Corona Outbreak: Employers are Restricted to Terminate Employment Contracts in Turkey

Restrictions for the Termination of Employment Contracts

As per the Law Amending Certain Laws and Law on Mitigate the Effects of the New Coronavirus (Covid-19) Outbreak on Economic and Social Life published in the Official Gazette dated April 17, 2020 No. 31102, a new provisional article was added to the Labor Law numbered 4857 (“Law No. 4857”). Accordingly, the termination of any employment contract whether under the scope of the Labor Law or not; is prohibited except for termination as per article 25/1-II of the Labor Law regarding immoral, dishonorable or malicious conduct or other similar behavior, for three months starting from April 17, 2020. With this respect, said provisional article applies to employment contracts under the Law No. 4857 and under the scope of other regulations such as Turkish Code of Obligations numbered 6098.

The employer is entitled to grant furlough for the aforementioned three months period and being entitled to furlough under this article does not give the employee the right to terminate the contract based on the justified reason. The employee’s consent is not required to grant furlough under said provision and it is possible to grant partial or complete furlough in a workplace. Even though the termination of employment contract by the employer and the employee is restricted, end of employment contracts aside from termination such as mutual termination with settlement agreement or end of employment contract due to end of the term of the contract for employment contracts for a defined period is not under the scope of said provisional article.

Additionally, in case of a violation of the provisions of this article by the employer or his / her representative who terminates the employment contract, they will be given an administrative fine at the monthly gross minimum wage amount for the employee whose contract is terminated.

Daily Monetary Aid to be Provided

Further, with the provisional article 24 added to Law on Unemployment Insurance No. 4447 (“Law No. 4447”), a daily monetary aid of 39,24-TRY will be provided to the employees who have been granted furlough under the abovementioned provisional article of the Law No. 4857 and who could not benefit from the short-time working allowance and whose employment contract has been terminated after March 15, 2020 and do not qualify for unemployment benefits under other provisions of the Law No. 4447 during the period of three months starting from April 17, 2020 provided that the concerned employee does not receive a pension from any social security institution. No deduction can be made from this monetary aid, except for stamp tax. In addition, it is stipulated that in case the employee who benefits from the monetary aid regulated under said provisional article is in fact working for the employer, an administrative fine shall be imposed. Lastly, those who benefit from the monetary aid who are not considered to be covered by the general health insurer under the Law No. 5510, are considered as general health insurers and the premiums related to general health insurance are covered by the monetary aid.

Short Time Working Payments Shall be Made Immediately After Employers’ Application

As per Law Amending Certain Laws and Law on Mitigate The Effects of the New Coronavirus (Covid-19) Outbreak on Economic and Social Life published in the Official Gazette dated April 17, 2020 No. 31102, a new provisional article was added to Law on Unemployment Insurance No. 4447 (“Law No. 4447”) regarding short time working. Accordingly, due to Covid-19, short-time working payments shall be made in accordance with the employers' declaration, without waiting for the completion of compliance determination for the short-term applications based on compelling reasons made by the employers. With this provisional article, waiting period for approval of short time working due to workload of the Turkish Employment Agency has been shortened in order to mitigate adverse effects on workplaces. Additionally, excess and improper payments made due to the employer providing incorrect information and documents shall be collected from the employer along with statutory interest.

Co-Authors: Deniz Çelikkaya&Simge Kılıç