Section 7 of Law 98(I)/2003 deems a fixed-term contract to be of indefinite duration once thirty months are behind it, unless the employer proves an objective reason.
An employee on a fourth or fifth annual contract usually assumes the position is whatever the latest piece of paper says it is. In Cyprus it often is not. The Fixed-Term Employees (Prohibition of Less Favourable Treatment) Law of 2003, Law 98(I)/2003, contains a counting rule that changes the character of the contract without anybody signing anything.
The rule, and the number
Section 7(1) operates where two things are true together. The employer employs a person on a fixed-term contract, whether on renewal or otherwise. And that employee had previously been employed for a total period of thirty months or more on fixed-term contracts, irrespective of the sequence of successive fixed-term contracts.
Where both are true, the contract is deemed for all purposes to be a contract of indefinite duration, and any provision in it limiting its duration has no effect.
Three words in that are worth pausing on. Deemed means the effect does not depend on anyone agreeing to it. For all purposes means it is not confined to one question, such as notice or redundancy. And irrespective of the sequence means gaps and rearrangements between contracts do not restart the count: what is measured is the total.
The exception, and who has to prove it
The deeming is subject to one thing: unless the employer proves that the fixed-term employment can be justified on objective grounds. The burden sits with the employer, and it arises only once the thirty months are established.
Section 7(2) lists where objective grounds exist in particular:
- the needs of the undertaking for the performance of a task are temporary;
- the employee is replacing another employee;
- the particularity of the work, the nature of the duties and the character of the employment in special sectors or categories of employee justify the fixed duration;
- the fixed-term employee is employed on probation;
- the fixed-term employment is in implementation of a court judgment; or
- the work requires the person to have sound physical and mental condition and vigorous physical powers for the duties in question.
The list is introduced as cases where objective grounds exist in particular, so it is not closed. But each entry describes a reason connected to the work rather than to the employer's preference for flexibility, and that is the pattern an asserted justification has to fit.
The other half of the Law, which is about treatment rather than duration
Section 5(1) provides that, as regards terms and conditions of employment, a fixed-term employee must not be treated less favourably than a comparable permanent employee solely because the contract or relationship is for a fixed term, unless objective grounds justify it. Section 5(2) applies the principle of proportionality where necessary. Section 5(3) requires that where a qualifying period of service is required for particular terms and conditions, that period is the same for fixed-term employees as for comparable permanent ones, unless objective grounds justify a different length.
Section 6 answers the practical objection. Where there is no comparable permanent employee in the same undertaking or establishment, the comparison is made by reference to the applicable collective agreement or, where there is none, in accordance with the legislation, collective agreements or practice in force.
Section 8(1) requires the employer to inform fixed-term employees of vacant posts available in the undertaking, so that they have the same opportunity to seek permanent positions as other employees, and permits that to be done by a general notice posted in a suitable place. Section 8(2) requires the employer, so far as possible, to facilitate access to appropriate training so as to improve their skills, career development and occupational mobility.
Where a dispute goes
Section 10 makes the Industrial Disputes Tribunal the competent court for any civil dispute arising from the application of the Law. Not the District Court, and not the ordinary civil track.
Section 11 adds a criminal sanction for an employer who contravenes the Law. One honest note about it: the consolidated text still expresses the maximum fine in Cyprus pounds, a denomination the Republic left in 2008, and it has not been restated in euro on the face of the section. The figure is therefore taken from the text as it stands rather than converted here.
What this means in practice
Count the months, not the contracts. The question section 7(1) asks is whether the total previously worked on fixed-term contracts reaches thirty months. How many contracts there were, and whether they ran back to back, is not what the section measures.
Write the objective reason down at the time. The employer carries the burden under section 7(1), and a reason recorded when a contract was made is worth more than a reason constructed after a claim. If the reason is that the need is temporary, the file should show why it was temporary then.
Check the comparison, not just the duration. A fixed-term employee whose contract has not reached thirty months may still have a claim under section 5 if the terms are less favourable than a comparable permanent colleague's for no objective reason, and section 5(3) catches the qualifying periods that quietly exclude them from benefits.
Go to the right forum. Section 10 sends the civil dispute to the Industrial Disputes Tribunal, and issuing anywhere else costs time the limitation position may not have.
Questions we are asked
When does a fixed-term contract become permanent?
Section 7(1) of Law 98(I)/2003 does it by deeming rather than by conversion. Where an employer employs someone on a fixed-term contract, whether on renewal or otherwise, and that employee had previously been employed for a total period of thirty months or more on fixed-term contracts, irrespective of the sequence of successive contracts, the contract is deemed for all purposes to be one of indefinite duration and any provision limiting its duration has no effect. The exception is that the employer proves the fixed-term employment can be justified on objective grounds.
What counts as an objective reason?
Section 7(2) says objective grounds exist in particular where the needs of the undertaking for performing a task are temporary; where the employee is replacing another employee; where the particularity of the work, the nature of the duties and the character of employment in special sectors or categories of employee justify a fixed term; where the fixed-term employee is employed on probation; where the fixed-term employment implements a court judgment; and where the work requires sound physical and mental condition and vigorous physical powers.
Who has to prove what?
The employer. Section 7(1) states the deeming first and makes it subject to the employer proving the objective justification, so once the thirty months are established the burden is on the employer to displace the consequence, not on the employee to earn it.
Can a fixed-term employee be paid or treated differently?
Not merely for being fixed term. Section 5(1) provides that as regards terms and conditions of employment a fixed-term employee must not be treated less favourably than a comparable permanent employee solely because of the fixed term, unless objective grounds justify it, and section 5(2) applies the principle of proportionality where necessary. Section 5(3) requires any qualifying period of service to be the same for both unless objective grounds justify a different period. Where the undertaking has no comparable permanent employee, section 6 directs the comparison to the applicable collective agreement or, failing that, to legislation, collective agreements or practice.
Which court hears a dispute about this?
Section 10 makes the Industrial Disputes Tribunal the competent court for any civil dispute arising from the application of the Law. Section 11 adds a criminal sanction: an employer contravening the Law is guilty of an offence and liable on conviction to a fine, which the consolidated text still expresses in Cyprus pounds rather than euro.
Sources
This article is provided for general information purposes only and does not constitute legal advice.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 23 August 2026
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