Cyprus Employment Contracts
If a foreign company is looking to hire resident employees as part of their Global Expansion into Cyprus, they must comply with recruitment regulations such as tax, social security contributions and local employment laws, as well as collaborate with or adhere to any collective bargaining, trade unions or work council agreements.
In Cyprus, employment agreements are determined in written employment contracts, although it is not mandatory by law. There are two types of employment contracts – the indefinite contract and the fixed-term contract.
National legalization and collective agreements are the main sources of employment law in Cyprus, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.
Labour law in Cyprus ensures the protection of both the employer and the employee. The employment relationship and its terms are hierarchically determined by the national Constitution, international laws with the EU, local labour law, collective bargaining and agreements, employment rules and business practices, and lastly, the individual employment contract.
Employment Contracts in Cyprus
In Cyprus, an employment contract is not required to be concluded in writing, but the law does oblige the employer to provide the employee with an agreement that must be signed by both parties and include specific information regarding the terms of their employment:
- Personal/contact information about both parties
- The registered address of the business and the employee’s place of work
- The employee’s position and position and work duties
- The contract’s start date and its duration (if a fixed-term contract)
- Notice periods
- Annual leave entitlement
- All payments the employee is entitled to and their payment schedule
- Working times for the employee’s working days and weeks
- Application of collective agreements, if applicable
However, if employment contracts are used, there are two types of contracts that are applied in Cyprus:
- Indefinite employment contract – the standard type of employment contract in Cyprus, which is used for indefinite employment.
- Fixed-term employment contract – not as widely practised, but still used in Cyprus, and only for a specific period. This type of agreement must be agreed to by both parties.
The employer must inform the employee of any changes to the employment agreement’s terms and conditions within 1 month of the changes being made. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so. However, in the case of worsening employee conditions after the amendments, an employee can claim enforced resignation and take the matter to the Industrial Disputes Tribunal.
Collective bargaining and agreements in Cyprus are widely practised. In the public and semi-public sectors, coverage by collective agreements is close to 100%.
Collective bargaining in Cyprus takes place both at the industry level and company level.
Workers are not obligated by law to be represented by one or more trade unions, but it is common for certain industries to be represented by trade unions as well as have collective agreements in place to regulate the employment status of the workers. The main industries that are represented include the building industry, transport sector, hotels, dockworkers, maritime workers, and farmers.
Whilst industry-level collective agreements continue to maintain their importance, many companies (both inside and outside the coverage of the industry-level agreements) negotiate at the company level.