Employment
If employers allow their employees to work from their homes until COVID-19 is over, they should execute protocols to set clear conditions, rules and procedures for remote working.
Employers may consider providing their employees with online trainings about occupational health and safety in terms of working from home.
In a subcontracting relationship, the main employer and the subcontractor are jointly and severally responsible for the subcontractor's liabilities towards its employees. Therefore, if your company has subcontractors, you should pay extra attention these days to make sure that subcontractors that may be in financial difficulty are still fulfilling their obligations towards their employees.
Not every accident that occurs at home is considered to be an occupational accident. If an employee working from home has an accident due to the work he/she carries out, this will be considered an occupational accident even though it occurred at home.
Do not oblige your employees to use their annual paid leaves or unpaid leaves without consulting with your legal advisors first.
The President of the Turkish Republic gave a speech on March 18, 2020, announcing that a financial stability package of TRY 100 billion will be introduced with respect to COVID-19. Among other measures, this package includes deferring social security premium payments for April, May and June, for a period of six months for certain sectors such as retail, shopping malls, iron-steel, automotive, and logistics-transportation.
The impact of COVID-19 may force certain companies to evaluate mass termination which requires an employer to comply with certain notification, waiting and meeting requirements. Failure to comply with these obligations may not only result in administrative fines but also render the employee terminations invalid. Therefore, we recommend employers to make detailed plans and preparations if they decide to terminate their employees' employment agreements. However, for any termination that takes place due to operational reasons arising from COVID-19, the employer must be able to prove that COVID-19 disrupted its business activities so drastically that, as a last resort, it had no choice but to terminate its employees.
Banking & Finance
Have you checked whether your loan and other financial documents contain a material adverse effect (MAE) clause? If so, these clauses may have been triggered by the COVID-19 pandemic.
Consider if the COVID-19 pandemic constitutes force majeure in respect of the performance, loan or other financial obligations.
Have you considered whether the COVID-19 pandemic constitutes force majeure in respect of the performance of financial services obligations?
Consider prepayment and debt buyback to effectively manage your cash flow in light of your financial obligations.
Review the financial ratio covenants in your finance documents and confirm whether any financial ratio maintenance covenants apply. Confirm whether the unforeseen costs and/or losses arising as a result of COVID-19 can be applied to adjust the consolidated net income or EBITDA for the financial ratios.
If you have a repeating "no default" representation in your finance documents, consider whether the company could fail to comply with any material contracts due to supply chain disruptions or work force social distancing measures.
A default of a credit facility could cause a ripple effect through other facilities (cross default).
Consider whether there are any negative covenants concerning your asset disposals. If any, consider whether they apply even if the company requires emergency cash and whether the disposal trigger mandatory prepayment obligations.
Confirm whether there are any covenants restricting the incurrence of additional indebtedness (in the event that additional liquidity is required in the short or medium term).
Capital Markets
Have you considered the potential impact of the COVID-19 pandemic on your business? If you have an estimate of the impact, you may need to disclose this estimation on KAP.
To the extent you have taken, or are planning to take, steps that would materially affect your business (such as shutting down workplaces, branches, or facilities; suspending operations; remote working; and terminating certain employees), evaluate if, an to what extent you need to inform your investors.
To the extent that you entered into any transactions with your parent company/shareholders and/or other related parties to support your business against the COVID-19 outbreak, consider if these transactions meet all of the requirements for them not to qualify as "disguised profit distributions", and to what extent you need to inform your investors.
In respect of the current developments, are your directors duly performing their monitoring and supervising obligations and thereby fulfilling their liabilities as directors?
Competition
Following the instructions of governmental agencies and serving the public interest do not necessarily provide a company with immunity against the consequences of potential competition law violations.
Thus, your company should be extremely cautious if a government agency invites your company to a meeting where your companies' competitors will also be present.
There is no such thing as harmless or friendly contact with competitors if this contact contains any kind of discussion about your company's future or current strategy (in other words, if these strategies cannot be obtained from publicly available sources). "We did it to overcome the current crisis and for the sake of our common welfare" is not an excuse that would legitimize these communications.
To read this article in full, please click here.
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.