17 April 2020

While the Covid-19 (Coronavirus) epidemic affects business and commercial life in many ways, the number of people exposed to these effects of the epidemic is increasing day by day. It is seen that the effects of the epidemic in economic life are mostly reflected on the relations between the employer and employee and the continuation of the business relationship between these parties becomes more and more difficult.

Through the Law numbered 7244 on Minimization of the Economic and Social Effects of the New Coronavirus (Covid-19) Epidemic and Amendments Made on Certain Laws (the “Omnibus Law”) which has been published at the Official Gazette dated 17 April 2020 and entered into force at the same date, new precautions were taken and amendments were made in many laws by taking into consideration the effects of the Covid-19 epidemic which was declared as a “pandemia” by the World Health Organization.

Through the aforesaid Omnibus Law, important precautions have been introduced (i) to ensure the continuity of employment and (ii) regardless of whether they are covered by the Labor Law No. 4857 (the “Law”) or not, to protect all employees who are on unpaid leave and cannot benefit from reduced working allowance or whose employment agreement has been terminated and cannot benefit from the unemployment allowance.

Pursuant to the Temporary Termination Ban which has been inserted to the Labor Law:

  • Any employment or service agreement, regardless of whether being covered by the Law or not, shall not be terminated by the employer for three months beginning from 17 April 2020, the date on which the Omnibus Law has been entered into force.
  • In cases where the termination ban is applied pursuant to this provision, the employer is entitled to put the employee on unpaid leave completely or partially; provided that such unpaid leave does not exceed three months term.
  • Being on unpaid leave by the decision of the employer shall not give the employee the opportunity to terminate the employment agreement for a valid reason.
  • In case that the employment agreement has been terminated in contradiction with the matters set forth under this provision, an administrative fine in the amount of the monthly gross minimum wage as of the date of such termination shall be imposed against the employer or the representative of the employer for each employee whose employment agreement has been terminated,
  • The President of the Republic shall be able to extend the term of this termination ban and the term of unpaid leave up to six months if the spread of the Covid-19 epidemic cannot be prevented; and accordingly, its effects continue.

First of all, we would like to point out that the opportunities brought by the Omnibus Law shall be benefitted by not only the employees who are within the scope of the Law, but also by all employees who are subject to the Turkish Law of Obligations No. 6098, the Law on the Arrangement of Relations Between Employees and Employers in the Press Profession No. 5953 and the Maritime Labor Law No. 854.

Pursuant to the aforesaid arrangement introduced by the Omnibus Law, the requirement to submit the unpaid leave to the approval of the employee is temporarily abolished and the results that may arise against the employer are blocked in case the employer decides on the unilateral unpaid leave. We are considering that the Government aims to resolve the grievances of employees who are in this situation with the cash fee support.

Immediate termination of the employment agreement with just cause due to conducts of the employee which do not comply with rules of ethics and goodwill is not within the scope of the termination ban which has been introduced by the Omnibus Law. Therefore, the termination ban shall not be applied for employees who act against the rules of ethics and goodwill.

It is envisaged to impose administrative fines against employer or employer representatives in order to prevent the termination of employment agreements in violation of the arrangements introduced by the Omnibus Law. By taking into consideration the fact that the prescribed amount of administrative fine is one-month gross minimum wage for each employee, it is controversial whether such administrative fine would be deterrent for employers.

In addition, although there is no direct regulation regarding the legal consequences of termination of employment agreements due to not complying with the termination ban, it is stated in the preamble that the termination made by the employer in violation to this article shall be deemed invalid. The fact that such an arrangement was included in the preamble also shows that the termination by the employer, which does not comply with this ban introduced by the Omnibus Law, may not result in a valid termination. Therefore, the employee whose employment agreement has been terminated in accordance with Article 21 of the Law may file a lawsuit in order to benefit from the job security provisions.

Pursuant to the Temporary Cash Fee Support which has been inserted in the Unemployment Insurance Law:

  • Having an employment agreement which continues as of the date on which the Omnibus Law has been entered into force, all employees who (i) are on unpaid leave within the framework of the temporary Article 10 of the Law and (ii) cannot benefit from the reduced working allowance and (iii) have been terminated after 15 March 2020 and  are not able to benefit from unemployment allowance, shall be entitled to receive a cash fee support in the amount of TL 39.24 per each day from the unemployment insurance fund during the term of termination ban as long as the period they are unemployed or on unpaid leave, provided that they do not receive retirement pension pay (yaşlılık aylığı) from any social security institution.
  • No deduction shall be made from the TL 39.24 cash fee support to be made for the employees, except for stamp tax.
  • However, in the event that the employee who benefits from the cash fee support is continued to be employed by the employer, an administrative fine in the amount of the monthly gross minimum wage stipulated by the Minimum Wage Determination Commission of the Ministry of Labor and Social Security within the scope of the Law shall be applied to the employer separately per each worker and per each month. Also, the cash fee support paid to the employee shall be collected from the employer along with the legal interest to be processed beginning from the date of payment.
  • Those who benefit from the cash fee support and who are not deemed as general health insurance holder or as the dependents (bakmakla yükümlü olunan kişi) of the general health insurance holder shall be considered as a general health insurance holder as per the Social Insurances and General Health Insurance Law No. 5510 and their premiums related to general health insurance shall be covered by the unemployment insurance fund.
  • The Ministry of Labor and Social Security is authorized to determine the payment procedures and principles regarding cash fee support and to eliminate the hesitations that may arise in connection with the implementation of this article.

In accordance with the provision introduced by the Omnibus Law through amending the Unemployment Insurance Law, the fact that the cash assistance in the amount of TL 39.24 to be made to the employees is lower than the wage paid to the employees who benefit from the reduced working allowance and unemployment insurance has already brought great controversy.

Pursuant to the Conditions of Benefitting from the Reduced Working Allowance Added to the Unemployment Insurance Law:

  • For reduced working applications made by employers on the basis of compelling reasons under Covid-19, being effective beginning from 29 February 2020, the possibility to benefit from the reduced working allowance has been introduced without waiting for the completion of the eligibility assessment and shall be done on the basis of the employers' declaration.
  • However, following after benefitting from reduced working allowance as per this provision, in case it is understood as a result of the compatibility assessment that overpayments and improper payments have been made due to incorrect information and documentation provided by the employer, these payments shall be collected from the employer along with their legal interest.
  • It is explicitly regulated that the eligibility assessment is excluded from the completion of the reduced working process which shall be finalized within 60 days.

As we have mentioned above, the conditions for benefitting from reduced working allowance have been facilitated with the previous amendment of the law, and in accordance with this amendment, it is aimed to accelerate the processes related to intensive applications caused by Covid-19 epidemic and thereby increase the efficiency of reduced working.

We wish healthy days.


For further information, please contact:

Attorneys at Law
+ 90 (212) 236 36 44

Levent Mah. Sülün Sok. N.23
34330, Beşiktaş/Istanbul

This client alert provides very brief and generic information on certain recent legislative developments, for informational purposes only and is not intended and should not be construed as a legal advice.