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Compensations from the employer due to redundancy

Question:


I have been working in the company for more than two years, and recently I was
given a letter with a notice of dismissal on grounds of redundancy. Can I apply for
any compensation and in what amount? Is there any law protecting the rights of single
mothers (my child is one year and seven months old, and he is a citizen of Cyprus)?


What authority I should contact in case of refusal of paying compensation?


Response:


In case you have been working for at least 104 weeks for the same employer and your
employment is terminated due to redundancy, before the attainment of the
pensionable age, you are entitled to a redundancy payment out of the Redundancy
Fund.


It is also pointed out that seasonal employment with the same employer for at least 15
weeks on average over the period of such employment is deemed to be continuous.
An employee is redundant when his employment is terminated for any of the
following reasons:

  1. Because the employer has ceased or intends to cease to carry on the business
    in which the employee was employed.
  2. Because the employer ceases or intends to cease to carry on business in the
    place in which the employee was employed.
  3. Because of any of the following other reasons concerned with the operation of
    the business:
  • Modernization, mechanization, or any other change in the methods of
    production or organization, which reduces the number of employees
    necessary;
  • Changes in products or production methods or in the skills needed on the part
    of the employees;
  • Closing of departments;
  • Marketing or credit difficulties;
  • Lack of orders or raw materials;
  • Scarcity of means of production;
  • Contraction of the volume of work or business.
    An employee is not entitled to redundancy payment, even if he has been declared
    redundant, where,
  • The employer, before terminating the employment, makes an offer of suitable
    alternative employment and the employee unreasonably refuses this offer.
  • The employment has been terminated as a result of the transfer of the business
    to another employer, who has renewed the contract of employment.
  • The employer is a registered company under the Companies Law and the
    employee is transferred to a suitable post in another company associated with
    the former company. Two companies are treated as associated companies, if
    one of them is a subsidiary of the other or, if both of them are subsidiaries of a
    third company. The term ‘subsidiary’ has the meaning assigned to it by section
    148 of the Companies Law (Cap.113 as amended).
  • Before the termination of employment another employer, who is company in
    which the employer is the main shareholder or exercises substantial control,
    offers the employee suitable employment.
    The amount of redundancy payment is calculated taking into account the period of the
    employee’s continuous service and his final wages, as follows:
  • PERIOD OF CONTINUOUS EMPLOYMENT AMOUNT OF REDUNDANCY PAYMENT

    Up to 4 years 2 weeks wages for each year of continuous employment
    More than 4 and up to 10 years 2 ,5 weeks wages for each period of continuous employment
    More than 10 and up to 15 years 3 weeks wages for each year of continuous employment
    More than 15 and up to 20 years 3,5 weeks wages for each year of continuous employment
    More than 20 and up to 25 years 4 weeks wages for each year of continuous employment
  • Where the claimant is a shareholder of a private company and is employed by
    this company otherwise than under a contract of employment or under such
    circumstances from which an employer employee relationship may be derived,
    the redundancy payment is equal to one percent (1%) of his weekly wage
    multiplied by 52 and by the number of years of employment.
  • Where the total period of employment exceeds a number of complete years,
    any fraction of the year of 26 weeks or more is deemed to be a complete year.
  • Where the redundant employee has attained the age of 64 years, the
    redundancy payment is reduced by 1/12 for each completed month by which
    the age of the employee exceeds 64 years.
    Where the employee is entitled at the same time to redundancy payment both out of
    the Redundancy Fund and from his employer by custom, law, collective agreement or
    contract, the employee receives the amount payable out of the Redundancy Fund and
    from his employer any amount by which the payment due by him exceeds the
    payment out of the Fund.
    It is clarified that payment out of the Redundancy Fund is not considered as payment
    by the employer.
    The period of employment is calculated in weeks. The following weeks count in
    computing the period of employment:
  1. A week in which the employee has worked 18 hours or more.
  2. A week in which the employee was:
  • Unable to work because of sickness, injury or pregnancy,
  • Absent from work because of temporary cessation of work,
  • Absent from work in circumstances such as, by arrangement, custom or law,
    the employer – employee relationship is considered by the Labor Disputes
    Court continued.
  • Absent from because of parental leave.
    For the purposes of calculating the period of employment of seasonal workers only
    weeks of actual work are taken into account. As a general rule only periods of
    employment with the employer who terminates the employee’s employment are taken
    into account. However, when the business is transferred from one employer to another
    or where the employee is transferred from one company to another associated
    company, or to a company essentially controlled by the same persons as the transferor
    company, account is taken of the employee’s employment with all such employers.
    In order to receive payment out of the Redundancy Fund, you must make a claim on
    the prescribed form, which you can obtain from the nearest Social Insurance Office,
    Citizen’s Service Centre or through the internet. The claim must be submitted to the
    nearest Social Insurance Office, within three months at latest from the date of
    termination of the employment. However, in exceptional cases, where the employee
    shows that he had a good reason for the delay, payment may be approved provided
    that the claim is made within 12 months from the date of termination of his
    employment.

  • In case your request will be rejected or you have objection for the decision of
    Redundancy Fund, you may appoint a Lawyer in order to bring a Lawsuit at the Labor
    Disputes Court to decide on disputes arising out of the application of the Termination
    of Employment Law.