Cyprus termination of employment is governed by the Termination of Employment Law (Cap. 154) and subsequent amendments. Statutory notice periods range from one week for employees with less than 26 weeks of continuous service to eight weeks for employees with over 312 weeks of service. Employees dismissed without the required notice are entitled to payment in lieu. Employees who resign or are dismissed for gross misconduct are generally not entitled to redundancy compensation.
Statutory redundancy pay is funded through the Redundancy Fund, to which employers contribute as part of their overall social insurance obligations. When a genuine redundancy situation arises, the employer applies to the Redundancy Fund for reimbursement of the statutory redundancy amount owed to the dismissed employee. The statutory entitlement is calculated based on the employee's length of service and last weekly wage, subject to a statutory maximum. Employees must have at least 26 weeks of continuous employment to qualify.
In addition to statutory entitlements, many Cyprus employment contracts include enhanced severance provisions or reference a provident fund balance as part of the total exit package. Employers should ensure that any contractual severance terms are clearly documented to avoid disputes and that all final payments, including accrued holiday pay and pro-rated 13th-month entitlements, are settled on termination.