Since December 31, 2019, when People's Republic of China notified the World Health Organization ("WHO") for unusual number of people suffering pneumonia in Wuhan, the virus known as COVID-19 has spread around the globe and caused a "pandemic". Since January 9, 2020, when the COVID-19 caused death of its first victim, total number of deaths exceeded 13,000 so far, along with more than 293,000 infections confirmed. While the virus has only spread in China at the early stage, it has now been reported in all continents of the World, with material effects to giant developed economies, such as the US and the EU. Finally, the WHO identified the situation as a "pandemic", which means global epidemic, on March 11, 2020.
In light of these circumstances, it has become obvious that the COVID-19 Pandemic started to trigger substantial legal consequences predominantly on employment law matters. We, therefore prepared the below Q&A for purposes of enlightening the initial queries that one can come up with upon the inconveniences due to the COVID-19 Pandemic.
There are several instructions provided by public authorities as regards to businesses in order to prevent the spread of the COVID-19. Some of these instructions are as follows:
As explained in Q1, it has been ordered that all cafes, theaters, gyms, cinemas, performance centers, concert halls, wedding halls, music halls, beer halls, taverns, hookah lounges, internet cafes, all types of game centers, amusement parks, pools, Turkish baths, saunas and spas shall be closed as of March 17 until a further notice. In addition, restaurants have been ordered to remove tables and offer only takeaway and delivery services and supermarkets have been ordered to be open only between 09.00-21.00 and to host a number of customers not more than 1/10 of its square meter.
In case an employer temporarily shuts down its businesses, stores or facilities upon a government authority's announcement or decision such as in Q1, such employer may refrain from paying its employees' wages in full considering the fact that such shut-down may be considered as a compelling reason for employer. In such a case, employer shall be allowed to pay its employees' wages in half for the first week of such compulsory shut-down. In the event such compulsory shut-down takes more than one week, then relevant employees shall have the right to terminate their employment contracts at once without considering notice periods under Article 25.3 of Turkish Labor Code ("TLC"). However, in such a case, employer shall be responsible for paying employee's severance pay calculated considering such employee's length of service.
As long as a temporary shut-down decision is taken at employer's sole discretion as a precautionary measure to prevent the spread of COVID-19, it shall be considered as a business decision and such employer shall pay its employees' wages in full. However, in such a case, employer may consider offering employees working from home.
As per Turkish law, an employee may provide his/her services remote from the workplace (e.g. from home and/or via technologic communication means), provided that employment contract allows such and employer provides all necessary equipment and materials needed to work remotely and in accordance with the equality principle which sets forth that employees working remotely (working from home) shall not be paid in full since such workers shall not be worse off than their colleagues working at the work place in terms of wage.
In our opinion, the employer may direct its employees to work from home (without asking employees for their written approval in this regard) as long as it furnishes any materials and means required for such, since it cannot be deemed to the detriment of employees considering the current spread of COVID-19; however, in any case, employer remains responsible for the accidents, which may occur during the time the employee works from home, unless employer proves it fulfilled his obligations arising out of or in connection with the employment contract and the relevant laws in order not to be held responsible for such accident.
In addition, it is worthy to note that in the event an employee with high risk of being infected with COVID-19 insists on not working from home and rather on coming to the work place, employer may be eligible to terminate such employee's employment contract due to their actions, which may jeopardize the safety of the work place and other employees and under employer's obligation to provide a healthy and safe working environment and to take all protective and preventive measures for its other employees.
Currently, a great number of employers in Turkey direct their employees to work from home considering (i) the current circumstances occurred due to the COVID-19 outbreak, (ii) the employer is obliged to provide a healthy and safe working environment for its employees as per Law on Occupational Health and Safety numbered 6331, (iii) work from home as a protection measure against coronavirus cannot be deemed to the detriment of employees and (iv) as a general principle, employees are responsible for fulfilling instructions given by their employer on the basis of employer's right to manage and as long as such instructions cannot be considered to the detriment of or impracticable for such employees. We believe that unless there are complications and/or impracticability arising out of the special circumstances of certain employees/businesses/tasks, then this should be one of the most expedient solutions that an employer can adapt.
There are six popular alternatives being used by employers before the termination of employment contracts due to COVID-19: (i) work from home, (ii) paid leave, (iii) compensatory working, (iv) short time working, (v) unpaid leave, and (vi) decrease in wages.
