The Termination of Employment Law was enacted on 27 May 1967 and came into operation on 1 February 1968. The main purpose of this Law is to protect employees against dismissal.

The Termination of Employment Law covers all employees, whether in the private or the public sector, including apprentices. It also covers the shareholders of private companies who are employed by their companies. Employees of the Government of the United Kingdom and of N.A.A.F.I., working in Cyprus, are excepted from the provisions of the Law that govern redundancies, on the ground that such employees are protected by redundancy schemes offered by their employers.

An employer intending to terminate the employment of an employee, who has completed at least 26 weeks of continuous employment with that employer, is obliged to give the employee a minimum period of notice, depending on the length of his service, as follows:

Period of continuous employmentPeriod of notice to be given
26 to 51 weeksone week
52 to103 weekstwo weeks
104 to 155 weeksfour weeks
156 to 207 weeksfive weeks
208 to 259 weekssix weeks
260 to 311 weeksseven weeks
312 or more weekseight weeks

The above notice must be given in writing.

The right of an employee to a longer period of notice, if he is so entitled by custom, law, collective agreement, contract or otherwise, is not affected by the Termination of Employment Law.

The employer is not obliged to give notice, if the employment is on a probationary basis for a period not longer than 104 weeks. Where such period is longer than 26 weeks, notice is not required only where the probationary period has been fixed by written agreement between the employer and the employee at the time of recruitment.

The employer has the right to require the employee to accept payment of his wages, in lieu of the period of notice to which he is entitled.

During the period of notice, the employee, by agreement with his employer, is entitled to time off not exceeding eight hours per week, subject to a maximum of 40 hours in total, without loss of pay, in order to be able to seek new employment.

An employee, who has been given notice, is entitled, if he finds new employment, to leave the employment of his employer without any notice. In such case the employee loses his entitlement to payment for the remainder of the period of notice.

Giving notice to an employee, who is absent from work because of incapacity for work, is prohibited for a period of up to twenty six weeks from commencement of such incapacity.Moreover, the period of notice in the case of an employee, who becomes incapable of work as result of a occupational accident occurring during that period, is suspended. The terms ‘incapable of work’ and ‘occupational accident’ have the meaning assigned to them by the Social Insurance Law.

The employer has the right to terminate the employment of an employee without notice, where the employee’s conduct is such as to justify his dismissal without notice, e.g.:

  • Gross misconduct by the employee in the course of his duties,
  • Commission by the employee in the course of his duties of a criminal offence without the agreement, expressed or implied, of his employer,
  • Immoral behaviour by the employee in the course of his duties and
  • Serious or repeated contravention or disregard by the employee of work or other rules in relation to his employment.

Where the employer does not exercise his right to dismissal without notice within reasonable time, the termination of employment is deemed to be unjustified.

An employer envisaging any act or action that will result in the transfer or posting of the employee to another employer, whether permanently or temporarily, has to notify the employee in writing, and as timely as possible, of his intentions, even where the transfer or posting will not result in a change of duties or place of work.

An employee who intends to terminate his employment, has to give a minimum period of notice to his employer, depending on his duration of employment, as follows:

Period of continuous employmentMinimum period of notice
26 to 51 weeksone week
52 to 259 weekstwo weeks
260 weeks or morethree weeks

 The right of an employer to a longer period of notice, if he is so entitled by custom, collective agreement, contract or otherwise, is not affected by the Termination of Employment Law.

An employee, whose employment is terminated unlawfully after he has completed 26 weeks of continuous employment with an employer, is entitled to compensation. Compensation is also payable in the case of an employee who terminates his employment because of his employer’s conduct.

No compensation is payable in the case of any employee, who, before the termination of his employment, has attained the pensionable age (65).

The amount of compensation is decided by the Labour Disputes Court after an application by the employee, but in no case it can be less than the amount of redundancy payment, to which the employee would be entitled, had he been declared redundant, or higher than two years wages. In assessing the amount of compensation, the Court gives consideration, inter alia, to the emoluments of the employee, the length of his service, the loss of his career prospects, his age and the circumstances of his dismissal.

The amount of compensation up to the wages of one year is payable by the employer and any amount in excess of such wages is payable out of the Redundancy Fund.

An employee is not entitled to compensation, if his employment has been terminated for any of the following reasons:

  • Where the employee has become redundant.
  • Where the termination is due to force majeure, war operations, political rising, act of God, or destruction of the plant by fire not caused by the willful act or negligence of the employer.
  • Where the employment is terminated at the end of fixed term contract or because of the attainment by the employee of the normal retirement age by virtue of custom, law, collective agreement, work rules or otherwise.
  • Where the dismissal is due to the employee’s own fault. The termination of employment is deemed to be due to the employee’s own fault, if he fails to carry out his work in a reasonably efficient manner or conducts himself in manner that renders him liable to dismissal without notice (see under ‘Employer’s obligation to give notice’ above).

It is pointed out that the following can in no case constitute a valid reason for dismissal and dismissal for such reason renders the employer liable to compensation:

  • Union membership or participation in union activities outside the working hours or, with the consent of the employer, within working hours, or participation in a safety committee under the Safety and Health at Work Laws.
  • Seeking office as, or acting or having acted in the capacity of a workers’ representative.
  • Filing of a complaint or participation in proceedings against the employer involving violation of laws or regulations, or appealing to an administrative authority.
  • Race, colour, marital status, religion, political opinion, ethnic extraction or social origin.
  • Pregnancy or maternity.
  • Parental leave or leave for force majeure.

Where the termination of the employment of an employee who has worked for an employer employing 19 or more employees, is considered unlawful and as an act of bad faith, the Labour Disputes Court, may, following an application by the employee concerned and if it thinks fit considering the circumstances of the case, order the re-instatement of that employee, as well as the payment of damages for the actual loss suffered by the employee. The amount of damages cannot exceed the wages of 12 months.