Measures Introduced by Law No. 7244 on Turkish Employment Relations Due to Covid-19 (Corona Virus) Pandemic

ADMD Law Office
Dilara Tamtürk & İlayda Doğan

 Within the scope of the measures taken due to the COVID-19 pandemic, according to the Law on Reducing the Effects of the Novel Coronavirus (COVID-19) Pandemic on Economic and Social Life and the Law on the Amendment of Certain Laws No. 7244 published in the Official Gazette No. 31102 and dated April 17, 2020 (“Law No. 7244”), it provides new measures for labor relations. In this context, we will discuss the new regulations introduced below:

1. Employment Agreements Shall Not Be Terminated by Employer for Three (3) Months, Except for Violations of the Code of Ethics and Goodwill

It was aimed to provide a temporary employment security as per Provisional Article 10 added to the Labor Law No. 4857 ("Labor Law") with the Article 9 of the Law No.7244. Within this scope, regardless of whether or not it is covered by the Labor Law, any kinds of employment agreement of employer cannot be terminated by the employer for three (3) months starting from April 17, 2020 until July 17, 2020 (“Termination Prohibition Period”) except for terminations arising from the employee’s behavior contrary to the rules of ethics and goodwill and similar cases in paragraph (II) of the first paragraph of Article 25 of the Labor Law and the respective provisions of other law. The President is entitled to extend the Termination Prohibition Period for up to a total of six (6) months.

In addition, we would like to state that as per the Provisional Article 23 added to Unemployment Insurance Law No.4447 (“Law No. 4447”) with the Law on the Amendment of Certain Laws No.7226 (“Law No. 7226”) published in the (Repeated) Official Gazette No. 31080 and dated March 6, 2020, it is regulated that employers who want to benefit from the short-time working allowance should comply with the prohibition of termination during the short-time work period. According to above mentioned provision introduced by Law No. 7244, employers who do not benefit short-term working allowance, are also included within the scope of prohibition of termination without making any distinction.

1.1   What Are the Consequences of the Termination of the Employment Agreement by The Employers Contrary to the Prohibition of Termination?

The employer or employer representative who terminates the employment agreement of the employee’s contrary to the prohibition of termination will be imposed an administrative fine equal to the minimum monthly gross salary valid on the termination date per employee. The gross minimum monthly gross salary determined for 2020 is TRY 2,943.00 In addition to relevant administrative fine, any termination to be made by employers within these periods shall be deemed invalid and employers may have to pay reinstatement compensation along with severance and notice compensation.

Furthermore, if the employer terminates the employment agreement of the employee’s contrary to the prohibition of termination, the employer shall not be entitled to apply for a short-time working allowance that is regulated by Law No. 4447.

2. Employers Will Be Entitled to Send the Employee On Unpaid Leave Unilaterally During The Period Of Prohibition Of Termination

As stipulated in the Labor Law, the employer cannot apply unpaid leave based on its own decision.  Accordingly, as for legally valid unpaid leave, the mutual written agreement should be made between the employment and the employer regarding such unpaid leave or the employer should offer unpaid leave to the employee and obtain written approval of such employee within six (6) business days for the application of unpaid leave.

Within the scope of Law No. 7244, the above-mentioned rule has been changed temporarily during the Termination Prohibition Period and it has been regulated that employers completely or partially can decide to send their employees on unpaid leave unilaterally without obtaining consent of the employee. Additionally, it has been regulated that the fact that the employer sends an employee on unpaid leave does not give the employee the right to terminate their employment agreement based on just cause. Therefore, within the scope of the new regulation the employer is entitled to decide unilaterally to send the employees on unpaid leave during the period of prohibition of termination and the employees shall not able to terminate the employment agreements on the grounds that this situation constitutes substantial changes in working conditions.

3. Monetary Financial Aid Shall Be Provided to Employees

3.1. Conditions for Providing Monetary Financial Aid

Within the scope of new measures introduced by the Law No. 7244 by taking into account the possible effects of such pandemic,  Provisional Article 24 added to the Law No. 4447 apart from to the prohibition of termination of employment contracts for three (3) months in order to provide employment security for employees.

