Turkey

Terms of Termination Ban and Unilateral Unpaid Leave have been Extended in light of ongoing COVID-19 crisis

Termination ban and unilateral unpaid leave came into force for the first time with the Law on Minimising the Impacts of the New Coronavirus (COVID-19) Outbreak on Economic and Social Life and the Amendment of Certain Laws (7244) (“the Amendment Law”) published in the Official Gazette (31102) on 17 April 2020.

With the Amendment Law, termination of all employment contracts, regardless of being under the scope of the Turkish Labour Act or not, were prohibited for three months as of the effective date of the Amendment Law. The only exception of the ban was termination of employment based on just cause due to cases which are incompatible with moral, goodwill and similar circumstances. Besides, employers were granted the right to put the employees under unpaid leave unilaterally, partially or in full, during the termination ban.

With this initial version of the provision, the president was granted with the power to extend this three-month term to six months.

With the Law No. 7252 on the Establishment of Digital Platforms Commission and Amendment of Certain Laws published in the Official Gazette (31199) on 28 July 2020 –

• the expiry of the term in fixed-term employment or service agreements,
• the closure of the workplace for any reason and termination of the employer’s activities, and
• the termination of work-in-service procurements and construction works conducted in accordance with the relevant legislation,

– were introduced as other exceptions to the termination ban. Also the president’s authority to extend the terms of termination ban and unilateral unpaid leave was extended until 30 June 2021, provided that each extension is for a maximum period of three months.

The terms of termination ban and unilateral unpaid leave have been extended several times since then as follows:

• from 17 July 2020 to 17 August 2020 as per the Presidential Decree (2707) published in the Official Gazette (31171) on 30 June 2020,
• from 17 August 2020 to 17 September 2020 as per the Presidential Decree (2811) published in the Official Gazette (31202) on 31 July 2020,
• from 17 September 2020 to 17 November 2020 as per the Presidential Decree (2930) published in the Official Gazette (31234) on 4 September 2020,
• from 17 November 2020 to 17 January 2021 as per the Presidential Decree (3135) published in the Official Gazette (31287) on 27 October 2020,
• from 17 January 2021 to 17 March 2021 as per the Presidential Decree (3344) published in the Official Gazette (31350) on 30 December 2020,
• from 17 March 2021 to 17 May 2021 as per the Presidential Decree (3592) published in the Official Gazette (31418) on 09 March 2021.

Lastly, with the Presidential Decree (3930) published in the Official Gazette (31470) dated 30 April 2021, the terms of termination ban and unilateral unpaid leave have been extended until 30 June 2021.

As per the Temporary Article 10 of the Turkish Labour Act, the president is authorised to extend the termination ban until 30 June 2021, for a maximum of three months per extension. Therefore, unless an amendment on the said article is introduced, the termination ban and unilateral unpaid leave will expire on 30 June 2021.

For more information on this topic or any other issues involving labour and employment law matters in Turkey, please contact Beril Yayla Sapan (Managing Associate) of Gün + Partners at beril.yayla@gun.av.tr or visit www.gun.av.tr.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

Since the wake of COVID-19 in Turkey, Turkish governmental bodies brought progressive measures and restrictions into force to minimize the pandemic’s negative impacts on employment and sustain employment relationships. One of the most significant arrangements has been the termination ban brought into effect. Mutual termination agreements have a controversial nature in face of this ban.

Termination Ban

On 17 April 2020, the Law on Minimizing the Impacts of the New Coronavirus (COVID-19) Outbreak on Economic and Social Life and the Amendment of Certain Laws (7244) (“Amendment Law”) was published in the Official Gazette (31102) and entered into force. With the Amendment Law, termination of employment contracts – including those subject to the Code of Obligations and other employment-related acts such as the Press Labour Act and the Maritime Labour Act – was prohibited for three months as of the effective date of the Amendment Law.

Since then, the termination ban has been extended for several times and it is in effect until 17 March 2021 for the moment. The President is entitled to extend the termination ban until 30 June 2021 for a maximum of three months each time. As such, it will likely be extended again beyond March 2021.

The termination ban applies only to the terminations by employers, with the following exemptions:

• terminations on just causes arising from the cases that are incompatible with moral, good will and similar circumstances,
• expiry of fixed-term employment contracts,
• closure of workplace for any reason and termination of employer’s activities, and
• termination of the works performed in relation to service procurements and constructions conducted under the relevant legislation.

