Following the announcement of the Economic Stability Shield Package providing that; (i) short time work allowance will be put into action and the procedures required to benefit therefrom shall be facilitated and accelerated and (ii) the 2-month compensatory working period shall be increased to 4 months, Law No. 7226 (“Law”) was enacted and published in the official gazette dated 26 March 2020.
Within the framework of the legislation in force and the Law, labour law measures against COVID-19 outbreak may include the following
A. Short Time Work Allowance
1. Procedures and principles regarding the payment of the short time work allowance (“Allowance”) to employees are regulated under the Regulation on Short-time Work and Short-Time Work Allowance for the circumstances where employers who employ persons, deemed to be insured according to the Unemployment Insurance Law subject to service contracts, temporarily and materially reduce weekly working hours (for a minimum of 1/3) or temporarily stop operations at the workplace fully or partially for compelling reasons due to general economical, sectoral or regional crisis.
2. The Allowance was included within the scope of the Economic Stability Shield Package announced by the President of the Republic of Turkey, Recep Tayyip Erdoğan and within this framework, it was decided by the Board of Directors of the Turkish Employment Agency (“İŞKUR”) that short-time work applications on grounds of seasonal compelling reasons arising from the effects of Covid-19 may be made.
3. With the Law, special provisions to be applied with respect to applications made on the basis of Covid-19 outbreak as a compelling reason to the Allowance were implemented and the special regulation based on compelling reasons due to the Covid-19 epidemic shall be applied for applications made from 29 February 2020 to 30 June 2020.
Employers may apply by sending the application form, relevant documents and list of benefitting employees to the e-mail addresses specifically created for Provincial Directorates of Labour and Employment Agency and Service Centres.
Applications shall be subject to a compliance audit by inspectors of Directorate of Guidance and Inspection of the Ministry of Family, Labour and Social Services (“Ministry”). The below matters shall be assessed for the determination of compliance that will be made by the Directorate of Guidance and Inspection.
- Examinations shall only be made on the basis of relevant application documents and annexes without going on-site.
- In the event that a deficiency is detected in the application documents, it shall be ensured that the missing information and document will be completed online by immediately contacting the employers and the examination shall immediately be completed on the basis of documents.
- With respect to the examinations of compliance determination made in relation to workplaces whose operations are stopped by the Presidency, the Ministries or relevant public institutions and establishments, documents regarding whether the workplaces are only within this scope will be sufficient.
- With respect to the transaction of compliance determination made in relation to workplaces whose operations are stopped or reduced by employers’ managerial decisions, relevant documents that set forth the circumstances will be required.
- A letter qualified as a report shall be issued by the Ministry Work Inspectors regarding the compliance determination.
- The compliance determination made in relation to workplaces whose operations are stopped by the Presidency, the Ministries or relevant public institutions and establishments shall be limited to the period set out in the administrative decision, subject to the minimum and maximum periods regulated in the Law and the application of short-time work shall automatically end upon the expiry of the period stipulated in the administrative decision.
4. In the event that working hours at the workplace are reduced for a minimum of 1/3 of the total working time, or the workplace is completely closed within the scope of Covid-19 precautions, employers may benefit from short-time work allowance following the compliance determination by filing the application as stated above. The applications will be evaluated within 60 (sixty) days.
5. The results of the compliance determination shall be informed to the employer by the Institution’s unit. The employer shall declare the circumstance at a place the employees may see it at the workplace and shall inform the employee union party to the collective labor agreement, if any. In the events that the declaration to the employees by way of announcement cannot be made, a written notice shall be made to the employees subject to short-time work.
6. In order for the employee to benefit from the Allowance, it is required that the employer’s application is approved. Pursuant to Article 41 of the Law and Provisional Article 23 which was added to the Law No. 4447, employees who are subject to service contract for the last 60 (sixty) days before the starting date of short-time work and who have worked as insured for 450 (four hundred fifty) days within the last three years and whose unemployment insurance premium was paid can benefit from the Allowance. Those who do not meet these conditions continue to benefit from the Allowance for the time period remaining from the entitlement to the last unemployment allowance without it exceeding the short-time working period (There is no consensus yet in the doctrine as to how this application will be realised. However, on the face of the legislation, if the employee had benefitted from the unemployment allowance before his/her employment, but had not received unemployment allowance for the entire period he/she was entitled to, e.g. if an employee entitled to 8 months of unemployment allowance had started his/her employment after receiving it for 6 months, then he/she may receive Allowance for the remaining 2 months).
