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Workforce Flexibility and Government Incentives in times of Covid-19 - Turkey

Short-term State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

The employers may prefer certain options.

First option is to have the employees use their annual paid leave. If the employees have unused annual paid leaves, the employer may enforce on the use of such leaves.

Second option is unpaid leave. Unpaid leaves could be imposed by companies during the period starting from 17/4/2020 to 17/7/2020. There is no limit in terms of number of unpaid leaves within this specified 3 months. The employees taking unpaid leave are granted cash wage support from the Unemployment Insurance Fund in the amount of TL39.24 per day.

Third option is short working conditions, which can be applied if there is a shortage in business at least at a ratio of one third compared to the ordinary course. The employers must apply to Turkish Employment Agency (ISKUR) for short working, and once it is accepted, the employers must give the employees at least two days off in a regular week. Employees will be compensated for the hours not worked with a minimum indemnity of 60% of their gross salary capped to 150% of the minimum salary (approx. US$1,000) for a maximum period of 3 months.

Aside from these options, employers also can negotiate with employees and unions, if there is a collective bargaining agreement signed with unions for reduced hours or time-off.

Depending on the specifics of the case (such as Coronavirus that is accepted as pandemic by the WHO) the employer may take decision at its own discretion to determine as excused leave during which full salary payment has to be done. In case of a pandemic, excuse leave can only be used at the employer's initiative.

Collective Paid Leave. According to the Labor Law, employers can send all or part of their workers on leave for the period between the beginning of April and the end of October. Therefore, the employer can make the crowded workplace more risk-free by using annual paid leave for some of the employees as of April.

Annual Paid Leave. (Annual leave outside the period between the beginning of April and the end of October) Employees can be encouraged to use their annual leave during these periods, taking into account the extent of the outbreak. Even though it is accepted that within the scope employer's management right, without workers' requests to use annual leave periods, it will not be possible for the employer to unilaterally leave out the employees for annual leave. In the Annual Paid Leave Regulation, it is regulated that the leave request should be made by the employee.

Unpaid leave. All other unpaid leaves except for unpaid leaves granted to the worker in Articles 56 (four days unpaid transportation leave granted to the worker who will spend annual leave in another city upon request) and 74 (Unpaid maternity leave that can be used up to six months if the female worker who is on leave due to birth requests at the end of the report) of the Labor Law no.4857 should be used with the consent of the parties.

Therefore, it is one of the options that can be applied in case of necessity and under mutual agreement for workers that do not have paid annual leave right any more.

Remote working. Working remote that is regulated in paragraph 4 within Article 14 of the Labor Law (Additional clause: 6.5.2016-6715 / 2 Art.) is a relationship established in writing and based on the principle of fulfilling the work of the worker at home or outside the workplace with technological communication tools within the scope of the work organization created by the employer. Since there will be changes in the working principles, it is possible only with mutual will. Hence it is for the advantage of the employee. Through including additional provisions for working remotely into the existing contracts , it will be possible to work from home like this.

Compensatory work. Pursuant to the Article 63 of the Labor Law no.4857, situations where compensatory work may be done can be grouped under three headings:

Business interruption for mandatory reasons, Workplace holidays before or after national and public holidays or working significantly below normal working hours at workplace for similar reasons, full holiday, Cases in which the worker is given permission upon their request. In these cases, the employer can make compensatory work for periods not worked within two months. Compensatory work cannot be more than three hours a day, provided that they do not exceed the maximum working time per day.

Short-time working allowance may be resorted. Short-time working allowance is another tool that can be used to eliminate the financial problems that may arise if the size of the epidemic increases, for employees’ getting part of their wages. In the Law no.4447; it is indicated that “In cases where the weekly working hours in the workplace are temporarily reduced or the work is stopped completely or partially temporarily due to general economic, sectoral or regional crisis and compelling reasons, short-time working may be conducted in the workplace provided that it does not exceed three months.

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

Short-time working application shall be made by the employer. The employer should give written notice to İŞKUR's units located in provinces and districts and (if there is a signed collective agreement) to the labor union as a party to the agreement. Due to Covid-19 situation, the applications shall be made via e-mail to İŞKUR's Provincial Directorates as of 23 March 2020. In Short-time working if the existence of compelling reasons arising from the periodic situations due to general economic, sectoral or regional crisis and external effects is claimed by the confederations of workers and employers unions or if there is a strong sign in this direction, the issue is evaluated and decided by the Board of Directors of İŞKUR. The duration of the short-time working allowance is as short as the working period, provided that it does not exceed three months and short-term employment payments are deducted from the unemployment allowance.

Also for the usage of unpaid leave, approvals of the employees should be sought, it is also important to inform the unions as well in terms of collective employment agreements. The employer notifies the employee in writing that they want to leave out the employee for unpaid leave, and if the employee accepts this proposal in writing within six working days, the employment contract is suspended. If the employee does not accept, the change in working conditions will not bind the employee. If the employer has a valid reason for their will to leave out the employees for unpaid leave, the employer may choose to terminate the employment contract by explaining their reason in writing and complying with the notice period. In this case, the employee covered by the job security provisions, can file a lawsuit for invalid termination. This termination is named as "amendment termination." There are no specific provisions regarding works councils in Turkish Labor Law.

The short working option can only be applied if approved by ISKUR.

Furthermore, following the initiation of short working, the employers must also notify the employees and unions.

For the other options, the employer must notify the relevant employees and unions.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

Short-time working compensation and unpaid leave compensation may be considered as governmental programs related to closure of the workplace due to pandemic for a limited period of time.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

In order for the worker to be entitled to short-time work allowance, they must fulfil the conditions for entitlement to unemployment insurance, excluding the termination of the employment contract. The employee shall be entitled to unemployment benefits in terms of working time and number of unemployment insurance premium payment days at the beginning of short time working which is being working under employment agreements for the last 120 days before the beginning of short-time working and having paid unemployment insurance premium for at least 600 days in the last three years. Daily short-time working allowance is the 60% of the average daily gross earnings calculated by taking into consideration the insured's earnings based on premium for the last 12 months.

The amount of short-time working allowance calculated in this way cannot exceed 150% of the gross amount of the monthly minimum wage for workers older than 16, as per Article 39 of Law no.4857. Transactions regarding the transfer of insurance premiums and health services for those benefiting from short-time working allowance are carried out within the framework of the principles set forth in Law no.5510. Payments made as short-time work allowance are deducted from the initial unemployment benefit period. In case of short-term work due to compelling reasons, short-working allowance payments start after a one week period indicated in the clause (III) of Article 24 within the Law no.4857 and Article 40 of the same Law.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Employer's short-time application request is evaluated by ISKUR in terms of cause and form. The suitability determination of the application is made by the labor inspectors of the Ministry of Family, Labor and Social Services. Such inspection is expected to be made on file without actual physical inspection. Further inspections may be in place going forward on the applications which are currently in place

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 19 June 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.