hostile working environment, the resignation may be treated as a dismissal by the employer.
Where constructive dismissal is established, the remedies are generally the same as for unlawful dismissal.
Compensation for Unlawful Dismissal
Where the Industrial Disputes Tribunal finds a dismissal unlawful, or finds a constructive dismissal, it awards compensation.
The minimum compensation is the redundancy payment the employee would have received had the dismissal been a redundancy.
The maximum compensation is two years' wages, albeit the employer is obliged to pay a maximum of one years' wages and the remaining is covered by the Redundancy Fund.
Compensation for unlawful dismissal is assessed on actual earnings rather than the capped figure used for redundancy calculations.
A claim must be filed within twelve months from the date of termination.
Reinstatement
Reinstatement exists as a remedy but is rarely ordered under Law 24/1967.
The Court may order reinstatement where:
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The employer employs 19 or more employees;
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The dismissal was manifestly unlawful or carried out in bad faith; and
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Reinstatement is justified by the circumstances and requested by the employee.
Reinstatement is mandatory in certain discrimination cases under equal treatment legislation.
Continuity of Employment
Continuity of employment is fundamental because most employment rights depend on length of service.
The law preserves continuity during various absences, including:
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Illness;
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Injury;
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Maternity leave;
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Military service;
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Labour disputes;
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Business transfers;
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Parental leave;
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Force majeure leave; and
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Certain temporary cessations of work.
Recent Developments in Cyprus Employment Law (2023–2026)
Transparent and Predictable Working Conditions Law 25(I)/2023
Introduced a maximum six-month probation period, enhanced information obligations, and additional protections relating to working conditions.
Annual Paid Leave Amendment
Leave now accrues from the first day of employment.
National Minimum Wage
As of 1 January 2026:
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€979 gross monthly upon recruitment;
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€1,088 gross monthly after six months of continuous service.
Work-Life Balance and Telework Legislation
Recent reforms have introduced additional obligations which may be relevant in dismissal and constructive dismissal disputes.
Practical Guidance
For Employers
Before dismissing an employee:
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Identify a genuine statutory ground for termination.
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Gather and preserve supporting evidence.
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Follow notice requirements.
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Follow redundancy procedures where applicable.
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Obtain legal advice before dismissing employees on protected leave or with significant service.
For Employees
Employees should remember:
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Protection generally begins after 26 weeks of service.
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Claims for unlawful dismissal must normally be filed within 12 months.
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A forced resignation may constitute constructive dismissal.
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Early legal advice often improves the prospects of a successful claim.
Frequently Asked Questions
How long must I be employed before I am protected against unfair dismissal in Cyprus?
Protection generally applies after 26 weeks of continuous employment with the same employer.
How much compensation can I receive for unlawful dismissal?
The minimum is the equivalent redundancy payment. The maximum is two years' wages.
Who pays redundancy compensation?
Redundancy compensation is paid from the Redundancy Fund, provided the statutory eligibility requirements are met.
Can my employer dismiss me without notice?
Only in limited circumstances involving serious misconduct or similar statutory grounds.
What is the deadline to bring a claim?
A claim for unlawful dismissal must generally be filed within 12 months from termination.
Is reinstatement realistic?
It is available but remains relatively uncommon in practice.
Contact Our Employment Lawyers in Cyprus
Facing a dismissal, a redundancy, or a disputed termination in Cyprus?
Papantoniou & Papantoniou LLC advises employers and employees across the full spectrum of employment termination disputes, including lawful dismissals, unfair dismissal claims, redundancy procedures, constructive dismissal matters, and proceedings before the Industrial Disputes Court.
Our litigation team combines extensive courtroom experience with academic expertise to protect your interests efficiently and effectively.
Contact us today for a confidential consultation.
Papantoniou & Papantoniou LLC
8 Katsoni, Ayioi Omologites
1082 Nicosia, Cyprus
Telephone: +357 22 817711
Email: info@paplaw.com.cy
Website: www.paplaw.com.cy
This article is intended for general informational purposes only and does not constitute legal advice. Specific legal advice should be obtained for individual circumstances.