Collective Redundancies
The Law
The Collective Redundancies Law was put into force on 9 March 2001 aiming at the protection of employees in cases of “collective redundancies”.
Scope
The Law applies to cases of “collective redundancies”, as this is defined by the Law (see below). Cases of voluntary termination of employment or termination of employment, as a result of the expiry of a fixed-term contract, do not constitute redundancies.
Collective redundancies and scope
The Law applies to cases of “collective redundancies” according to the definition given therein. In order to ascertain if a case of termination of employment is considered to be a collective redundancy, the following conditions must be fulfilled, simultaneously:
- At least 10 redundancies in establishments normally employing between 21 and 99 employees. In the context of this Law and provided that the redundancies are at least five, all terminations of employment contracts due to any reason are included in calculating the total number of redundancies. Consequently, in the case of an establishment normally employing between 21 and 99 persons, and given that there
are at least 5 persons made collectively redundant, in accordance with the definition given above, the Law applies if there are also 5 (or more) cases of termination of employment contracts.
- In case of establishments normally employing between 100 and 299 persons, the redundancies must be at least ten percent (10%) of the total number of employees that are normally employed.
- In case of establishments normally employing 300 persons or more, the redundancies
must be at least 30.
The minimum number of redundancies effected, in relation to the total number of employees in an establishment, required to ensure the application of the Law can also be seen in the table below:
Employer’s Establishment
Number of Employees Number of Redundancies (a)20 or less The Law does not apply
(b) 21 to 99\10 or more redundancies (if the collective redundancies areat least five, all cases of termination of employment contracts,due to any reason, are included in calculating the total number of redundancies)
(c)100 to 299 Redundancies amounting to 10% of the total number of employees
(d)300 or more Minimum of 30 redundancies
This Law does not apply to:
- the public sector
- semi-governmental organisations
- local authorities
- legal entities covered by public law
Information and consultation
Where an employer is contemplating collective redundancies, he should begin consultations with the employees’ representatives with a view to reaching an agreement. These consultations should, at least, cover the following:
Additionally, the employer should supply the employees’ representatives with all relevant information to enable them to make constructive proposals, during the consultation procedure. Among other things, the employer should notify, in writing, the following:
Notification to the Ministry
The employer should forward to the Minister of Labour and Social Insurance a copy of the above-mentioned information (the method of calculation of potential payments may be omitted). In addition, the employer should notify the Ministry of Labour and Social Insurance, in writing, of any information concerning the collective redundancies planned and the consultations with employees’ representatives (as provided for by the Law), the soonest possible, specifically so on the following:
Enforcement of redundancies
The collective redundancies planned, take effect not earlier than 30 days from the date of the notification to the Minister of Labour and Social Insurance. At the same time, the notice of dismissal provided for by the Termination of Employment Law should be complied with. The Ministry of Labour and Social Insurance, during this period, seeks solutions to the problems raised by the collective redundancies. In cases where the collective redundancies are caused by the termination of an establishment’s activities, following a decision of the Court, the 30 day-deadline does not apply.
Penalties in the case of Law violations
All information provided in the context of this Law is considered to be confidential. Anyone who breaches the provisions of the Law relating to confidentiality is subject to a monetary penalty that may not exceed the amount of €1.708. In addition, any employer violating any provisions of the Law in respect of information, consultation and notification (i.e. fails to inform the employees’ representatives or fails to provide relevant information promptly, etc.), is guilty and in the case of conviction is subject to a fine of up to the amount of €1.708. In case that the collective redundancies are effected before the 30-day period is over, the employer is subject to a fine of up to the amount of €3.417.
Compensation for termination of employment
The employees’ entitlement to compensation in accordance with the Termination of Employment Law remains unaffected by the provisions of this Law.
The Collective Redundancies Law was put into force on 9 March 2001 aiming at the protection of employees in cases of “collective redundancies”.
Scope
The Law applies to cases of “collective redundancies”, as this is defined by the Law (see below). Cases of voluntary termination of employment or termination of employment, as a result of the expiry of a fixed-term contract, do not constitute redundancies.
Collective redundancies and scope
The Law applies to cases of “collective redundancies” according to the definition given therein. In order to ascertain if a case of termination of employment is considered to be a collective redundancy, the following conditions must be fulfilled, simultaneously:
- The redundancies must be effected by the employer.