7. It is required that the employment agreement should have not been terminated except for circumstances of not conforming to moral and good faith rules as stated in Article 25/1/II of the Labour Law and similar reasons in order to be able to benefit from Allowance, during the short-time work period, in other words during the period that the compelling reason continues.
8. The Allowance is offered as long as the compelling reason continues for a maximum of 3 (three) months. For the applications based on compelling reasons; the employer is responsible for the payment of all the salaries and premiums of the employees regarding the first one week pursuant to Article 24 and 40 of the Labour Law, the short-time work allowance periods start after this one-week period.
9. The Allowance is 60% of the daily average gross profit calculated by taking into account the profit based on the last twelve months premium of the insured, with a cap of 150% of the gross total of the monthly minimum wage, and shall be paid to the employee himself/herself monthly on the fifth day of each month, for the unworked time. Payments shall be made through PTT Bank.
10. The insurance premium that will be paid for the period the employee is paid short-time work allowance shall be transferred to the Social Security Institution by the Unemployment Insurance Fund.
11. In the event that the employer decides to start normal operations before the time it had announced, it is obliged to notify the Institution’s unit, the employee union party to the collective labor agreement, if any, and the employees before six business days in writing. The short-time work shall end as of the date stated in the notice.
B. Compensatory Work
12. In accordance with Article 64 of the Labour Law, in the events that operations are stopped due to compelling reasons, workplaces are closed before or after national and general holidays or works are performed for times significantly lower than normal working hours or normal working hours are completely stopped at the workplace for similar reasons or the employee is given leave upon his/her request, the employer may call upon compensatory work within two months for the unworked periods. Such compensatory works are not deemed as overtime work or work at extra hours. Provided that they do not exceed the maximum daily working hours, compensatory works cannot last longer than 3 (three) hours per day.
13. Within the scope of the Economic Stability Shield Package announced by the President of the Republic of Turkey, it was stated that compensatory work period in Article 64 of the Labour Law would be increased to 4 (four) months and the expression of 2 (two) in the article was changed to 4 (four) with the Law. In the event that operations are stopped or normal working hours are significantly reduced due to the Covid-19 epidemic, compensatory works may be made for 4 (four) months period starting from the ending of the compelling reasons provided that they do not exceed 3 (three) hours daily and no overtime work payment to the employee shall be made. However, for this, daily working hours of employees including the compensatory work shall not exceed 11 (eleven) hours in any event and there shall be no compensatory work during holidays.
C. Half-wage and Annual Paid and Unpaid Leaves
14. Although it is not mentioned in the Economic Stability Shield Package, as a general matter, in case the performance of work becomes impossible due to compelling reasons for a period of more than one week, the employer may pay half-wage to the employees up to 1 (one) week pursuant to Article 40 of the Labour Law. At the end of the one-week period, the employment agreement will be in suspension and the employer have no wage payment obligation. However, during this period of suspension, the employee may request the payment of severance pay by terminating the employment agreement.
15. It is not clear how these provisions apply in connection with the Covid-19 pandemic. Given the option of short time work as explained above, some argue that the exercise of this right by employers might be considered not to be in line with good faith principles. There is also a view arguing that this option should be available for work places which are completely closed or where operations are significantly reduced due to the Covid-19 epidemic on the basis of an administrative decision, however, with respect to establishments that closed its workplace or significantly reduced its working hours due to Covid-19 outbreak without any administrative decision to this effect, it should not be applied.
16. It is also seen that employers also try to get through this period by making its employees use their annual leave rights. According to the Court of Cassation decisions, it is accepted that the matter of when employees use their annual leaves is within the scope of employer’s management authority and it is required that employers act in accordance with good faith principles when using this management authority and not use the management authority in bad faith. Whether the management authority was used according to good faith principle or not is assessed on a case by case basis. In the event that the operations of the establishment has been negatively affected, its operations are at the point of stopping or have already completely stopped due to the Covid-19 epidemic, employer’s making their employees use their annual leaves may, in our view, be assessed as a managerial decision in good faith in accordance with good faith principles. However, making employees take unpaid leaves is not within the scope of employer’s management authority and giving unpaid leaves without written approval of the employee (except Articles 24/III, 25/III and 40 of the Labour Law) may not be possible.
