Our Information Note on the latest labour and social security legislation updates as part of the measures in the fight against COVID-19 has been published.
The Latest Labour and Social Security Law Updates as part of the Government’s COVID-19 Measures
Law No. 7226 on the Amendment of Certain Laws (the “Law”), which introduces a list of measures in the fight against the COVID-19 pandemic, has been published in the Official Gazette (repeating issue) dated 26 March 2020 and numbered 31080.
The Law foresees several preventive and supportive measures across different sectors vis-à-vis the threat of COVID-19. It includes important social security related regulations in order to mitigate against the increased risks at the workplace and in public life.
In this regard, the Law includes important regulations with respect to the provisions of the Social Insurances and General Health Insurance Law No. 5510 (the “Law No. 5510”) and the Unemployment Insurance Law No. 4447 (the “Law No. 4447”). The Law further contains regulations in favour of employees as well as employers within the scope of the Labour Law No. 4857 (the “Labour Law”) and the Law No. 6356 on Trade Unions and Collective Labour Agreements (the “Trade Unions Law”).
The below is a summary of the most relevant matters in this context.
- THE UNEMPLOYMENT INSURANCE FUND AID FOR 2020
The Law introduces an additional article 80 to Law No. 5510. According to such amendment, employers, who employ employees within the scope of article 4(a) of Law No. 5510 subject to long term social security plans on the basis of employment contracts, will benefit from minimum wage support payments in 2020. This will be set off against their social security premium payments and covered by the unemployment insurance fund (the “Unemployment Insurance Fund”). The idea behind such regulation is to provide financial assistance to employers that are not able to maintain their usual working conditions and hence to employees who are adversely affected by this.
Accordingly, the amount resulting from the multiplication of:
- the total number of social security premium payment days for employees as stated in the monthly social security premium and service documents (prim ve hizmet belgeleri) or tax and social security premium declarations (muhtasar ve prim hizmet beyannameleri) submitted with respect to the relevant month in 2020 but not exceeding the total number of social security premium payment days for employees whose daily gross income is stated as TL 128 or less in such documents or declarations for the same month in 2019; and
- the total number of social security premium payment days for employees declared by workplaces that have been brought within the scope of Law No. 5510 for the first time in 2020;
with TL 2,50 per day for the months/period of January – December of 2020 which will then be set off against the social security premiums to be paid by employers. The said support payment amounts will be covered by the Unemployment Insurance Fund.
The cap of TL 128 as set out in paragraph (a) above will be TL 256 with respect to private sector workplaces subject to collective labour agreements.
The relevant provision further stipulates that collusive transactions such as the closing down and re-opening of businesses under another name or title, or in the form of another business unit, or the shifting of employees within group companies for the purpose of benefitting from such support payments by the Unemployment Insurance Fund, will result in the obligation of such employers to pay back any amounts received from the Unemployment Insurance Fund together with default interest and penalty.
As the relevant set off transaction is inclusive of the past months of January and February, it is expected that the Social Security Institution (SGK) will publish an additional circular to clarify from which accruals the set off will commence.
- SIMPLIFICATION OF THE CONDITIONS FOR THE SHORT-TERM WORK ALLOWANCE
Pursuant to Law No. 4447, employees are provided with income support for the period they were not able to work because the weekly working hours of workplaces were temporarily decreased or activities were suspended, in whole or in part, due to general economic, sector-specific, regional crises or pressing needs. This is the so-called “the short-term work allowance”. It also covers the payment of the general health insurance premiums of employees. The daily short-term work (unemployment) allowance constitutes 60% of the employee’s daily average income that is calculated on the basis of the income which is subject to social security premium payments of the past 12 months. The total monthly amount of the short-term work allowance will however not exceed 1.5 times the monthly minimum wage applicable to such employee.
According to Law 4447, the maximum period of the short-term work allowance practice is 3 months but the President is authorised to extend such period to up to 6 months.
By way of provisional article 23 to Law No. 4447 the Law has simplified the conditions for qualifying for short-term work allowance.
Accordingly, until 30 June 2020, the conditions to be fulfilled for employees to be entitled to benefit from the short-term work allowance on the basis of their applications due to COVID-19 are as follows:
- the unemployment or reduction in the hours of work is for reasons other than the employee’s own option or fault;
- employment on the basis of an employment contract during the 60 days preceding the commencement of short-term work (prior to the introduction of the Law, such number of days was 120);
- insured employment for 450 days during the last 3 years (prior to the introduction of the Law, such number of days was 600); and
- unemployment insurance premiums having been paid.
