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Evaluations on the Corona Virus (Covid-19) Outbreak within the context of the Labor Law

2020, Erdemir&Özmen Attorney Partnership

Evaluations on the Corona Virus (Covid-19) Outbreak within the context of the Labor Law

In our Country, a number of measures have been taken due to the corona virus which caused a pandemic. As is known, the Ministry of Interior of the Republic of Turkey has ordered that the activities of certain workplaces be temporarily closed, to be effective as of 24:00 on 16.03.2020. Due to the official orders issued by the public authorities within the scope of the cover letters, decrees and notices published, these workplaces have mandatorily suspended their activities temporarily in whole or in part. There are also workplaces which have reduced their working hours or have limited their activities due to the current situation. While some of the workplaces have started to apply the system of working from home, the employees of the other workplaces have taken unpaid leaves upon the instruction of their employers or those other workplaces have tried to continue their activities in different ways. Therefore, it is also necessary to address the effects of the outbreak on employment contracts.

It should be stated importantly that the statements we submit below will be valid only for the employers and the employees who work at the workplaces whose activities become partly or entirely impossible, whose working hours are reduced due to the current situation or which are closed temporarily by virtue of the official orders. 

Evaluations with regard to the employees infected by the virus or put in quarantine due to the corona virus outbreak:

As is known, a 14-day quarantine implementation is carried out for those who have been infected but then recovered, for those who have come to Turkey from abroad and for those who have shared the same house or office/workplace or have been present at the same location with the persons infected by the virus. On the other hand, those infected by the virus continue receiving treatment in an isolated way at the special service rooms in hospitals.

The question “What will be the fate of the employment contract?” remains therefore on the agenda, in case there are employees who have been put in quarantine or who are infected and have been taken under treatment.

Although our legislation contains no explicit provision in this regard, it may come into question for the employee to be granted sick leave under a medical report due to the quarantine conditions being applied to the employee or by the reason that the employee’s state of health poses a threat against the public health. In case the employee cannot take sick leave, it may be necessary for the employee to take annual leave.

In the case that the workplace is put in quarantine and that this period exceeds one week, the employee or the employer may terminate the employment contract for such justifiable reason pursuant to the article 24/III of the Labor Code numbered 4857 (“the Labor Code”), as we will explain in more detail below.

A half wage for one week may be paid to the employee who cannot work or cannot be employed due to the corona virus outbreak. If the epidemic disease situation still makes the performance of the work partly or entirely impossible although one week has elapsed, the employer will not be under the obligation to pay the wage until such time as this situation ceases to exist.

In case an employee at a workplace catches corona virus, another person working at the same workplace may terminate his/her employment contract for the justifiable reason on this ground (The Labor Code, art.24/I-b). 

On the other hand, in the case the Health Board establishes that the employee’s disease is incurable and that the employment of the employee at the workplace is therefore inconvenient, the employer may terminate the employee’s employment contract for this justifiable reason (The Labor Code, art.25/I-b).

Evaluations on payment of salary and other fringe benefits to employees by the workplaces whose activities are suspended temporarily in line with the official orders issued due to the corona virus outbreak:

In principle, the employer is obliged to pay his employees’ salaries and other fringe benefits in case the workplace is closed temporarily.

However, pursuant to the article 40 of the Labor Code, the employers may pay a half wage to their employees in case of compelling reasons. The compelling reasons are set out as the reasons that will require the cease of the work for a period more than one week at the workplace where the employee is employed (the Labor Code, art.24/III) and the reasons that prevent the employee from working at the workplace for a period more than one week (the Labor Code, art.25/III). 

Pursuant to both the legal arrangements made in our domestic law and the established jurisprudences of the Supreme Court of Appeals, epidemic diseases are considered as a “compelling reason”. We are of the opinion that, in the concrete case, the temporarily closure of the workplaces due to the corona virus outbreak will be considered as a “compelling reason” under the Labor Law.

Within this context, in case the workplace is temporarily closed in virtue of the orders issued by public authorities, it may come into question for the employer to pay a half wage to his employee for a period of one week pursuant to the article 40 of the Labor Code.