- The reasons for the redundancies (which may be one or more) should not be related to the individual employee. For instance, redundancies due to economic or technical reasons would satisfy this criterion since they are not attributed to the employee himself/ herself, whereas redundancies made as a result of a breach of workplace rules or an offence committed by the employee, would not and therefore do not fall within the scope of this Law.
- The number of redundancies effected within a period of thirty days, in respect to the number of workers employed, should be as follows:
- At least 10 redundancies in establishments normally employing between 21 and 99 employees. In the context of this Law and provided that the redundancies are at least five, all terminations of employment contracts due to any reason are included in calculating the total number of redundancies. Consequently, in the case of an establishment normally employing between 21 and 99 persons, and given that there
are at least 5 persons made collectively redundant, in accordance with the definition given above, the Law applies if there are also 5 (or more) cases of termination of employment contracts.
- In case of establishments normally employing between 100 and 299 persons, the redundancies must be at least ten percent (10%) of the total number of employees that are normally employed.
- In case of establishments normally employing 300 persons or more, the redundancies
must be at least 30.
The minimum number of redundancies effected, in relation to the total number of employees in an establishment, required to ensure the application of the Law can also be seen in the table below:
Employer’s Establishment
Number of Employees Number of Redundancies (a)20 or less The Law does not apply
(b) 21 to 99\10 or more redundancies (if the collective redundancies areat least five, all cases of termination of employment contracts,due to any reason, are included in calculating the total number of redundancies)
(c)100 to 299 Redundancies amounting to 10% of the total number of employees
(d)300 or more Minimum of 30 redundancies
This Law does not apply to:
- establishments that employ twenty (20) or a smaller number of persons (as seen in the above table)
- collective redundancies effected under fixed-term contracts of employment, or contracts of employment concluded for specific tasks, except where such redundancies take place prior to the date of expiry or the completion of such contracts
- crews of sea-going vessels
- workers employed by:
- the public sector
- semi-governmental organisations
- local authorities
- legal entities covered by public law
Information and consultation
Where an employer is contemplating collective redundancies, he should begin consultations with the employees’ representatives with a view to reaching an agreement. These consultations should, at least, cover the following:
- ways and means of avoiding collective redundancies or reducing the number of employees affected, and
- ways and means of mitigating the consequences of the collective redundancies (through social measures aiming, amongst others, at the retraining of affected employees and their reintegration in the labour market).
Additionally, the employer should supply the employees’ representatives with all relevant information to enable them to make constructive proposals, during the consultation procedure. Among other things, the employer should notify, in writing, the following:
- the reasons for the redundancies planned
- the number and categories of employees to be made redundant
- the number and categories of employees normally employed
- the period over which the redundancies are to be effected
- the criteria for selection of the employees to be made redundant (which are set as an obligation of the employer, in compliance with existing legislation and practice)
- the method of calculation of potential payments in relation to the redundancies, if other than the method provided for by the Termination of Employment Law of 1967 to 1994.
Notification to the Ministry
The employer should forward to the Minister of Labour and Social Insurance a copy of the above-mentioned information (the method of calculation of potential payments may be omitted). In addition, the employer should notify the Ministry of Labour and Social Insurance, in writing, of any information concerning the collective redundancies planned and the consultations with employees’ representatives (as provided for by the Law), the soonest possible, specifically so on the following:
- the reasons for the redundancies planned
- the number of employees to be made redundant
- the number of persons normally employed
- the period over which the redundancies will be effected.
Enforcement of redundancies
The collective redundancies planned, take effect not earlier than 30 days from the date of the notification to the Minister of Labour and Social Insurance. At the same time, the notice of dismissal provided for by the Termination of Employment Law should be complied with. The Ministry of Labour and Social Insurance, during this period, seeks solutions to the problems raised by the collective redundancies. In cases where the collective redundancies are caused by the termination of an establishment’s activities, following a decision of the Court, the 30 day-deadline does not apply.
Penalties in the case of Law violations
All information provided in the context of this Law is considered to be confidential. Anyone who breaches the provisions of the Law relating to confidentiality is subject to a monetary penalty that may not exceed the amount of €1.708. In addition, any employer violating any provisions of the Law in respect of information, consultation and notification (i.e. fails to inform the employees’ representatives or fails to provide relevant information promptly, etc.), is guilty and in the case of conviction is subject to a fine of up to the amount of €1.708. In case that the collective redundancies are effected before the 30-day period is over, the employer is subject to a fine of up to the amount of €3.417.
Compensation for termination of employment
The employees’ entitlement to compensation in accordance with the Termination of Employment Law remains unaffected by the provisions of this Law.