Cyprus Implements Transparent and Predictable Working Conditions Law in Alignment with EU Directive

Cyprus has recently taken a significant step towards promoting transparency and predictability in the workplace by enacting the Transparent and Predictable Working Conditions Law of 2023 N.25(I)/2023, commonly referred to as the “Law.” This new legislation, which came into effect on April 13, 2023, replaces the previous law governing the provision of employment information to workers. The primary aim of this directive is to address labor market challenges stemming from demographic changes, digitalisation, and evolving employment patterns. In response to this directive, member states, including Cyprus, are required to pass laws that promote transparency, predictability, and the introduction of minimum rights and regulations related to providing information to employees.

Under the newly enacted Law, employers are now mandated to provide employees with a comprehensive written statement that outlines essential aspects of the employment relationship. This statement includes crucial information such as the parties involved, the location of work, job title or description, start date, salary breakdown, payment frequency and method, details of any probationary period, working hours, and more. Employers must furnish this statement before the commencement of the employment contract or within seven days of employment initiation. Additionally, employers must provide additional information, including training entitlements, annual leave details, collective agreements, social security information, and termination procedures, within one month from the start date. Employees working outside Cyprus or posted workers may require specific information pertinent to their circumstances.

The Law also introduces restrictions on probationary periods, capping them at a maximum of six months, except for employees in directorial positions. Previously, probation periods could extend up to two years. Fixed-term contracts must now have a proportionate probation period, and any absences during this period may extend its duration.

To promote fair treatment, the Law explicitly prohibits employers from hindering employees from engaging in parallel employment outside their regular work schedule or subjecting them to unfavourable treatment due to such employment. Nevertheless, there are exceptions based on objective grounds such as health and safety, protection of trade secrets, or conflict of interest.

Moreover, the Law recognises the concept of employees with unpredictable work arrangements and establishes specific rights to safeguard their interests. Employers are required to inform employees about variable work schedules, guaranteed paid hours, compensation for additional hours worked, working hours or days they may be required to work, and the minimum notice period before commencing an assignment. These rights aim to provide a minimum level of predictability for employees with highly flexible work schedules. Additionally, employees have the right to refuse work assignments that exceed predetermined limits without facing adverse consequences, and they are protected against income loss resulting from late cancellations by the employer.

While the Law permits on-demand contracts, including zero-hour contracts where working hours are not predetermined and employees work on a casual basis, it is important to note that it does not apply to employment relationships where the average working hours over a four-week period are three hours or less per week.

Furthermore, the Law introduces additional provisions to protect employees’ interests. Employees who have successfully completed the probation period can request employment with more predictable and secure working conditions. Moreover, employers are required to provide work-related training as required by law or collective agreement, free of charge, and consider it as working time whenever feasible.

It is crucial for employers to understand that violations of the Law may result in fines, with a maximum penalty of €5,500.

To ensure compliance with this new legislation, employers are strongly advised to review and update their employment contracts, particularly regarding probationary periods, parallel employment clauses, and conflict of interest policies. Additionally, employers should carefully review their training requirements to align them with the Law’s provisions. By taking these proactive steps, employers can ensure they are in line with the new legal requirements while promoting transparent and predictable working conditions for their employees.