1. Salary, commissions and ex-gratia payment in Cyprus
“Salary” means any monetary remuneration arising from the employment of an employee and any profit from such employment which is capable of monetary valuation. It includes contributions to the Provident Funds and the Central Leave Fund. It does not include extraordinary commissions or ex-gratia payments.
Ex-gratia payment paid to employees may not be considered remuneration and consequently may not be considered part of the salary. Regular monthly or annual ex-gratia payments such as Christmas etc, in addition to the monthly salary, may have the characteristics of the salary
2. Sick leave payment
The duration of sick leave and whether it will be remunerated or not is a matter of agreement between employer and employee. In the absence of such an agreement, the employer is not obliged to supplement the sickness benefit and/or the first 3 days for which no sickness benefit is paid by the Social Security Services. There is an exception for employees in hotels and leisure centers where by law they are entitled to sick leave with full remuneration from their employers, depending on their period of employment.
If the employee has worked for a period of fewer than 48 weeks, then the annual leave they are entitled to be reduced accordingly. If he has worked for a period of less than thirteen (13) weeks during the year then he is not entitled to leave.
3. Payment of 13th and/or 14th salary
There is no obligation to pay the 13th and/or 14th salary. The 13th and/or 14th salary is paid in cases where:
- is included in a collective agreement
- is included in an individual contract or employment agreement or another form of agreement
- is part of the practice followed by the company.
4. The minimum notice of termination of employment by the employer
The minimum notice of termination of employment by the employee must be given in writing:
|Continuous Employment Period
|Minimum Warning Period
|From 0 to 26 weeks (up to 6 months)
|From 26 to 51 weeks (6 months – 1 year)
|From 52 to 103 weeks (1-2 years)
|From 104 to 155 weeks (2-3 years)
|From 156 to 207 weeks (3-4 years)
|From 208 to 259 weeks (4-5 years)
|From 260 to 311 weeks (5-6 years)
|From 312 weeks and above (6 years +)
5. Notification to be given by the employee to the employer in the event of resignation
In the event that the employee terminates his / her employment on his / her own initiative, the following minimum notice must be given in writing
|Continuous Employment Period
|Minimum Warning Period
|From 26 to 51 weeks (6 months – 1 year)
|From 52 to 259 weeks (1-5 years)
|From 260 weeks and above (5 years +)
6. Dismissal of an employee by the employer without notice
The employer is not obliged to give notice of dismissal to an employee only if:
- The conduct of the employee is such that it makes clear that the relationship between employer and employee cannot continue,
- Serious misconduct was committed by the employee in the performance of his duties
- A criminal offense was committed by the employee in the performance of his duties, without the consent of the employer,
- The conduct of the employee during the performance of his duties was indecent
- There has been a serious or repeated breach or ignorance of employment regulations.
7. Payment of an employee from the Redundancy Fund
An employee is entitled to payment from the Redundancy Fund when his employment is terminated in the following cases:
- The employer has terminated or intends to terminate the conduct of the business in which the employee was employed,
- The employer has terminated or intends to terminate the conduct of the business at the place where the employee was employed. The Labor Disputes Tribunal may, however, rule that a change of place of employment does not give rise to redundancy when, in the court’s view, it is reasonable for the employee to continue in the new place of employment.
- Due to modernization, mechanization, or any other change in production methods or organization which reduces the number of necessary employees,
- Due to changes in the products or production methods or in the necessary specializations of the employees,
- Due to the abolition of departments of the company,
- Due to difficulties in placing products on the market or credit difficulties,
- Due to lack of orders or raw materials,
- Due to lack of means of production,
- Due to limited workload or business.
8. Warning by the employer for termination of employment while the employee is absent from work with sick leave
The provision of a warning to an employee who is absent from work for a period of up to one year (12 months) with sick leave is prohibited during this period plus 1/4 of the time of the period of absence. For example, if an employee is on sick leave for 8 months, then the employer cannot dismiss him for a period of 10 months from the start of the sick leave.
9. Mandatory written notification from the employer to the employee about the basic terms of the contract
The employer is obliged to inform the employee in writing about the basic terms of his contract or employment relationship no later than one month from the beginning of the work. Among other things, special emphasis should be given to:
- Τhe position or specialty of the employee,
- The duration of the paid leave to which the employee is entitled, as well as the manner and time of its granting,
- The duration of his normal daily or weekly employment.
The employer is not entitled to unilaterally modify essential terms of employment of the employee which are more unfavorable than the original terms Salary reductions can only be made as a result of a collective agreement.
10. Annual leave
An employee working on a five-day weekly basis is entitled to at least 20 working days of annual leave and an employee working on a six-day weekly basis is entitled to at least 24 days of annual leave. Specifically, the annual leave is at least 4 weeks. During the annual leave, the employee is paid either directly by his employer or by the Holiday Fund.
Part-time employees are entitled to at least 4 weeks of annual leave as full-time employees.
The accumulation and transfer of annual leave to the next year is a matter of agreement between the employer and the employee through a Collective Agreement or a personal contract or practice of the company.
The Central Leave Fund was established specifically for this purpose under the Law and employers are required to pay contributions to it, unless they are exempted because they provide more favorable terms to their employees than those provided for by law, i.e. 21 days and 25 days respectively. In some cases, the labor department has the right to reject the exemption request and demand the corresponding increased payment.
11. Sick leave
The duration of sick leave and whether or not it will be remunerated is a matter of agreement between employer and employee either through a Collective Agreement, or a personal contract, or a relevant agreement or practice of the company. In the absence of such an agreement, the employer is not obliged to supplement the sickness benefit and/or the first 3 days for which no sickness benefit is paid by the Social Security Services.
12. Normal working hours of employees per category
|Normal working hours of employees per category
|38 – 40
|Leisure centers (6-day work)
|8 (10 subject to conditions)
|Hotels (By Law)
|Hotels (Based on Collective Agreement)
|Foreign students (Work in areas specified by Decree of the Minister of Labor)
13. Regulations on how to pay salaries to employees
The employer is obliged to pay the employee’s salary (a) to a bank or payment account of the employee’s choice or (b) by bank check in the name of the employee.
In the cases of persons for whom the completion of the process of opening a bank account or payment account is pending, the employer may pay the salary in cash for a period not exceeding four months from the date of employment of the employee.
The salary may be paid in cash provided that the employer pays the salary on a weekly basis and has entered into a collective agreement or other written agreement with the employee, which provides that the salary may be paid on a weekly basis. In the case of a written agreement, it bears the signatures and the names of the employer and the employee in writing, and the said collective agreement or written agreement is sent within fifteen calendar days to the Ministry of Labor and Social Insurance.
Obligations of employer
The employer has an obligation to (a) issue a payroll statement, (b) give the employee a copy of the statement on paper or electronically, within five working days from the date of salary payment, (c) keep a record of the statements which if requested is sent within fifteen calendar days from the date of the relative request to the Ministry of Labor and Social Insurance
How Can We Help
Please contact us to share any questions you have about the above topic
Tel. +357 22 340000
Email: [email protected]
The authors expressly disclaim all and any liability and responsibility to any person, entity, or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication.
Accordingly, no person, entity, or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.