The acquisition of a business undertaking in Cyprus may result in the automatic transfer of employees of that undertaking to the acquiring undertaking under the Preservation and Protection of the Rights of Employees on the Transfer of Undertakings Law (L. 104(I)/2000) (TUPE).
TUPE applies to a transfer of an economic entity that retains its identity, meaning an organised grouping of resources with the objective of pursuing an economic activity, whether or not that activity is central or ancillary.
Under TUPE, the target undertaking’s rights and obligations (as an employer) under the contracts of employment are transferred to the acquiring undertaking. Additional rules apply when collective agreements are in place.
On transfer of all (or part of) a business to which TUPE applies, the businesses involved are subject to employee notification and consultation obligations. Employees affected by the transfer, or their representatives must be informed of the:
- Date or proposed date of the transfer.
- Reasons for the transfer.
- Legal, economic and social implications for the employees.
- Measures envisaged in relation to the employees, if any.
An employer intending to implement a collective dismissal has a statutory obligation to notify the competent authorities and engage in consultations with employee representatives as soon as possible to reach a settlement agreement.
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