The European Commission has decided to refer Cyprus to the EU's Court of Justice for applying discriminatory conditions to the pension rights and unpaid leave rights of former Cypriot civil servants working in another Member State.

The Commission considers that these discriminatory conditions breach EU rules on the free movement of workers. The first problem concerns the way in which an age criteria is applied to determine pension rights. Under the current law in Cyprus, civil servants with at least five years of service and over the age of 45 receive a lump sum payment on departure as well as a consolidated pension when they reach 55.

However, for those who leave the public service before the age of 45, the situation depends on where they work after their resignation. While former civil servants working in Cyprus are entitled to receive the lump sum payment and a consolidated pension at 55, those who leave the public administration to work in another Member State receive only the lump sum, and lose their pension entitlement, even if they have completed the minimum of five years of service.

The second problem is that Cypriot civil servants moving to work to another Member State are only allowed nine months of unpaid leave until they are forced to resign or face disciplinary measures. However, those who wish to change jobs in Cyprus are usually entitled to several years of unpaid leave before being forced to resign.

Both the age criteria and the risk of facing disciplinary measures linked to moving to another Member State dissuade civil servants from exercising their right to free movement and therefore breach EU law.

After the Commission sent Cyprus a 'reasoned opinion' under EU infringement procedures in March 2012, Cyprus did amend the law in question. However, the change was only partial and the age criteria and disciplinary measures still apply.