Employers breaching the ban are subject to an administrative fine at the amount of monthly gross minimum wage (TRY 3,577.50 for 2021) for each employee terminated. Yet the Amendment Law is silent as to the other legal consequences of breaching the termination ban. A majority of the scholars opine that as well as filing re-instatement actions, the employees whose contracts are terminated in breach of the ban may also claim compensation at the amount of their salaries for the remaining period of the termination ban.

Mutual Termination Agreements

Employers often prefer to sign mutual termination agreements with their employees to avoid the risk of the re-instatement action. Mutual termination agreements are not regulated under law, and the concept has been introduced to Turkish law through case-law.

The Court of Cassation takes the view that mutual termination agreements are only valid if the employer provides a reasonable benefit to the employee alongside the legal termination entitlements (e.g. notice and severance indemnities). Reasonable benefit is determined by the court in each case. In several decisions, the Court of Cassation considers 4 to 6 months’ salary of the employee as a reasonable benefit depending on the seniority of the employee.

Mutual Termination Agreements Against Termination Ban

As the current legislative framework does not stipulate mutual termination agreements and their status against the termination ban, it has been a controversial issue whether mutual termination agreements would fall under the termination ban or not.

The general approach of Turkish academicians and practitioners is to deem mutual termination agreements exempt from the termination ban. Considering that the termination ban aims to provide an income assurance to the employees during the pandemic, it is opined that the reasonable benefit to be granted to employees in scope of mutual termination agreements complies with the rationale of the ban.

That being a widely accepted approach, there might be a practical issue at the notification step to the Social Security Institution. As mutual agreement is not regulated under law, there is no specific code provided for notification of such terminations to the Social Security Institution. In practice, “Code 22: Other reasons” is used for reporting the mutual termination agreements. Currently, Code 22 is placed amongst the prohibited codes for termination. Therefore, in practice, employers who execute mutual termination agreements with their employees face with the risk of an administrative fine; yet the fine is subject to appeal.

Comment

As a legal arrangement introduced during the pandemic, termination ban is not a familiar concept to Turkish law. It has only been in force since the last couple of months. Therefore, it is not yet possible to foresee how courts would react to the disputes arising from the practises of the employers that may breach the termination ban. Yet we already know that certain members of the Court of Cassation take the view that mutual terminations are not technically qualified as unilateral terminations performed by employers, and therefore, they should be exempt from the ban, which might be a foreshow of the courts’ expected approach.

For further information on this topic please contact Beril Yayla Sapan or Asena Aytuğ Keser at Gün + Partners by telephone (+90 212 354 00 00) or email (beril.yayla@gun.av.tr or asena.keser@gun.av.tr). The Gün + Partners website can be accessed at www.gun.av.tr.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

With three very recent Presidential Decrees published in the Official Gazette (31343) dated 23 December 2020 and the Official Gazette (31350) dated 30 December 2020:

• the terms set out for termination ban and unilateral unpaid leave, which were to expire by 17 January 2021, have been extended until 17 March 2021, and
• In regard to short-time working practices implemented in scope of COVID-19:

• the term set out for the short-time working allowances granted to workplaces which had applied until 31 December 2020 in scope of COVID-19 has been extended until 28 February 2021, and
• the application term for the period as of 01 January 2021 has been extended until 31 January 2021.

Extension of termination ban and unilateral unpaid leave

With the Presidential Decree 3344, published in the Official Gazette (31350) dated 30 December 2020, the termination ban and unilateral unpaid leave, which were to expire by 17 January 2021, have been extended for a further two months as of 17 January 2021.

However, the President is entitled to extend the termination ban until 30 June 2021, for a maximum of three months per extension.

Extension of the terms of short-time working

Presidential Decree 3317, published in the Official Gazette (31343) dated 23 December 2020, provides that payment of the short-time working allowance for employers that applied for short-time working on grounds of compelling reasons due to COVID-19 until 31 December 2020 (inclusive) has been extended until 28 February 2021.

In addition to the above, as per the Presidential Decree 3316, published in the Official Gazette (31343) dated 23 December 2020, the application term for workplaces applying for short-time working on grounds of compelling reasons due to COVID-19 in regard to the period as of 01 January 2021 has been extended until 31 January 2021.

Accordingly, at the time of writing, employers that applied for short-time working by 31 December 2020 and that fulfill the abovementioned requirements can benefit from the short-time working allowance until 28 February 2021. Also, the employers who did not to file applications by 31 December 2020 can apply for short-time working until 31 January 2021, for the period as of 01 January 2021.

