What Do the New Turkish Presidential Decrees Say About Employment Agreements During the Pandemic?

Background:

Turkish labour law and related laws were amended from March 2020 to introduce protective measures ensuring economic stability for employers and employment security for employees.

Short Term Working Allowance: Amendments in March and April 2020 to unemployment security law no: 4447 gave employers the right to apply for short term working conditions wage support from the government to fight the economic effects of the coronavirus pandemic. The support came with the condition that there would be no termination of employee contracts and applications could be made until 30 June 2020. Previous Presidential Decrees  extended this term until 30 October 2020.

Termination Ban: Amendments to Turkish Labour Law no:4857 introduced a termination ban for employees (with some exceptions listed below). Previous Presidential Decrees had extended this term until 17 November 2020.

Unpaid Leave: Employers have the right to offer unpaid leave to employees either fully or partially. This term was also extended until 17 November 2020 according to previous Presidential Decrees.

What has changed:

Short Term Working Allowance: The allowance has been extended until 31 December 2020.  According to Presidential Decree no 3134 dated 27 October 2020 the extension is for two months until 31 December 2020.

Termination Ban: The term for the termination ban has been extended until 17 January 2021 with the Presidential Decree no 3135 dated 27 October 2020.

Unpaid Leave: The term for unpaid leave has also been extended until 17 January 2021 with the Presidential Decree no 3135 dated 27 October 2020.

What does this mean for employers and employees?

Short Term Working Allowance: Employers may benefit from short term working wage support from the government until 31 December 2020 with the condition that they had previously applied for support before 30 June 2020 and other conditions are met with relevant laws.

Termination Ban: Employment security for employees is extended until 17 January 2021. This means employers cannot terminate employment with their discretion, especially for performance related reasons. Employers are subject to an administrative penalty of the minimum wage per employee if they fail to comply with this prohibition.

Unpaid Leave: Employers have the right to offer employees unpaid leave. However, this should be applied according to the equal treatment principle set forth in labour law. The unpaid leave offer does not give rightful termination rights to employees.   

What are the exceptions to the termination ban?

  • Rightful termination for misconduct and unethical behaviours of employees listed in article 25/2 of labour law and other related law.
  • The end of an employment term regulated in definite term employment agreements
  • Closure of a business and discontinuation of an employer’s activities
  • The end of a service relationship as regulated in other laws

It is a point of discussion whether mutual termination agreements (ikale sözleşmesi) will be an exception to the termination ban. According to labour law doctrine, a mutual termination agreement is governed under the pacta sund servanda principle in the Turkish Law of Obligations and is deemed as an exception to the termination ban since it is not regarded as a termination by the employer. However, we strictly advise employers to take legal advice before entering into such agreements since the Turkish Supreme Court has clear standards for the required terms of these agreements to protect the rights of the employees.