Beyond all these, given the possibility that the negative effects of the restriction “closure of the workplaces” or of the epidemic disease on the conduct of the business and labor activities may last for more than one week, it is of importance to analyze the rights of the parties in this transition period. Our relevant evaluations are submitted under the following headings.

1. Possible consequences pertaining to the exercise of the right to immediate termination by the employer and the employee, and the relevant legal evaluations: 

In case of compelling reasons, the articles 24/III and 25/III of the Labor Code grant the employee and the employer the right to immediate termination for this justifiable reason. When the two provisions are reviewed, it is seen that the employment contract may be terminated by the employee or by the employer for justifiable reason in case of emergence of a compelling reason constituting an obstacle against working at the workplace for a period more than one week. In such case, the employee or the employer may exercise the right to termination prior to expiration of its period or without waiting for the notification period.

Pursuant to the doctrine and the jurisprudences of the Supreme Court of Appeals, it is established that the employee should be paid severance pay by the employer in case the employer terminates the employment contract as per the article 25/III of the Labor Code. 

The termination of the employment contract is a right necessary to be considered by the employee and by the employer along with its benefits and losses for each situation. Besides, it is possible to follow different alternative ways for employment contracts in this period. 

In the current situation, we are of the opinion that various incentives may be provided by administrative authorities in order to eliminate financial problems for both parties and that the entire responsibility shall not be imposed on the employer with regard to the elimination of these problems. As a concrete example for these steps, as part of “The Economic Stability Shield Package” declared by the President Recep Tayyip Erdoğan on 18.03.2020, it has been stated that supports will be provided to the employers and the employees and that, for this purpose, “Short-Time Working Allowance”, “Compensatory Working” and “Flexible and Remote Working Models” in our legislation will be put into operation and that a temporary income support will thus be provided to the employees at the workplaces which have suspended their activities and thereby, the cost on the part of the employers will be reduced.

The facilities provided under the above-mentioned measure and support package can be applied at workplaces. However, of course, the employee’s and the employer’s right to termination survives as well. Nonetheless, the matter necessary to be taken into consideration at this point is whether or not such immediate termination of the employment contract without following these ways would be in compliance with the principles of equity and the rules of good faith, in spite of the facilities provided. In other words, although there are methods which might ensure survival of employment contracts and would provide more protection for both the employee and the employer; such directly termination of the employment contract may, in case of a dispute, be interpreted to the detriment of the party that makes the notice of termination. At this point, the criterion is whether or not the employment contract would survive even if “Short-Time Working Allowance”, “Compensatory Working” and “Flexible and Remote Working Models” have been implemented. Within this context, we emphasize that each incident should be considered within the framework of its own conditions; however, we are of the opinion that the method “termination” should be followed if it is not possible for the employment contract to survive in this way.  

In the light of the explanations we have provided, in case the employment contract is terminated by the employer through payment of severance pay, it is possible for the employer to face a reemployment lawsuit and it may come into question for the employer to pay the employment security indemnities.

Briefly, in the current situation, either the right to immediate termination may be exercised or “Short-Time Working Allowance”, “Compensatory Working” and “Flexible and Remote Working Models” may be preferred. The matter “which way will be followed” may vary for each workplace, depending on the terms of the employment contract, the effects of the outbreak on the workplace and on the employment contract and depending on the discretion of the parties.

At the current point, in order to reduce legal risks, our solution recommendations are as follows.

2. Working methods which may ensure survival of employment contracts, as an alternative to termination:

2.1. SHORT-TIME WORKING

It is possible to apply for short-time working allowance in respect of the workplaces which are closed temporarily and the workplaces where the epidemic disease causes a substantial reduction temporarily in the weekly working hours or causes a temporary suspension of the activities there in whole or in part.

