An employment contract is the foundation of the relationship between employer and employee. In Cyprus, while the law provides certain minimum protections, a well-drafted written agreement is essential to ensure clarity, protect the employer’s interests, and reduce the risk of disputes.

Below, we outline the key terms that every employer should include in an employment contract under Cyprus law.

1. Identification of the Parties

The contract must clearly state the full legal name, address, and registration details of the employer (company or individual) and the employee’s full name and identification details.

2. Job Title and Description

Employers should specify:

• The position/title of the employee.
• A concise description of duties.
• A clause allowing the employer to assign reasonable additional tasks relevant to the role, to ensure flexibility.

3. Place of Work

The contract should indicate the primary workplace. If remote or flexible work is allowed, this should be stated expressly.

4. Commencement Date and Duration

• Commencement date of employment.
• Whether the contract is open-ended, fixed-term, or for a specific project.
• If fixed-term, the duration and conditions for renewal must be clear.

5. Probationary Period

Under Cyprus law, the probation period may extend up to six months, or up to two years if expressly agreed in writing. This provision is critical for employers, as termination rights during probation are more flexible.

6. Working Hours and Overtime

• Specify normal working hours and days.
• Include provisions for overtime, shift work, or flexible arrangements, in compliance with the Organisation of Working Time Law.

7. Salary and Benefits

The contract must set out:

• Gross monthly or weekly salary.
• Payment frequency (e.g. monthly, on the last working day).
• Any allowances, bonuses, commissions, or benefits (such as car allowance, insurance, or pension contributions).

8. Annual Leave and Public Holidays

Employees are entitled by law to at least 20 working days’ annual leave (for a 5-day week) or 24 days (for a 6-day week). Employers should also clarify treatment of public holidays.

9. Sick Leave and Other Absences

The contract should cover:

• Whether the employer provides paid sick leave (in addition to Social Insurance benefits).
• Policies for maternity, paternity, parental, and other statutory leaves.

10. Termination of Employment

A well-drafted contract should specify:

• Notice periods required by either party (subject to statutory minimums).
• The employer’s right to terminate for cause (e.g. gross misconduct, breach of duties).
• Any post-termination obligations (e.g. return of company property).

11. Confidentiality

To protect business interests, the contract should include a confidentiality clause preventing employees from disclosing or misusing sensitive business information during and after employment.

12. Restrictive Covenants (if applicable)

Employers may include non-compete and non-solicitation clauses to protect against unfair competition. These must be reasonable in scope, duration, and geography to be enforceable under Cyprus law.

13. Governing Law and Jurisdiction

The contract should confirm that it is governed by Cyprus law and that any disputes will be resolved before the Courts of the Republic of Cyprus.

Conclusion

Employment contracts in Cyprus are more than a legal formality—they are a vital tool for ensuring stability and protecting the employer’s business. By including the above key terms, employers can reduce uncertainty, comply with statutory requirements, and safeguard their interests.

At VH Law, we draft tailored employment agreements that align with both Cyprus law and the specific needs of your business.