Employers be aware! Supreme court declares insufficient the unfair dismissal compensation awarded by the industrial disputes court – 25.02.2019

A former employee of a Trading Company (the company) in Cyprus, not satisfied by the amount of compensation awarded in her favour by the Industrial Disputes Court, appealed to the Supreme Court which partly accepted the appeal and increased the amount of compensation which had been awarded at first instance (Civil Appeal 310/2012, dated 13.02.2019).

The employee started working for the respondent company as a cashier on 09.06.2009 and kept this position until 2.5.2011 when the company terminated her employment without any notice. The company did not give any particular reasons for the termination but only asserted in general terms that the employee was performing her working duties negligently and that she failed to follow the procedures of the company.

When the employee’s lawyer requested from the company to give the exact reasons for the termination of the employment, the company replied that the employee’s omissions caused serious financial damage to the company.

The employee applied to the Industrial Disputes Court seeking for compensation for wrongful dismissal. At the hearing the company chose not to produce any evidence. As a result the company did not discharge the rebuttable presumption under section 6(1) of the Termination of Employment Law (Law 24/1967) (as amended) according to which the termination of an employment is considered as unlawful except if the employer proves that it was for one of the reasons that the said Law permits a summary dismissal.

Eventually the Industrial Disputes Court awarded €2.750,00 as compensation plus €550,00 which corresponds to the period of notice which the Company failed to give to the dismissed employee.

The Supreme Court examining the employee’s appeal reiterated the relevant provisions of the Law according to which a Court when assessing the amount of compensation, takes into account the following criteria:

  1. The remuneration of the employee;
  2. The duration of employee’s service;
  3. The restriction of employee’s career prospects;
  4. The age of the employee;
  5. The circumstances of employee’s dismissal;

The Supreme Court found that despite the fact that the Industrial Disputes Court was right in finding that the company had breached Article 7 of the Convention 158 Concerning Termination of Employment at the initiative of the employer (ratified by Law 45/85) which provides that the employer must give an opportunity to the worker to defend himself against any allegations made related to the worker’s conduct or performance, it failed to consider the fact that the company’s allegations through its letters, against the worker were very serious and degrading and stigmatised the appellant as incapable of performing her duties something that undoubtedly had a negative impact on her professional fame and her future carrier especially as a cashier. Consequently the Supreme Court increased the initially awarded compensation up to the amount of €4.125,00.

The Supreme Court’s judgement serves as a reminder to the employers that before they utilise any decision for the termination of the employment of their workers they must follow fair procedures and take carefully their steps towards that direction. In addition any letters served by the employer to their employees related to the termination of the employment must be carefully drafted since these will play an important evidential factor in any future Court Proceedings.