Pursuant to Provisional Article 24 added to the Law No. 4447, the employees listed below will receive monetary financial aid in the amount of TRY 39.24 per day from the unemployment fund while they are on unpaid leave or are unemployed for the periods of prohibition of termination provided that they do not receive a pension pay from any social security organization:

• Employees sent on unpaid leave under the provisional article 10 of the Labor Law by Employer and who cannot benefit from the short-term working allowance; and
• Employees who are covered by Article 51 of Law No. 4447, whose employment agreements are terminated after March 15, 2020, and who cannot benefit from unemployment insurance benefits.

The payments will not be subject to any deduction, excluding stamp tax.

3.2. Employees Sent on Unpaid Leave Shall Continue to Benefit from General Health Insurance

Pursuant to Article 67 of the Social Insurance and General Health Insurance Law No. 5510 (“Law No. 5510”), it is not possible to benefit from the services provided within the scope of general health insurance for the employees sent on unpaid leave and such unpaid leave period exceeds thirty (30) days except for the periods counted as unpaid leave regulated in Articles 56 and 74 of the Labor Law and other labor laws.  In order to protect the general health insurance rights of the employees, they either may have to pay their social insurance premium or may apply to the income test by applying to the social assistance and solidarity foundation at the place of their residence.

Nevertheless, Law No. 7244 regulated this issue in line with the unpaid leave regulation that if an employee does not have general health insurance and cannot benefit from another person’s insurance as a dependent, such employee will be deemed as a general health insurance holder as per article 60 (1) (g) of the Law No. 5510 and her/his insurance premiums in relation thereto will be paid from the Unemployment Insurance Fund.

3.3.  Employers Cannot Continue to Actively Employ Employees Who Are Put on Unpaid Leave and Benefiting from Monetary Financial Aid

If it is determined that the employee benefiting from the monetary financial aid is actually physically employed by the employer while they were on unpaid leave, the employer will be subjected to an administrative fine equal to the minimum monthly gross salary valid on the violation date, per employee per month, and the paid salary support will be collected from the employer plus the legal interest accrued from the payment date of the salary support.

3.4. Application Period of Monetary Financial Aid

The monetary financial aid shall be provided to the employees during their unpaid leave periods or their unemployment but in any case, it shall not exceed the Termination Prohibition Period mentioned above. In case of an extension the Termination Prohibition Period up to six (6) months by the decision of the President, the implementation period of the monetary financial aid will be extended automatically.

4. Short Term Working Allowance Shall Be Made Without Waiting Eligibility Assessment and Confirmation

The number of short-term working applications of employers that has come into force to reduce the economic effects of the coronavirus pandemic is increasing day by day. Due to this intensity, reasonable delays occur in the completion of the eligibility assessment conducted by labor inspector and this causes concerns about consequence of the application of the employers and raises question mark in the minds regarding the implementation of short-term working applications.

In this context, pursuant to the addition of provisional article 25 to Law No. 4447 with the Article 8 of the Law No. 7244, short-term working allowances will be made in accordance with the employers’ declaration, without waiting for the completion of the eligibility assessment for the short-term working applications for compelling reasons arising from COVID-19 made by the employer. This situation paves the way of making faster payment to the insured employees within the scope of short-time working allowance and possible negative outcomes will be relieved.

We would like to note that overpayments and improper payments made due to incorrect information and documents provided by employers will be collected from the employer, along with interest. Therefore, it is particularly important to make correct declarations and to arrange the working periods in accordance with such declaration considering the legal consequences of the improper declarations and applications. These amendments to short-term working applications came into effect retroactively on February 29, 2020

5. CONLUSION

Within the scope of the measures taken in response to COVID-19, significant changes have been made to the prohibition of termination, unpaid leave application, salary support, short-term working allowance application and extension of certain periods, thus it is very significant to comply with such regulations by employers.