For further information on this topic please contact Beril Yayla Sapan or Asena Aytuğ Keser at Gün + Partners by telephone (+90 212 354 00 00) or email (beril.yayla@gun.av.tr or asena.keser@gun.av.tr). The Gün + Partners website can be accessed at www.gun.av.tr.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.

With two very recent Presidential Decrees published in the Official Gazette (31287) dated 27 October 2020,

• the terms set out for termination ban and unilateral unpaid leave, which were to expire by 17 November 2020, have been extended until 17 January 2021; and
• the term set out for the short-time working allowance granted in scope of COVID-19 has been extended until 31 December 2020.

Extension of termination ban and unilateral unpaid leave

With the Presidential Decree 3135, published in the Official Gazette (31287) on 27 October 2020, the termination ban and unilateral unpaid leave, which were to expire by 17 November 2020, have been extended for a further two months as of 17 November 2020.

However, the President is entitled to extend the termination ban until 30 June 2021, for a maximum of three months per extension.

Extension of the term of short-time working allowance

Presidential Decree 3134, published in the Official Gazette (31287) on 27 October 2020, provides that payment of the short-time working allowance for employers that applied for short-time working on grounds of compelling reasons due to COVID-19 by 30 June 2020 (inclusive) has been extended for two further months.

Accordingly, at the time of writing, employers that fulfil the abovementioned requirements can benefit from the short-time working allowance until 31 December 2020 (inclusive).

For further information on this topic please contact Beril Yayla Sapan or Asena Aytuğ Keser at Gün + Partners by telephone (+90 212 354 00 00) or email (beril.yayla@gun.av.tr or asena.keser@gun.av.tr). The Gün + Partners website can be accessed at www.gun.av.tr.

Terms of Termination Prohibition, Unilateral Unpaid Leave and Short-Time Working Allowance Extended in Wake of Ongoing COVID-19 Pandemic

Shortly after publication of Law No. 7252 on the Establishment of Digital Platforms Commission and Amendment of Certain Laws (“Law”) in the Official Gazette (No. 31199) dated 28 July 2020, two Presidential Decrees (No. 2810 and 2811) published in the Official Gazette (No. 31202) on 31 July 2020, extended the terms of the termination ban, unilateral unpaid leave and short-time working allowance for one month.

Following these developments, another Presidential Decree (No. 2915) published in the Official Gazette (No. 31230) on 31 August 2020, extended the term of short-time working allowance for two more months, to commence following the one month extension.

Lastly, with Presidential Decree No. 2930 published in the Official Gazette (No. 31234) on 4 September 2020, the terms regarding the termination ban and unilateral unpaid leave have also been extended for another 2 months, as of 17 September 2020.

Amendments regarding the termination ban and unilateral unpaid leave introduced by Law No. 7252 are (briefly) as follows:

• the President has been authorised to extend the terms of termination ban and unilateral unpaid leave until 30 June 2021, for no longer than three months per extension.
• the scope of exceptions of the termination ban has been expanded, and the following items have been regulated as exceptions to the termination ban:
  • expiry of the term in fixed-term employment or service agreements,
  • closure of the workplace for any reason and termination of the workplace’s activities,
  • termination of the work in service procurements and construction undertakings conducted in accordance with the relevant legislation.

Extension of the term of termination prohibition and unilateral unpaid leave

Presidential Decree No. 2930 published in the Official Gazette (No. 31234) on 4 September, 2020 extended the terms regarding the termination ban and unilateral unpaid leave for a further 2 months, until 17 November2020. In accordance with the above, termination of employment contracts by employers will be prohibited, however, employers will be able to impose unpaid leave, without the employee’s consent, until 17 November 2020. As per the amendments introduced by Law No. 7252, the President is expected to extend these terms.

Extension of the term of short-time working allowance

Presidential Decree No. 2810, published in the Official Gazette (No. 31202) on 31 July, provides that the term of granting short-time working allowance for workplaces, which applied for short-time working on the grounds of compelling reasons arising out of COVID-19 until 30 June 2020 (inclusive of this date) has been extended for one month until 1 September 2020. Later, Presidential Decree No. 31230, published in the official Gazette and dated 31 August 2020, extended this term for an additional two months. As of the date of this article, workplaces fulfilling the above-mentioned requirements are entitled to benefit from the short-time working allowance until 31 October 2020 (inclusive of this date).

For further information on this topic please contact Beril Yayla Sapan or Asena Aytuğ Keser at Gün + Partners by telephone (+90 212 354 00 00) or email (beril.yayla@gun.av.tr or asena.keser@gun.av.tr). The Gün + Partners website can be accessed at www.gun.av.tr.