Layoff Restriction Proposed to be Extended in Turkey

In order to reduce COVID-19 pandemic’s adverse effects, some measures have been taken regarding social and economic life in Turkey. With the Proposed Law Amending the Law on Unemployment Insurance and Several Acts (“Proposed Law”) amendments to various laws are introduced including extension of employer’s termination restriction and short time working allowance periods.

Employment Contract Termination Restriction

Previously, employer’s termination of any employment contract whether under the scope of the Labor Law numbered 4857 (“Law No. 4857”) or not was prohibited as a COVID-19 measure, except for termination due to immoral, dishonorable or malicious conduct or other similar behavior. Additionally, the employer was entitled to grant furlough for the period of termination restriction.

With the Proposed Law, an amendment to the Law No. 4857 regarding employer’s termination restriction is introduced with the purpose to clarify exceptions to the termination restriction and extend the restriction period. With this respect, end of employment contract due to end of the term of the contract for employment contracts for a defined period, closing of a workplace and suspension of business, and completion of procurement of services and construction works will be excluded from termination restriction. Additionally, the President is authorized to extend the termination restriction for three months each time, until June 30, 2021.

Extension of Short Time Working Allowance Periods

In addition, an amendment to the Law on Unemployment Insurance No. 4447 (“Law No. 4447”) is proposed to authorize the President to extend the deadline for short time working allowance application due to COVID-19 and to extend short time working allowance period for individual sectors or in general.

For workplaces that have benefited from short time working allowance, a premium support of three months is proposed to be effective as of the following month of the Proposed Law’s publication date. Accordingly, after short time working period is over and weekly normal working time starts being applied in a workplace, premiums required to be paid by the employer would be covered by the Unemployment Insurance Fund stipulated under Law No. 4447. In case it is determined that the application of short time working was not compliant with the relevant legislation in the first place, employer’s premium obligation would not be covered. With this respect, the President is authorized to extend the abovementioned period of three months.

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