Cyprus Redundancy & Unfair Dismissal Rules 2026

Cyprus employment law gives employees strong protection against unfair dismissal while giving employers clear, workable rules for ending a contract lawfully. Whether you are an employer planning a termination or an employee who has been dismissed, the key questions are the same: how much notice is due, whether the dismissal was lawful, and what compensation may be payable. This guide explains notice periods, redundancy, unfair dismissal and the remedies available under Cyprus law.

The legal framework

The principal statute is the Termination of Employment Law of 1967, Law 24 of 1967, as amended, supported by later employment legislation and the case law of the Industrial Disputes Tribunal. The central protection is straightforward: an employee dismissed by the employer is entitled to compensation for unlawful termination unless the employer proves that the dismissal fell within one of the lawful grounds set out in the Law. The burden of justifying a dismissal rests on the employer.

Two different qualifying periods run through the Law and are often confused. An employee needs 26 weeks of continuous employment to claim unfair dismissal, but 104 weeks of continuous employment to qualify for a redundancy payment.

Minimum notice periods

An employer must give a minimum period of notice based on the employee's length of continuous service. A contract or collective agreement can provide for longer notice, but never shorter.

Below 26 weeks of service there is no statutory notice entitlement. An employer can choose to pay the employee for the notice period instead of requiring them to work it, and can release the employee from duties on pay during the notice period. Notice is not required where the employee is summarily dismissed for serious misconduct.

Redundancy and the Redundancy Fund

A redundancy is a termination for economic, technical or organisational reasons that are unrelated to the employee's conduct, for example the closure of the business or a workplace, modernisation or automation, a fall in the work required, or market difficulties. To qualify for a redundancy payment the employee must have completed at least 104 weeks of continuous employment with the same employer.

The redundancy payment is not paid directly by the employer. It is paid from the state Redundancy Fund, which is financed by employer contributions. The amount is calculated on a rising scale according to length of service:

• 2 weeks of wages for each year of service up to 4 years.
• 2.5 weeks of wages for each year of service from 4 to 10 years.
• 3 weeks of wages for each year of service from 10 to 15 years.
• 3.5 weeks of wages for each year of service from 15 to 20 years.
• 4 weeks of wages for each year of service from 20 to 25 years.

The bands are cumulative, and the calculation uses a statutory ceiling on the weekly wage that is tied to the maximum insurable earnings for social insurance.

Unfair dismissal

An employee who has completed at least 26 weeks of continuous employment can bring a claim for unfair dismissal before the Industrial Disputes Tribunal, commonly called the Labour Court. The claim must generally be filed within 12 months of the date of termination.

Certain dismissals are automatically unfair and can be challenged regardless of length of service. These include dismissal connected with pregnancy or maternity, trade union membership or activity, discrimination on grounds such as sex, race, religion, disability or age, whistleblowing, and the exercise of statutory rights.

The main remedy is compensation, which the Tribunal sets within a statutory range. It cannot be less than the redundancy payment the employee would have received had the dismissal been by reason of redundancy, and it cannot exceed the equivalent of two years of wages. Of that award, up to one year of wages is payable by the employer, and any excess up to the two year ceiling is met from the Redundancy Fund. In setting the figure the Tribunal considers the employee's earnings, length of service, age, loss of career and re employment prospects, and the circumstances of the dismissal. Reinstatement is available only in limited cases, generally where the employer has 20 or more employees and the Tribunal considers it practicable, so compensation is by far the more common outcome.

Lawful grounds and summary dismissal

An employer can rebut the presumption of unfair dismissal by proving that the dismissal fell within a lawful ground. These include genuine redundancy, unsatisfactory performance or incapacity, serious misconduct, the genuine expiry of a fixed term contract, force majeure that makes continued employment impossible, and retirement at the normal retirement age.

For serious misconduct, such as theft, violence or a grave breach of duties, the employer may dismiss summarily, without notice and without payment in lieu. Summary dismissal is reserved for genuinely serious cases, must be acted on promptly, because delay weakens the justification, and the employer bears the burden of proving the misconduct if the dismissal is challenged. A summary dismissal that is disproportionate or procedurally unfair exposes the employer to an unfair dismissal award.

Recent developments

Employers should be aware of several recent changes:

• National minimum wage. From 1 January 2026 the national minimum wage rose to €979 gross per month on recruitment, increasing to €1,088 gross per month after six months of continuous employment with the same employer. Certain categories, such as hotel, domestic, agricultural and maritime workers, remain separately regulated.
• Transparent and predictable working conditions. The Transparent and Predictable Working Conditions Law of 2023, which transposed the relevant European Union directive, expanded the written information employers must give employees, regulated probationary periods and parallel employment, and gave employees with six months of service the right to ask for more predictable and secure working conditions.
• Pay transparency. European Union pay transparency rules are approaching, with a transposition deadline in June 2026, and Cyprus employers should begin preparing for pay reporting and pay gap obligations.

How we help

Our litigation and employment team advises both employers and employees across the full range of termination issues. For employers we design lawful termination and redundancy processes, draft settlement agreements, and defend claims before the Industrial Disputes Tribunal. For employees we assess whether a dismissal was unfair, quantify the likely award, and bring claims within the 12 month deadline. If you are dealing with a termination, a redundancy or a dismissal dispute, contact our team for clear advice on your rights and options.