Employer may determine and declare a certain period or periods for the use of individual annual paid leaves based on the nature and features of the works carried out in the workplace, and employer may send all or a part of its employees (both the ones who are already entitled for an annual paid leave and those who are not) on a collective annual paid leave. However, since the related regulation sets forth that such collective annual paid leave can be provided only between certain time periods, we believe that employer may send its employees on a collective annual paid leave only as of April 1.
Apart from that, an employer, depending on the workload of the employees and departments, may ensure that employees, of which the workload is drastically lowered due to COVID-19 outbreak, are sent to paid leave, whilst the rest of its employees with required/sufficient task/workload continue to working.
Since the paid leave is designated under TLC as a benefit for employees to ensure that employees take a sufficient rest and since it is obvious that employees may not have a pleasant leave time/vacation on these days due to COVID-19, we suggest that this alternative of making employees use their paid leaves is resorted, only if an employer does not have any other alternative but unpaid leave and/or termination (so that the right of employer to designate the paid leave times of employees is not misused to the detriment of employees, by using the COVID-19 outbreak as an excuse).
As per TLC, "in the event of interruption of work due to compulsory reasons, vacationing of workplace before or after national holidays and general holidays, working significantly lower than normal or not working at all at the workplace due to similar reasons, or providing an employee with time off upon his/her request; employer may call upon compensatory work within two months in order to compensate for the time lost due to unworked periods. Such work shall not be considered overtime work or work at extra hours." Thus, an employer may consider giving off days to employees for a certain period, provided that the unworked days are compensated subsequent to the expiry of the off days within a period of 4 months1.
In the event of general economic, sectoral or regional crisis and compulsory reasons (e.g. COVID-19) (i) the weekly working time at a workplace is temporarily reduced by at least one third; or (ii) the workplace or the operation is shut-down completely or partially for at least four weeks, then such employer – on behalf of its employees – may apply Turkish Employment Agency ("Agency") (and to the relevant union, if any) for short time working (together with the reasons thereof) and may refrain from paying employees' wages and premiums for up to 3 months (which may be increased to 6 months by a Presidential order) once the application is accepted by the Agency; provided that the following conditions are met:
It is specifically announced by the Agency that (i) the process for evaluation of the short time working applications due to COVID-19 will be facilitated and be conducted online and (ii) workers in the workplaces where business is halted as a result of governmental measures, will particularly be prioritized at the evaluation of the short time working applications.
The short time working allowance is paid by the government directly to employees and its amount is equal to the 60% of employees' gross wage (in a way not exceeding 150% of the minimum wage thus TRY 4.380,99).
Once the application is made, employer shall be informed as regards to approval or denial of its application within 60 days.
No, it is not. Although they resemble each other within the terms of maximum weekly working hours (which is 2/3 of the weekly working hours for full-time employees), they are two separate institutions which do not exclude each other. The main difference of these two institutions is that part-time working can be implemented by mutual agreement of employer and relevant employees as per which their working hours and wages will be reduced on a pro-rata basis according to the needs and circumstances of the work places as impacted by COVID-19 outbreak whereas short time working can only be implemented upon Agency's approval.
Unpaid leave is not defined or allowed TLC, except for certain exceptional cases such as pregnancy leave. However, unpaid leave may constitute an option available to employees during COVID-19 outbreak, provided that the employer and employee mutually agree, in writing on its application. While either employer or employee may propose unpaid leave; if the proposal comes from employee (which is very unlikely due to unpaid leave's nature which sets forth that employee shall not be entitled to any payment or social benefit during unpaid leave), the reason for the leave request must be reasonable and the duration must be temporary. If COVID-19 spreads significantly in Turkey, this may constitute a reasonable ground due to employees' health concerns. However, it is not as simple for employers to propose unpaid leave. In the absence of a request from an employee or their consent, employers should ensure that they are using this option as a last resort and that they are not forcing employees to take such leave.
Unpaid leave must be mutually determined, upon a written notice served by the employer (unless the request comes from the employee) and accepted by the employee in writing within six working days thereupon. Otherwise, it shall not bind the employee and it will constitute an active termination of the employment contract (via settlement of Termination Payables, consisting of severance pay, notice pay and the uncovered allowances including unused annual leave).
