Last updated on 28 June 2023
The EU Directive on transparent and predictable working conditions in the European Union was transposed into national legislation with The Transparent and Predictable Working Conditions Law of 2023 N.25(I)/2023 (the “Law”), which is in force since 13/04/2023.
The Law constitutes a very important new harmonising labour legislation, which has abolished the Provision of Information to Employee by the Employer on the Conditions Applicable to Employment Contract or Relationship Law of 2000.
The main aim of the Directive was to respond to labour market challenges triggered by demographic developments, digitalisation and new forms of employment and therefore, Member States, including Cyprus, had to pass legislation forcing employers to make working conditions more transparent and predictable, and to introduce new minimum rights and new rules on the information to be provided to employees about their working conditions.
Below we have summarised the basic provisions of the Law:
1. Written Statement of Terms
Employers must provide to employees in writing and keep relevant record of delivery of the essential aspects of the employment relationship being, amongst others as exhaustively described in the Law, the identity of parties and place of work, title/category of work or description of work, commencement date, salary and all component elements each of which should be indicated separately, frequency and method of payment, duration and conditions of any probation period, hours of work and overtime/shifts arrangements etc, before the commencement of the contract or within maximum of seven (7) days from the commencement of employment.
Where applicable, employers must also provide employees with additional information within one (1) month from the commencement of employment, which may include training entitlements, details about annual leave, existence of collective agreements, details about the relevant social security institution and protections relating to social security provided by the employer, termination procedures and notice period information.
The above additional information should be given only upon application of the employee if employees were already employed on the date of enforcement of the Law. For new employees, the employer is required to be proactive based on the above timeframes.
2. Probationary Periods
It has been a long-lasting principle of Cyprus labour law that the probation period in Cyprus could be extended for up to 2 years (104 weeks). The new Law drastically changes that, as it provides that probationary periods cannot exceed six (6) months. The above limitation is not appliable to employees having the capacity of a director (i.e. chairmen, manager, secretary or other similar posts).
For fixed term contracts, the duration of the probation period must be proportionate. In cases where an employee was absent from work during the probationary period, it can be extended based on the duration of the absence. This clarifies a previous legislative uncertainty.
3. Parallel Employment
Careful consideration should also be be given to any parallel employment provisions in employment terms. The Law provides that an employer cannot prevent an employee from working for another employer, outside their work schedule or treat an employee adversely due to this. The exception is where the restriction imposed is proportionate and based on objective grounds which may be health and safety, protection of trade secrets, avoidance of conflict of interest.
Given that the Law does not create an overall ban, it is advised that employers update their contractual clauses as well as their conflict of interest policies and non- compete agreements.
4. Minimum Predictability of Work
Very importantly, the Law introduced the concept of employees with unpredictable working arrangements and has set out specific information rights.
These include informing that their work schedule is variable, the number of guaranteed paid hours, the pay for additional hours worked, the working hours/days that they may be required to work and the minimum advance notice they are entitled to before starting any work assignment. These rights give the benefit of a minimum level of predictability where the work schedule is very flexible.
These employees have the right to refuse a work assignment if it falls outside the above limits without suffering adverse consequences for this refusal. At the same time, the Law protects employees against loss of income resulting from the late cancellation by the employer.
5. On-demand contracts
The Law allows on-demand or similar employment contracts that working hours are not predetermined, including zero-hour contracts, under which the employer has the flexibility of calling the employee to work as and when needed provided that the employee works on a casual basis as defined in the Law.
It is worth noting here that the Law does not apply to employment relationships with agreed and actual working hours of an average of three hours per week or less in a reference period of four consecutive weeks.
6. Additional provisions
Some additional rights that have been introduced are that an employee who has completed the probation period may request a form of employment with more predictable and secure working conditions.
Also, if an employer is required by law or collective agreement to provide training necessary for carrying out the work, such training shall be provided free of cost and shall count as working time. Where possible, this training should take place during working hours.
7. Penalties
Employers should be aware that violation of any of the provisions of the Law shall render them liable, in case of conviction, for a fine not exceeding €5,500.
8. Action
Given this new legislation, as well as additional recent legislative amendments (please click here to read our recent newsletters), with more changes coming with the EU Pay Transparency Directive, we recommend that employers should, amongst others:
- Review their employment template contracts to ensure compliance and implementation;
- Review their probationary periods and ensure that there are adequate controls in place to monitor and assess performance during a six-month probationary period;
- Where applicable, review workplace training requirements;
- Ensure employees are provided with the necessary information within the correct timeframes.
- Review parallel work clauses as well as conflict of interest policies and non- compete agreements with employees.
Nadia Tryfonidou
Partner - Head of Employment and Pensions
Andria Panayiotou
Senior Lawyer