In Cyprus, the employment law framework primarily outlines two types of employment agreements: Indefinite Employment Contracts and Fixed-Term Employment Contracts.

Indefinite Employment Contracts

Indefinite employment contracts are the most prevalent form of employment agreement in Cyprus. These contracts do not have a predetermined end date. Instead, employment continues until either the employer or the employee terminates the contract with a valid justification.

Fixed-Term Employment Contracts

On the other hand, fixed-term employment contracts, which are less common, establish a specific end date for the employment relationship. These contracts offer flexibility for employers with temporary needs. However, Cypriot law restricts their use. Employers can only utilize fixed-term contracts under certain conditions, including:

• Temporary Needs: The specific needs of the company are demonstrably temporary in nature.
• Employee Replacements: The position is intended to fill a vacancy left by another employee on leave or secondment.
• Specific Project Requirements: The nature of the work itself is inherently temporary, tied to a specific project with a defined end date.
• Court-Ordered Employment: The fixed-term nature of the employment is mandated by a judicial decision.

Cypriot employment agreements, while not legally required to be written, are best when clearly and comprehensively documented. These agreements should include essential clauses to safeguard both employers and employees.

Identification of Parties

The agreement should clearly identify both the employer and the employee, including their full names and addresses.

Position and Duties

A clear description of the employee's job title, along with a detailed outline of their duties and responsibilities is essential.

Start Date and Working Hours

The agreement should specify the employment start date and the standard working hours per day and week.

Remuneration and Benefits

A breakdown of the employee's salary structure, including basic pay, bonuses (if applicable), and any benefits offered such as health insurance or travel allowances should be outlined.

Annual Leave

Cypriot law mandates a minimum of 20 days of paid annual leave for a five-day workweek and 24 days for a six-day workweek. The agreement can specify details regarding leave accrual, carry-over policies, and notice periods for requesting leave.

Sick Leave

While there's no statutory entitlement to paid sick leave in Cyprus, the agreement can address any company policies or provisions regarding sick leave.

Notice Periods

The agreement should adhere to the legal minimums for notice periods outlined in the Employment of Persons Law. These vary based on the employee's length of service.

Termination Grounds

The agreement can outline specific grounds for termination by either party, complementing the provisions outlined in the Employment of Persons Law.

Confidentiality

The agreement can include clauses restricting the employee's disclosure of confidential company information.

Intellectual Property

The agreement can specify ownership rights of any intellectual property developed by the employee during their employment.

Dispute Resolution Mechanism

The agreement can establish a process for resolving any workplace disputes that may arise. This may involve internal mediation or referral to the Ministry of Labour for arbitration.

This is not an exhaustive list, and employment agreements can be tailored to address specific needs and company policies. Consulting with a legal professional familiar with Cypriot employment law is highly recommended to ensure the agreement complies with all legal requirements and protects the interests of both parties.

Probationary periods are a standard part of employment contracts in Cyprus. They provide a window for both employers and employees to evaluate suitability during the initial phase of employment.

Maximum Duration

Recent legislative changes have set a new limit on probationary periods in Cyprus. According to the Law on Transparent and Predictable Working Conditions, the maximum duration is now six months. This limit applies to most employees.

Exceptions

There are exceptions to the six-month limit. For instance, the limitation on probationary periods does not apply to employees holding directorial positions such as chairmen, managers, secretaries, etc. Employers have more flexibility in setting probation lengths for these roles. Also, the probation period for fixed-term contracts should be proportionate to the overall contract length.

Extensions

If an employee experiences absences during the probationary period, the probation can be extended by the duration of the absence to ensure a fair assessment.

Termination During Probation

One of the significant advantages of a probationary period for employers is the simplified termination process. During this time, employers can dismiss an employee without needing a specific reason or providing notice. However, they are still obligated to pay any earned wages and accrued vacation entitlement.

Employee Rights

While employers have greater leeway during probation, employees are not entirely without rights. If they believe their dismissal was discriminatory or based on unlawful grounds, they can still challenge it through legal channels.

Importance of Clear Agreements

It's crucial to have a written agreement outlining the specific terms of the probationary period in an employment contract. This document should clearly state the duration, expectations, and consequences of termination during probation for both parties.

Additional Considerations

While Cypriot law dictates the framework, broader European Union (EU) employment directives may also influence interpretations. For complex situations or uncertainties, consulting an employment lawyer in Cyprus is recommended to ensure compliance and protect your rights.

Employment agreements in Cyprus often include clauses designed to protect an employer's confidential information and limit an employee's ability to compete after termination.

Confidentiality Clauses

Confidentiality clauses are a common feature in Cypriot employment contracts. They are designed to protect sensitive business information, such as trade secrets, client lists, or marketing strategies.

Key Points:

• Protection: Cypriot courts will uphold confidentiality clauses as long as they clearly define the confidential information and are reasonable in scope.
• Employee Obligations: These clauses typically outline what information is considered confidential, how employees must handle it, and the consequences of unauthorized disclosure.

Non-Compete Clauses

Non-compete clauses are designed to restrict an employee's ability to work for competitors or start their own competing business after leaving the company.

Legal Restrictions:

Cypriot law is stricter on non-compete clauses compared to confidentiality clauses. Section 27 of the Contracts Law (Cap. 149) generally makes unenforceable any agreement that restricts someone from carrying on a legitimate trade or profession.

Exceptions:

There are limited exceptions where non-compete clauses may be upheld:

• Protection of Legitimate Interests: If the clause protects a company's legitimate interests, such as trade secrets or highly specialized knowledge, it may be enforceable, provided the restrictions are reasonable in terms of geographical scope and duration.
• Senior Employees: Non-compete clauses are more likely to be valid for senior positions with access to critical information or client relationships.

Importance of Legal Advice:

Given the complexities surrounding non-compete clauses, both employers and employees are advised to seek legal counsel when drafting or interpreting such clauses in their contracts.