Our Information Note on the latest labour and social security law updates as part of the Government’s COVID-19 measures has been published.

1. INTRODUCTION

Law No. 7244 on the Amendment of the Law on the Mitigation of the Effects of the Novel Coronavirus (COVID-19) Pandemic on Economic and Social Life and Certain Laws (the “Law”), which introduces a list of additional measures in the fight against the COVID-19 pandemic, has entered into force following its publication in the Official Gazette dated 17 April 2020 and numbered 31102.

In addition to various preventive and supportive measures across different sectors vis-à-vis the threat of COVID-19, the Law also includes amendments to the labour and social security legislation. These involve the introduction of provisional articles to the Unemployment Insurance Law No. 4447[1] (the “Law No. 4447”) and the Labour Law No. 4857[2] (the “Labour Law”).

2. RESTRICTIONS ON LAYOFFS AND UNPAID LEAVE OPTIONS

Provisional article 10, which has been included in the Labour Law pursuant to article 8 of the Law, introduces significant restrictions on the termination of employment and service contracts by employers.

Pursuant to the Labour Law, employers were authorised to terminate employment contracts by adhering to the relevant notice periods or immediately in the case of valid reasons (geçerli sebep) or just causes (haklı sebep). According to the newly introduced provisional article 10, except for dismissals for just causes due to circumstances against good morals or good faith[3] as set out in article 25(1)(II) of the Labour Law, employers will no longer be authorised to terminate employment contracts for a period of 3 months starting from 17 April 2020.

By way of an example, where previously low or poor performance constituted a “valid reason” for dismissal according to article 18 of the Labour Law, pursuant to the restriction introduced by the Law, employers will no longer be entitled to dismiss employees for performance related reasons during the next 3 months.

In this context it is also worth noting that it was possible for employers to dismiss employees for health reasons as set out in article 25(I) of the Labour Law. One of such health reasons refers to the absence of an employee due to him/her becoming sick or disabled due to his/her own fault, disorderly lifestyle or addiction to alcohol. This is also no longer possible for the next 3 months.

However, at the same time, the Law provides for the option to release (in full or in part) employees on unpaid leave. An issue to be highlighted here is that the employment contract will remain “pending” during the unpaid leave period. In other words, the employment contract will remain in force but the mutual obligations as to work performance and payment will be suspended. The unpaid leave period will not be taken into account in the calculation of the employee’s seniority and the employee will not be allowed to work at another workplace. However, at the end of the unpaid leave period, the employer will be obliged to continue the employment relationship.

Pursuant to the Labour Law, except for certain statutory exceptions[4], unpaid leave depends on the mutual consent of both the employer and employee. However, provisional article 10 included in the Labour Law now entitles employers to unilaterally decide on unpaid leave during the mentioned 3-month period. Employees will hence no longer be able to terminate their employment contract for just cause in the event their employers order such unpaid leave. The President of the Republic will be authorised to extend such period of 3 months to up to 6 months.

The Law foresees an administrative fine in the amount of the gross minimum wage as of the date of dismissal for each employee whose employment contract is terminated by an employer in breach of this prohibition. Such termination will also be regarded as invalid. Accordingly, the relevant employment contract will remain in force and the relevant employee will be entitled to receive his/her pay and any other benefit together with interest.

The Law aims to preserve employment during the COVID-19 pandemic by curtailing layoffs.

3. MONETARY SUPPORT AND INSURANCE FROM THE UNEMPLOYMENT INSURANCE LAW

Articles 6 and 7 of the Law have introduced two provisional articles to Law No. 4447. While provisional article 24 regulates the monetary assistance to be provided to employees put on unpaid leave, provisional article 25 intends to expedite the application process of employers with respect to the short-term work allowance.

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   1. Monetary support for employees on unpaid leave
   
   
   
   

Pursuant to provisional article 24 introduced to Law 4447, as of 17 April 2020:

• employees on unpaid leave and not benefitting from the short-term work allowance; and


• employees whose employment contracts have been terminated after 15 March 2020 and who do not qualify for unemployment allowance[5]

will be given monetary support from the unemployment insurance fund[6] in the amount of TL 39,42 per day throughout the duration of the 3-month period provided that they do not receive any pension.

As such, employers who continue to have their employees work (contrary to their statement of having put staff on unpaid leave) while receiving such monetary support will be (i) subjected to an administrative fine in the amount of the gross minimum wage per each month and working employee; and (ii) required to return the support payments they have received together with statutory interest accrued as of the date of such payment.

Additionally, employees whose employment contracts have been temporarily suspended or terminated and who do not hold a health insurance or are not dependants of persons with such health insurance will be deemed to be insured and any premiums will be paid on their behalves by the unemployment insurance fund. The objective of the relevant amendment is to provide social security for those who do not qualify for unemployment or short-term work allowance.

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   2. Expedited short-term work allowance procedures
   
   
   
   

The bureaucratic process to be followed by employers interested in short-term work allowance has been simplified by the new provisional article 25 of Law 4447. Prior to its enactment, the legitimacy of short-term work allowance applications  was assessed by the Ministry of Family, Labour and Social Services (the “Ministry”) and the allowance was granted to those applicants satisfying the relevant legal conditions. With the amendment, however, applications will be processed on the basis of the statements of applicant employers, without awaiting the assessment of the Ministry.

The issue worth noting here is the accuracy and correctness of the employer’s statements. Pursuant to the last sentence of provisional article 25, any payment made on the basis of false information will have to be repaid together with interest.  

The objective of the relevant amendment is to expedite the application process for short-term work allowance.

4. CONCLUSION

The intention behind these amendments is the preservation of employment and the introduction of new support measures and expedited administrative processes for both employers and employees.