Plans to change the status of some 4,000 civil servants on open contracts to permanent can go ahead if the legislation is amended, MPs heard on Monday.
The House finance committee was told that two bills designed to change the regime were unconstitutional although one could fly by amending the relevant law.
However, it is understood that doing so will create problems with permanent staff who had been hired under different criteria.
The finance finance ministry had conditionally agreed with the change in a bid to correct certain operational distortions inside the civil service, but it initially seemed like it would be impossible due to constitutional concerns.
Legal Service representative Demetris Lysandrou said both proposals violated the constitution, but one could be remedied by amending it.
Lysandrou said European Directive 1990/70 laid down the rules regarding equality among temporary and permanent workers, the work conditions, recruitment and promotions, and does not allow legislators to make the distinction between duties for instance, but by the executive.
The directive was transposed in 2003 but Cyprus did not revise the national provisions, which clashed with the law.
Lysandrou said the Legal Service could amend the proposal to comply with the constitution and EU law and send its opinion to the finance ministry, which will have the final say.
Finance ministry official Elena Damianou told MPs they wanted to put an end to the process and end the flow into the civil service of new recruits under the same regime.
However, granting open contract staff the same rights and privileges as permanent workers would almost certainly create other problems.
By doing so, open contract workers would automatically be eligible for promotions that were otherwise earmarked for permanent staff.
The latter would argue that this is a violation of the principle of equality as unlike the contract staff, they entered the civil service under different criteria, namely exams and interviews.