New Employment Rules Introduced by the Law No. 7224 For Covid-19 Pandemic Period

The No. 7244 adopted at Grand National Assembly of Turkey on 16.04.2020 and published in Turkish Official Gazette of 17.04.2020 introduces several new rules within the scope of labour law practice during Covid-19 pandemic. This document is prepared to provide guidance and clarity on the application of these new rules.

• Can the employer force the employee to take unpaid leave under the Law No. 7224? What are the conditions of unpaid leave?

The Law No. 7244 allows the employer to grant unpaid leave to the employee without the requirement to obtain employee’s consent or to indicate a reason, during 3 months starting from the date of 17.04.2020. In this case, the employee will be entitled to apply to Turkish employment agency to obtain a daily cash payment of 39,24 TL. The Ministry of Family, Labour and Social Services will determine the rules and procedures of this cash payment support.

The 3-months period can be extended up to 6 months by the decision of the President. Upon the expiration of this period, the employee’s written consent will be required to grant unpaid leave, as per the settled precedents of Turkish Supreme Court.

• Does the application of unpaid leave under the Law No. 7224 constitute a ground for rightful termination by the employee?

The Law No. 7224 eliminates the employee’s consent requirement in granting the unpaid leave. The employee cannot terminate the labour agreement on rightful grounds due to being forced to unpaid leave. The employee’s termination on such ground would be unlawful, so the employee would not be entitled to severance and notice pay.

• What are the conditions for terminating an employment agreement during this period?

According to article 9, paragraph 1 of the Law No. 7224; the termination of employment agreements is prohibited for 3 months following the date of 17.04.2020, except for termination by the employer due to cases in violation of rules of ethic and good will as per article 25/II of Labour Code. The employer who terminates a labour agreement in violation of this restriction must pay an administrative fine for each employee in an amount corresponding to gross monthly salary of the respective employee at the time of termination.

On the other hand, the employees are free to terminate their employment agreement during this 3-months period. It is considered that the mutual termination agreements would be acceptable on the condition that the initial request for termination is made by the employee. If an employment agreement is to be terminated during this period by mutual agreement, we recommend including an express statement that this transaction is made upon the employee’s request. It is also possible to terminate the employment due to retirement during this period, since retirement is also a reason for termination upon the employee’s request.

We are of the opinion that in case the term of a fixed-term employment expires during the 3-months mentioned in the Law, this termination would not fall under the prohibition of termination.

• Are social security premiums payable for the employee who is granted unpaid leave under the Law No. 7224?

In case of unpaid leave, the employer does not have an obligation to pay salary just as the employee does not have an obligation to work. Since there is no work performed by the employee, there is no workday for premium or generated revenue as a basis to premium. Accordingly, no social security premium arises for the employees on unpaid leave.

On the other hand, it is indicated in the Law No. 7224 that the employees on unpaid leave will be covered under the general public health insurance and the premiums relating to general health insurance will be paid from the Unemployment Insurance Fund.

• What is the implication of the Law No. 7224 on “Short-time Employment Practice”?

Short-time employment is applicable when the weekly work hours are temporarily reduced or the workplace is partially or completely shutdown due to general economic, sectorial or regional crises and compelling circumstances. The employer must prove the reduction of the work in its application to Employment Agency.

Under the rule introduced by the Law No. 7224, the Employment Agency’s review and control is no longer a pre-condition for granting short-time allowance. The short-time employment applications made since 29.02.2020, as well as the future applications, will be processed without waiting the outcome of the agency’s review on application documents and short-time employment allowance will be paid to all employees subject to application. Upon the review, any extra or inappropriate payments made due to employer’s submittal of incorrect information or documents will be collected from the employer, together with legal interest. In this respect, the employers are recommended to submit information and documents showing the essential reduction in their activities, together with a board resolution in this respect. Besides, it must be accurately determined which employee should benefit from this allowance. The employers who receive short-time allowances, but who are found ineligible after the Agency’s review can be exposed to monetary risk in the future.

Beste Ege, Esq.
Doğukan Çek, Esq.