At these workplaces, the employers will pay the employees a half wage for a period of one week [1]; and after expiration of the period, it is possible to consider the alternative “compensatory working” or “short-time working” provided that the concrete situation secures the conditions prescribed by the legislation. In the event that the effects of the corona virus outbreak continue though one of these working options has been selected and though the period determined for this alternative has elapsed, it is possible to make the interpretation that it will be more appropriate to grant the employees paid leave, or unpaid leave provided that the employee’s approval is obtained; however, if the compelling reason is nevertheless ongoing, to terminate the employment contract as the last resort. This is the least risky implementation sequence for the employers in terms of compliance with the rules of good faith. This is because; if the employer has preferred the methods by which the employee has been aggrieved minimally as per the requirements of the circumstance, this would be in favor of the employer in case of a dispute. Otherwise, if the employment contract has been terminated directly while there is a method that would harm the employee less, such direct termination might be assessed negatively. However, as we have mentioned above, this sequence may vary considering the specific conditions of each incident; and in some cases, direct termination may be inevitable.  

2.2. WHAT IS SHORT-TIME WORKING, HOW TO APPLY FOR, WHAT ARE THE CONSEQUENCES THEREOF?

Short-time working is an implementation which can be requested from the Turkish Employment Agency (“ISKUR”) providing income support to the insureds for the period, not exceeding three months, that they are unable to work at the workplace, in cases where the activity has been suspended in whole or in part for a period of minimum four weeks without seeking for the condition of continuity or the working hours have reduced temporarily at the rate of minimum one-third at the entire or a part of the workplace due to a general economic, sectoral, regional crisis or due to compelling reasons. If deemed necessary, this period may be extended up to 6 months by a Presidential Decree. Currently, there is no decree published in relation to the extension of the period in this regard. 

With the Short-Time Working Allowance, the following facilities are provided: Payment of general health insurance premiums and payment of short-time working allowance to the employees as part of the Unemployment Insurance Fund.

Pursuant to the Regulation on Short-Time Working and Short-Time Working Allowance, epidemic diseases are characterized as a compelling reason. The employers that wish to benefit from the short-time working allowance within the scope of the current situation may apply for the ISKUR by stating their justifications that the working hours at the workplace have substantially reduced or the activity has ceased due to the corona virus outbreak. In order to qualify for the short-time working allowance; the Labor Inspectors should determine that the workplace is affected by this situation, in result of the conformity assessment they have carried out following the application. In respect of the applications determined to be submitted on the basis of the reasons such as cash insolvency, payment difficulty, market shrinkage, or increase in stocks, though such reasons conflict with a general economic, sectoral, regional crisis or compelling reasons; it should be noted that such applications are rejected by the ISKUR.

Short-time working decision is an implementation which can be made alone by the employer and for which the employee’s approval is not sought. After the result of the conformity assessment carried out by the Labor Inspectors is communicated to the employer, the employer will announce the result at a workplace location visible by the employees and also communicate the result to the trade unions that are the parties to the collective labor agreement, if any. If the announcement is not possible, as a matter of fact it is possible for the employees not to be all together at the workplaces due to the current situation, the relevant written notification should be served on the employees subject to the short-time working.

In the short-time working implementation, the employer may either reduce the employees’ working hours or opt not to employ the employ the employee at all for a temporary period. In these cases, the employment contract is suspended statutorily. However; this suspension period, occurred due to the short-time working, shall not exceed three months statutorily.  

Throughout the short-time working period, the employee’s obligation to perform the work and the employer’s obligation to pay the wage are considered as suspended in whole/in part. In this suspension period, the employer is obliged to pay the employee only a half wage for each day during the one-week period that the employment contract is suspended in case of compelling reasons, pursuant to the articles 24/III and 25/III of the Labor Code. The employer has to pay a half wage to his employees, even if he does not make their employees work. 

If the employer’s request for short-time working is accepted, the employee will start to receive the short-time working allowance payment after expiration of the one-week period prescribed, pursuant to the articles referred to above.

