- Phase
- Law 25(I)2001 - The Protection of the Rights of Employees in the Event of Insolvency of the Employer Law of 2001, as amended by by law 14 (I)2006, law 89(I)2006 and law 20(I)/2008, law 13(I)/2014, law 37(I)/2023
- Native name
- Ν. 25(I)/2001 - Ο περί της Προστασίας των Δικαιωμάτων των Εργοδοτουμένων σε Περίπτωση Αφερεγγυότητας του Εργοδότη Νόμος του 2001, όπως τροποποιήθηκε από Ν. 14(I)/2006, Ν. 89(I)/2006, Ν. 20(I)/2008, N. 13(I)/2014, Ν. 37(Ι)/2023
- Type
- Wage guarantee in case of insolvency
- Added to database
- 08 May 2015
Article
Articles 3.1 and 4.1 of law 25(I)/2001; Article 2 of law 13(I)/2014; Article 3 of the Protection of the Rights of Employees in the Event of Insolvency of the Employer Law of 2001 to 2023, as amended by law 37(I)/2023
Description
The law regulating the protection of employees' rights in case of employer's insolvency aims to protect workers in the event of bankruptcies. In particular, all outstanding payments by employers to employees are safeguarded thanks to a special fund established for this particular purpose. The fund is financed exclusively by employers' contributions: 16.6% of employers' contributions paid to the redundancy fund (correspond to approximately 0.2% of total gross salaries) are reserved for the insolvency fund.
Over a period of 78 weeks prior the date the employer's insolvency commenced, the employee is entitled to the following payments from the fund:
- the overdue wages of up to 13 weeks of employment prior to the insolvency declaration;
- the equivalent of all unclaimed paid leave for the above mentioned 13 weeks (in the event that the employer possesses a certificate of exemption from payment of contributions to the Central Holidays Fund);
- the equivalent of the 13th and 14th salary or the wages of the 53rd–54th weeks for the same period.
Excluded from eligibility for payments from the fund are employees that:
- employees who have special links and common interests with their employer, leading to collusion between employee and employer;
- employees who are shareholders and members of the board of directors;
- employees of the naval, military and air forces of the UK government;
- employees who do not habitually reside in Cyprus;
- employees who alone or with first generation relatives own a substantial part of the business;
- officers working for the government.
Citation
Eurofound (2015), Cyprus: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin,
https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/cyprus