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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case CY-2020-11/327 Updated – measures in Cyprus

Special scheme for complete suspension of business

Ειδικό σχέδιο πλήρους αναστολής εργασιών της επιχείρησης

Country Cyprus , applies nationwide
Time period Temporary, 11 March 2020 – 31 March 2021
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g. short-time work)
Author Loucas Antoniou (INEK) and Eurofound
Case created 07 April 2020 (updated 05 May 2021)

Background information

The scheme addresses businesses who have completely suspended their operation, in accordance with the Decree 130/2020 of the Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19'. It includes hypermarkets, shopping malls, cafeterias, libraries, sport centers, thematic parks, hairdressing saloons, barber shops, night clubs and pubs, etc.

Content of measure

The basic requirement for participation in the Scheme is that no employee has been fired since 1 March 2020. Additionally, businesses participate in the Scheme should not dismiss any employee during the period of participation, during an additional equal period of participation and plus one additional month after the end period of participation.

For companies employing more than nine employees, a Special Unemployment Benefit will be paid to 90% of employees, provided the terms and conditions are met. The remaining 10% shall include managing shareholders, partners holding more than 20% of the shares, general managers and senior executives. For businesses employing up to nine employees, Special Unemployment Benefit may be paid to all employees of the business, irrespective of their status

The maximum amount that may be paid for a period of month may not exceed €1,214.

On the 23 April 2020, the Cabinet amended the calculation of the payable amount to the beneficiaries in order to support as many employees as possible. For the purpose of paying the Scheme, the insurable earnings of the year 2018 will be taken into account, but in addition, a comparison will be made based on the declared salary of January 2020. The payable amount will be the highest amount that results from this comparison.

Additionally, a minimum payable amount of €356 has been defined for beneficiaries. Also, a special plan will be implemented for employees who first started work in February and March 2020.

The Scheme includes persons over 65 years of age who do not receive statutory pension and continue to work.

In addition, those for whom the regular unemployment benefits from the Social Insurance Fund have been completed, may join the Scheme to receive a Special Unemployment Allowance.

Updates

The following updates to this measure have been made after it came into effect.

12 April 2021

Decrees 15/2021, 83/2021 & 123/2021 extend the implementation period of the measure until 31 March 2021.

07 January 2021

The government extents the Scheme for another month with the Decree 634/2020 as the relevant Decree that provides the suspension of certain businesses is still active. The provisions of the new extended Decree remain the same.

30 September 2020

Decree 187/2020 of the Law 27(1)2020 expands the businesses eligible to participate in the Scheme. Apart from the businesses that have completely suspended their activities, other businesses directly connected with the activities of the businesses with complete suspension having more than 80% reduction of their revenue because of the pandemic are eligible to participate in the Scheme. The reduction of the revenue is calculated based of the revenue of the business of the last year same period.

Decree 271/2020 of the Law 27(1)2020 eliminates the above amendment of the expansion of the eligible businesses.

Use of measure

The budget available for the scheme is €182 million (covering the Scheme for the partial suspension of business Decree 130) but there is no estimation of the number of beneficiaries at this moment.

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
Trade unions
Employers' organisations
Company / Companies
Social insurance
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Agreed (outcome) incl. social partner initiative
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

Social partners – trade unions and employers’ organisation – at the peak level were invited by the Minister of Labour, Welfare and Social Insurable to participate in consultation process during the designing phase of the Scheme. Political parties have been also invited in the consultation process during the designing of the Scheme. Sectoral trade unions and smaller organisations of the employers did not participate in the consultation process.

Views and reactions

Social partners and political parties encouraged the government to take such measures targeting the needs of different categories of workers based on their special conditions as formed by the pandemic. Reactions and disagreements on the scheme or on particular provisions have not been recorded. On the contrary, social partners appear satisfied with the measure and supportive to the government.

Sources

  • 07 April 2020: Special Scheme for Complete Suspension of Business (www.coronavirus.mlsi.gov.cy)
  • 13 April 2020: Decree 187, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19 (www.mof.gov.cy)
  • 23 April 2020: Τη λήψη επιπρόσθετων μέτρων στήριξης των εργαζομένων αποφάσισε το Υπουργικό Συμβούλιο (www.pio.gov.cy)
  • 13 May 2020: Decree 238, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19https://www.mof.gov.cy/mof/gpo/gpo.nsf/All/0DFB1FB671C5EE2FC225855C0065033B/$file/5260%202%205%202020%20PARARTIMA%203o%20MEROS%20I.pdfhttps://www.mof.gov.cy/mof/gpo/gpo.nsf/All/0DFB1FB671C5EE2FC225855C0065033B/$file/5260%202%205%202020%20PARARTIMA%203o%20MEROS%20I.pdf (www.mof.gov.cy)
  • 13 June 2020: Decree 271, 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 01 July 2020: Decree 319, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 01 August 2020: Decree 395, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 01 September 2020: Decree 421, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19 (www.mof.gov.cy)
  • 01 December 2020: Decree 634, complete suspension of activities (www.mof.gov.cy)
  • 01 December 2020: Decree 634, complete suspension of businesses (www.mof.gov.cy)
  • 20 January 2021: Decree 15/2021 (www.mof.gov.cy)
  • 25 February 2021: Decree 83/2021 (www.mof.gov.cy)
  • 19 March 2021: Decree 123/2021 (www.mof.gov.cy)

Citation

Eurofound (2020), Special scheme for complete suspension of business, case CY-2020-11/327 (measures in Cyprus), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.