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Legal Alerts

17/04/2020

COVID-19: Termination of Employment Agreements Prohibited for Three Months

Legal Alerts
Employment
General

Recent Development

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  (“Law“) published in the Official Gazette No. 31102 and dated April 17, 2020, employers are prohibited from terminating employment agreements for three months.

Furthermore, the Law allows employers to unilaterally send employees on unpaid leave for a maximum period of three months. According to the Law, certain employees will be provided with salary support as detailed below. In addition, applications for short-term working allowance have been facilitated. Finally, certain periods were extended for three months under the Trade Unions and Collective Bargaining Agreement Law.

What’s New?

Prohibition of termination

For three months starting from April 17, 2020 until July 17, 2020, regardless of whether or not it is covered by the Labor Law, any kinds of employment or service agreements (i.e. labor service) cannot be terminated by the employer 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 laws.

After April 17, 2020, the employer can completely or partially send the employee on unpaid leave for a maximum period of three months. 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.

Within the scope of the Law, if the employer or employer representative terminates the employment agreement of the employees contrary to the prohibition of termination, the employer and employer representative will be imposed an administrative fine equal to the minimum monthly gross salary valid on the termination date per employee.

The President has been empowered to extend the periods of termination prohibition and maximum unpaid leave for up to a total of six months.

Salary support

The employees listed below will receive salary support amounting to 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 Law and who cannot benefit from the short-term working allowance; and
  • Employees who are covered by Article 51 of the Unemployment Insurance Law, 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.

If it is determined that the employee benefiting from the salary support 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.

Short-term working allowance applications

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. Overpayments and improper payments made due to incorrect information and documents provided by employers will be collected from the employer, along with interest.

These amendments to short-term working applications came into effect retroactively on February 29, 2020.

Extension of the periods in the Trade Unions and Collective Bargaining Agreement Law

The periods regarding granting mandate, executing collective bargaining agreements, resolution of collective labor disputes, and strike and lockout under the Trade Unions and Collective Labor Agreement Law have been extended for three months. The President has been authorized to extend the three-month period up a total of six months.

Conclusion

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.

Please stay up to date with further developments through the Esin Attorney Partnership Coronavirus Helpdesk.