Due to the coronavirus epidemic, which continues to show its effects all over the world, legal regulations continue to be made in our country to minimize these effects.

In this context, The Law No. 7244 on Reducing the Effects of the Novel Coronavirus (COVID-19) Pandemic on Economic and Social Life and Amendments to Certain Laws ("Law") entered into force after publication in the Official Gazette dated April 17, 2020 and no. 31102.

By virtue of the subject Law, some amendments have been made in both the Labor Law and the Unemployment Insurance Law that will affect the private sector and the same is provided below for your reference.

1. Amendments to the Labor Law

Article 9 of the Law No. 7244: The following provisional article 10 has been added to the Labor Law numbered 4857.

"Regardless of whether this Law is covered or not, any employment or service contract cannot be terminated by the employer ,except for the reasons set out in the "immoral, dishonorable or malicious conduct or other similar behavior" in the second subsection of the first paragraph of Article 25 of the Labor Law and other relevant laws, for a period of three months as from the effective date of this article.

The employer may place the worker entirely or partially on unpaid leave for a period of three months from the effective date of this article. Being entitled to unpaid leave under this article does not give the employee the right to terminate the contract based on the justified reason.

The employer or the employer's representative terminating the employment contract in violation of the provisions of this article, are given an administrative fine at the monthly gross minimum wage amount for each employee whose contract is terminated.

The President is authorized to extend the three-month periods in the first and second paragraphs up to six months."

The following issues can be summarized under this article;

  • The employment agreements cannot be terminated by the employer "other than the circumstances against the rules of ethics and goodwill and due to the similar reasons" for a period of three months as from April 17, 2020. This circumstance is stipulated in the 25th article of Labor Law, the provisions corresponding to this issue in other laws will be taken as basis.
  • "The ban on dismissal" covers not only the employees ride on the Labor Law, but also employees bound by any employment and service agreement. (e.g.: Maritime Labor Law, Law of Obligations etc.)
  • Only the termination by the employer is prohibited, the termination by the employee (resignation, termination based on just cause etc.) or the establishment of a mutual rescission agreement between the parties are allowed.
  • Employer would be able to place the employee on an unpaid leave entirely or partially (for maximum period of three months) as from the date of April 17, 2020. At this point, there is no need to take a consent of the employee. The fact that employer give the employee an unpaid leave does not give the employee the right to terminate their employment agreement based on just cause.
  • If the employer or the employer's representative acts in violation of the ban of dismissal (i.e. the employee continues to work despite being on unpaid leave) the employer shall pay an administrative fine in the amount of the monthly gross minimum wage at the date of termination for each employee separately.
  • The President in entitled to extend these periods of three months up to 6 months.

2. Amendments to the Unemployment Insurance Law

Article 7 of Law No. 7244: The following "Provisional Article 24" has been added to Unemployment Insurance Law No. 4447 including employees on unpaid leave under "Provisional Article 10"

"The employees holding an employment contract at the date of entry into force of this article, are granted unpaid leave by the employer in accordance with the Provisional Article 10 of Law No. 4857 and who are unable to benefit from short work allowance and employees whose employment contract is terminated under Article 51 after 15.3.2020 and who are unable to benefit from unemployment are given daily salary support of 39.24 Turkish lira from the Fund while they are on unpaid leave or are unemployed, provided that they do not receive old age pension from any Social Security Institution and not to exceed the period of termination which is included in the Provisional Article 10 of the Law No. 4857.

No deductions can be made from the payments made except stamp tax. If it is determined that the employee who benefits from salary support is actually employed by taking unpaid leave under the first paragraph, an administrative fine shall be imposed on the employer by the Provincial Directorates of the Labor and Employment agency in the amount of a monthly gross minimum wage determined by Article 39 of the Law No. 4857 on the date of the action, for each employee employed in this manner and for each month in which he/she is employed separately and paid salary support shall be collected from the employer along with the interest to be processed from the date of payment.

Those who benefit from salary support under this article are not covered by the general health insured or the dependents of the general health insured according to Law No. 5510, are considered as general health insured under the first paragraph (g) of Article 60 of the same law and their premiums related to general health insurance are covered from the fund.

The ministry is authorized to determine the payment procedures and principles related to salary support and to resolve any doubts that may arise regarding the application of this article."

The following points can be summarized within the scope of this article;

  • Employees who are still working at the workplace as of 17.04.2020 but have been placed on unpaid leave for 3 months after this date and are not benefitting from short-time working allowance as well as the employees who cannot receive unemployment benefits because they do not satisfy other conditions (premium, number of days), even though the contract of employment has ended after 15.03.2020 in a way which enable them to qualify for unemployment benefits, will be given daily salary support of TRY 39.24 during the periods of unpaid leave or unemployment.
  • If it is determined that the employee benefiting from the salary support is actually physically continue to work while they are on unpaid leave, the employer will be subject to an administrative fine by Directorates of Labor and Employment Institutions, 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.

Law No. 7244 Article 6: The term of "excluding the eligibility criteria" has been added to the last sentence of the second clause of the provisional article 23 of the Unemployment Insurance Law No. 4447.

At this point, the subject location of the article that regulates the conditions of the "Short Work Allowance" in this process, stipulated as: "... Applications made within the scope of this article are concluded within 60 days from the date of application, excluding the eligibility assessments."

Law No. 7244 Article 8: With this article, the following "Provisional Article 25" has been added to the Unemployment Law No. 4447.

"Short-term working allowances will be made in accordance with the employers' consent, 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."

This article has entered into force as of 29/02/2020 and not as of 17/04/2020, and the payment will be made on the basis of the employer's consent as soon as the short-time working application is made, without waiting for the completion of the eligibility assessment. However, if any delinquency is detected as a result of the examination, the employer shall refund the overpayments along with the interests.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.