This would nevertheless trigger a reinstatement claim by the employee, which may force the employer (i) to make the employee start at his/her former position and pay an amount equal to employee's 4 months' wage to compensate the term passed in the meantime or (ii) (instead of making the employee start at his/her former position) to pay an amount equal to his/her 4 months' wage to compensate the term passed in the meantime and pay a compensation equal to his/her wage of 4 to 8 months, together with notice and severance pays) ("Reinstatement Risk"). However, in this case, the COVID-19 outbreak should constitute a concrete argument to validate the reasoning of the employer for requesting unpaid leave, as long as it may prove its negative impacts making the continuation of the business impracticable.
In case of a such termination, it is still recommendable for the employer to invite the terminated employee for returning his/her position, when the impacts of the COVID-19 have gone and the business is returned to its normal sequence.
Based on the existence of external reasons that have significant effects on the workplaces, such decrease in sales opportunities, decrease in demand and orders, economic crisis in the country, general stagnation in the market, and considering the principle of termination of employment contract as last resort, it is possible for employers to maintain the employment contract by lowering the wages of employees provided that it is notified to relevant employees in writing, as this constitutes a substantial change in working conditions pursuant to Article 22 of TLC. In order for the wage reduction to be binding upon relevant employees, such employees must accept this notification in writing within six days thereupon. Therefore, it seems possible to make a wage reduction upon acceptance of relevant employees.
Nevertheless, claims, such as notification being accepted due to force imposed by employer or reduction in wages being made in an unfair manner may be raised by employees during or after the wage cut. In order to minimize such risks, the reduction in wages must be well justified. In other words, it shall be investigated whether there are any other measures to be taken before applying the wage cut and whether it would constitute an arbitrary reduction in the wage, based on the decrease in the revenue stream of employer. However, to the extent that wage cut can be reasonably justified by the employer, it can be stated that employee's refusal to accept this wage cut may constitute a valid ground the employer the right to terminate the contract with valid reason.
In the event compelling reasons (e.g. COVID-19) that prevent the work from running, last more than one week, then it may be deemed as a justified ground for termination both for employer and employee under TLC. For example, a quarantine lasting more than one week in the neighborhood of the workplace due to COVID-19 may constitute a justified ground for termination for employee, whereas a quarantine lasting more than one week in the neighborhood of employee due to COVID-19 may constitute a justified ground for termination for employer. In both cases, parties shall not have the burden to comply with the notice periods or to pay notice compensation; however, employer shall pay the severance pay to relevant employees in consideration of the employees' length of service. Other grounds of termination are as follows:
Nevertheless, it should be noted that, the Reinstatement Risk stands for all these terminations, just as explained above.
Just as underlined above, the employer, while effecting a termination resulting from the impacts of COVID-19 outbreak should (i) be sincere at relying on such termination ground; be in a position to prove with concrete evidences that either the whole or part of the business was impacted seriously or certain positions were not needed at all; and pursue the principle for termination being applied as the last resort; (ii) consider to invite the terminated employees for returning their positions, when the impacts of the COVID-19 has gone and the business is returned to its normal sequence.
As per Article 29 of TLC, a collective dismissal occurs where employer dismisses the number of employees set forth below due to requirements of the work and the business such as economic deterioration:
In the event of collective dismissal, it is required to notify in writing and 30 days prior to the terminations, (i) the Regional Social Security Directorate and (ii) Agency. The notification should contain information regarding the date and cause of termination and the number of dismissed employees.
If the number of the employees that will be terminated, due to the impacts of the COVID-19 outbreak, reaches the above figures, rather than effecting individual terminations, the employer should follow the collective termination procedure and consummate the aforementioned notifications. And yet, the Termination Payables (except for notice periods / pays) are still payable and the Reinstatement Risk still stands for the individual employees terminated via a collective dismissal.
Indeed, there are several measures taken by public authorities in order to minimize COVID-19's financial burden on employers. Some of these measures are as follows:
Footnotes
1 Please be informed that upon President Erdoğan's announcement on March 18 and Turkish Grand National Assembly's meeting on 24.03.2020, this period is increased to 4 months from 2 months with the Law No.7226, in order to ensure continuity in employment.
2 These criteria employees shall meet are facilitated specifically for COVID-19 applications with the Law No. 7226 dated 25.03.2020. However, for short time working applications due to reasons other than COVID-19, employees to be subjected to and benefited from the short time working shall (i) be employed by an employer at least for the last 120 days uninterruptedly before the short time working and (ii) have at least 600 days of paid unemployment insurance premium within the last three years in the event such short time working application.