Employees who do not meet such criteria will nevertheless be entitled to benefit from this short-term work allowance for a period remaining from any past qualifying unemployment allowance, if any, provided that such period does not exceed the duration of the short-term work practice (e.g. even if the abovementioned criteria are not met, an employee who has started to work on the 120th day of his/her unemployment allowance term of 180 days will be entitled to benefit from his/her right with respect to the remaining 60 days).
However, to benefit from this allowance requires employers not to dismiss any employees, with the exception of dismissals for just cause due to circumstances against good morals or good faith as set out in article 25(1)(II) of the Labour Law.
In practice, following the application of employers, labour inspectors will conduct necessary examinations in order to determine whether the conditions for the receipt of the short-term work allowance are satisfied. This is why the relevant provision provides that the evaluation of applications for short-term work allowance will be concluded within 60 days after the application date, at the latest. The provision also states that the President is authorised to extend the application date until 31 December 2020 or set another date.
The relevant amendment intends to mitigate the economic challenges created by the COVID-19 pandemic by providing assistance to employers and employees in need.
- INCREASE OF COMPENSATORY WORK PERIODS
Pursuant to article 64 of the Labour Law, in cases where the hours of work have been considerably lower than usual, or suspended entirely, for reasons such as force majeure or the extension of national and public holidays, the employer may require the performance of compensatory work to compensate for such missing hours of work.
The fact that the outbreak of the COVID-19 pandemic led to the temporary closure of many workplaces implies that the work hours have been, and will be, considerably lower than usual. The amendments in relation to article 64 of the Labour Law on compensatory work foreseen in article 43 of the Law constitute an appropriate measure, given that the duration of the COVID-19 pandemic cannot be predicted at this point in time. The amendment increases the time period in which employers may request the performance of compensatory work from 2 months to 4 months. Also, the President will be authorised to extend such period of 4 months up to 8 months.
- OTHER REGULATIONS
Apart from the regulations explained above, the Law further introduces the following amendments to mitigate against the economic effects of the COVID-19 pandemic:
- The amendment of additional article 19 of Law No. 5510 increases the monthly minimum payment for pensioners and beneficiaries receiving retirement pensions and disability and widow allowances from TL 1000 to TL 1500. This provision will be applicable as of April 2020.
- Article 16 of the Law extends the payment of exam and documentation fees for a professional competence certificate (Mesleki Yeterlilik Belgesi) to be procured by workers working in dangerous and very dangerous works (high voltage equipment testing personnel, automotive body repair mechanic etc.) by the Unemployment Insurance Fund from 31 December 2019 to 31 December 2021.
- Article 26 of the Trade Unions Law allows the establishment of a complimentary cooperation and relief fund to be utilised for the payment of employee insurance premiums payable by employers that are members of trade unions. Where trade unions were previously allowed to establish such fund on the condition that it did not exceed 25% of their available cash, the Law increases such threshold to 35%.
In light of the impact of the COVID-19 virus on the economy and business life, the abovementioned amendments, including new regulations in respect of the short-term work allowance and Unemployment Insurance Fund payments, constitute welcomed developments in the government’s attempt to mitigate against the economic effects of the COVID-19 pandemic.
For more information please contact Bezen & Partners:
Yeşim Bezen (Telephone + 90 212 366 6804, E-mail [email protected])
Serdar Bezen (Telephone +90 212 366 6803, E-mail [email protected])
 Published in the Official Gazette dated 16 June 2006 and numbered 26200.
 Published in the Official Gazette dated 8 September 1999 and numbered 23810.
 Published in the Official Gazette dated 10 June 2003 and numbered 25134.
 Published in the Official Gazette dated 7 November 2012 and numbered 28460.
 The unemployment insurance fund constitutes a State guaranteed fund in which unemployment premium payments, aid and support of the government and income derived from the payments under Law No. 4447 such as penalties and delay/default interest are collected.
 Pursuant to article 80 of Law No. 5510, the total gross amount of (i) the earned wage; and (ii) any additional payments such as bonus payments that are made by the employer to the employee for the relevant month in addition to his/her wage are taken into account in the calculation of the employee’s gross income (prime esas günlük kazanç).