Coronavirus (COVID-19) Outbreak: Labour Law

Coronavirus (COVID-19), which has been acknowledged as a pandemic by WHO, has been affecting the health and lives of billions, while also having a tremendous effect on businesses. Precautionary measures adopted by the most of the countries, such as travel bans, closure of borders, restrictions on importation and exportation, as well as closures of workplaces, quarantine orders, declarations of state emergency, all surely cause great disruption of the commercial life. This unexpected outbreak has many labour law implications as well, and has become a primary concern for both the employees and the employers in various aspects.

First and foremost, employers are obliged to provide a safe workplace for their employees, to ensure their health and safety, and to take all necessary measures to do so, under the Occupational Health and Safety Law no. 6331 and the Turkish Code of Obligations no. 6098. In order to mitigate the risks of spread of Coronavirus and to protect the health and well-being of their employees, the employers must keep their employees informed about health-related risks and must take precautionary measures specific to the nature of Coronavirus. These measures may include considering alternative work and/or communication arrangements such as working from home, introducing policies prohibiting or limiting business travels, suspending group activities, providing employees with protective equipment and other additional health and safety training or support which they might need.

If the workplace and the nature of the work allow working outside the workplace, and the employees are willing and able to perform their work remotely, then the employers may consider the remote working arrangement. Since this arrangement is considered as a significant change in working conditions, it must be operated in line with the article 22 of the Turkish Labour Law. Accordingly, a written notification must be made to the employees and this change must be accepted by the employees in writing within 6 working days. If an employee does not give his/her consent to this change, then this employee shall not be bound by such decision of the employer.

If the nature of the work does not allow remote working or in case the employee does not consent to remote working, then the employers may consider offering paid leave to their employees, which, in theory, is also subject to article 22. There is no legislative ground or settled case law stipulating that those paid leaves can be deducted from the annual leaves of the employees. As the pandemic affects the interests of both parties, we believe that this grey area of the Turkish Labour Law will become clear in the upcoming years on the basis of the balance between the interests of the employers and the employees.

If the employer offers unpaid leave to its employees, this too will constitute a substantial change in the working conditions, and thus, article 22 will again be applicable. If the employer decides to apply the unpaid leave without obtaining the written approval of an employee, then the employment agreement shall be deemed to be unilaterally terminated by the employer.1 If the employee agrees to take the unpaid leave, the employment agreement will be suspended during the unpaid leave.

In the event that employers temporarily shut down their workplaces in line with their own decision to prevent the spread of the virus, in principle, their obligations to pay the salaries and other benefits of the employees shall continue. However, if the employer closes the workplace due to an imperative public order, the situation will be different. As per Article 40 of the Turkish Labour Law, in the event of compelling reasons that cause the work to stop or prevent the employees from working for more than a week, the employment agreement will be suspended for a period of one week, and the employee shall be paid half of his/her salary during this period. The Turkish Court of Appeal defines compelling reasons as “situations such as discontinuation of transportation due to natural events such as snow and earthquake, and the application of quarantine due to epidemic disease”.2 Therefore, if the government decides to apply quarantine or curfew measures, the employers might be liable to pay only one half of the daily salary to the employee for each day.

1 7. H.D. 2013/15874 E. 2014/310 K. T. 15.01.2014
2 9. HD., E. 2016/9116 K. 2019/16141 T. 18.9.2019; 9. HD., E. 2016/6740 K. 2019/14563 T. 1.7.2019; 9. HD., E. 2016/14140 K. 2018/21011 T. 20.11.2018; 9. HD., E. 2016/26112 K. 2019/8165 T. 9.4.2019; 9. HD., E. 2016/7091 K. 2019/14564 T. 1.7.2019.

However, if such compelling reason continues for a period of more than one week, and if the employment agreement is not terminated after the end of such one-week period, then the employment agreement shall be deemed as suspended. In that scenario, the rights of the employees and employers will require further evaluation.

Moreover, the Board of Directors of the Turkish Employment Agency has considered the Coronavirus (Covid-19) epidemic as a compelling reason and accordingly, decided that employers who want to carry out a short-time working implementation on the grounds that they are adversely affected by the epidemic, can apply to the Turkish Employment Agency for the short-time working allowance by sending the necessary documents to the e-mail addresses created specifically for this purpose, as of 23.03.2020.

Thus, if their weekly working period is reduced temporarily at the rate of at least 1/3 in a part or whole of the workplace or the activities are wholly or partly ceased for at least 4 weeks, regardless of continuity of the interruption, due to this compelling reason (i.e. Coronavirus epidemic) employers may consider filing an application to the Turkish Employment Agency for the short-time working allowance for their employees. If Turkish Employment Agency approves such requests of the employers, short-time working may be implemented by the employers at the relevant workplaces.

If the workplace activities are ceased or the working period is reduced due to the compelling reasons, the short-time working allowance will be provided by the Turkish Employment Agency 1 week after the occurrence of the compelling reasons. During this 1 week waiting period, the employers shall pay the employees half of their salaries for each day.

The short-time working allowance is 60% of the daily average gross income of the insured, calculated by taking the insured’s income subject to the insurance premium in the last 12 months. The amount of the short-time working allowance cannot exceed 150% of the gross amount of the monthly minimum wage. The short-time working allowance will be deducted from the employees’ unemployment allowance period.

In principle, the period of short-time working is 3 months. The President of the Turkish Republic is authorized to extend this period up to 6 months and to determine whether the short-time working allowance will be deducted from the employees’ unemployment benefits.

In order to benefit from the short-time working allowance, the employee must be entitled to unemployment benefit, at the commencement date of the short-time working implementation, in terms of working hours and the number of days of unemployment insurance premium payment.

It should also be noted that, as per the Article 41 of the Law No. 7226 dated 25.03.2020, a provisional Article 23 has been added to the Unemployment Insurance Law No. 4447, and the conditions stipulated for the entitlement to short-time working allowance has been amended.
According to this amendment, those who have been subjected to an employment agreement during the last 60 days prior to the commencement date of the short-time working period, must have worked for 450 days under an insurance within the last 3 years and an unemployment insurance premium must have been paid. Those who do not meet this condition will continue to benefit from the short-time working allowance for the period remaining from the last unemployment benefit entitlement, provided that it does not exceed the short-time working period. In order to benefit from the short-time working practice, the employer must not terminate the employment agreement of any employee, except for the reasons set out in the first paragraph (II) of the Article 25 of the Turkish Labour Law. Applications made according to this article shall be concluded within 60 days as of the application date.

These amended conditions will be applicable for the applications to be made until 30.06.2020. The President of the Republic of Turkey is authorized to extend this date until 31.12.2020.

This note is intended for general information purposes only and should not be relied upon as a source of legal advice. Independent legal advice should be sought before taking any action based on information contained within this note for each particular case.