In order for the employee to benefit from the short-time working allowance; it is, as a rule, necessary that the employer’s application has been accepted and that the employee has become entitled to the unemployment allowance in terms of the number of days for the unemployment insurance premium payment and the working times on the date the short-time working has started (Among those who are subject to employment contract for the last 120 days before the date the short-time working started, those who have paid unemployment insurance premium for a period of minimum 600 days within the last three years) and that the employee’s details are contained in the list of those who will participate in the short-time working, in result of the examination to be carried out by the Labor Inspectors.

The Law numbered 7266 on “Making Amendments to Certain Laws”, as adopted on 25.03.2020, represents a recent development regarding the short-time working allowance. Accordingly, in order to benefit from the short-time working allowance, it is necessary for the employers not to dismiss an employee other than the cases in violation of the moral and good faith rules, and an amendment has been made for the premium conditions pertaining to the employees who will benefit from the short-time working allowance. The relevant article 41 of the Law numbered 7226 is as follows:

“ARTICLE 41- The following temporary article is hereby added into the Law numbered 4447.

TEMPORARY ARTICLE 23- For the applications submitted in respect of the short-time working allowance on the ground of a compelling reason arising from the new corona virus (Covid-19), until 30/6/2020, the provision regarding the fulfillment of the conditions for entitlement to the unemployment insurance, with the exception of termination of employment contract, prescribed by the third paragraph of the additional article 2 in order for an employee to become entitled to the short-time working allowance, shall apply as having been paid unemployment insurance premium and been employed as an insured for 450 days within the last three years, among those subject to employment contract for the last 60 days before the date the short-time working has started. Those, who do not bear this condition, will continue to benefit from the short-time working allowance up to the period remaining from their last unemployment allowance entitlement, provided that it does not exceed the short-time working period.


In order to benefit from the short-time working implementation within the scope of this article, it is necessary for the employer not to dismiss an employee, with the exception of the reasons referred to in the subparagraph (II) of the first paragraph of the article 25 of the Code numbered 4857, in the period that the short-time working is implemented at the workplace.  The applications submitted within the scope of this article shall be concluded within 60 days following the application date.

The President of the Republic is authorized to extend the date of the application, submitted within the scope of this article, until 31/12/2020 and to differentiate the days determined in the first paragraph.”

The daily short-time working allowance corresponds to 60% of the insured’s daily average gross earning calculated by taking into consideration the insured’s earnings taken as basis for his last twelve months’ premium, and shall not exceed 150% of the gross amount of the monthly minimum wage. This allowance will be paid to the employee at the outset of each month, for the times that the employee has not worked. 

2.3. PAID LEAVE

Due to the corona virus outbreak, employers may grant annual paid leave to their employees within the scope of the periods and conditions specified by the article 53 and the subsequent articles of the Labor Code. Annual paid leave can be granted to the employees who have worked for at least one year, including the trial period, as of the day that they have started working at the workplace.

If a higher annual paid leave is not agreed in the employment contracts, the duration of the annual paid leave to be granted to the employees shall not be less than:

a) Fourteen days for those whose service period is between one year and five years (including five years);

b) Twenty days for those whose service period is more than five years and less than fifteen years;

c) Twenty-six days for those whose service period is fifteen years (included) and over.

Pursuant to the article 8 of the Regulation on Annual Leave, the employer is not bound by the employee’s request for annual leave. The determination of the time that the employee will start taking annual leave is included in the scope of the employer’s right to management; and it is possible for the employer to grant paid annual leaves to the employees at the employer’s own discretion but in compliance with the days referred to above as a minimum. 

Due to the corona virus outbreak, the employers may choose to grant paid leave to their employees or the employee may have a request in this direction. Accordingly, in case annual paid leave is granted, the employer does not have the right to request his employee to work remotely or in different ways during the duration of the leave.

On the other hand, pursuant to the article 55 of the Labor Code, it may be in question for the employee to be considered as if he has worked, for the days that he was unable to work at the workplace due to the disease he has caught, e.g. due to the corona virus. In this case, it is necessary for the employee to submit the Health Board Report to the employer.

Furthermore, within the scope of the article 10, entitled “Collective Leave”, contained in the Regulation on Annual Leave; the employer may introduce a collective leave covering all or a part of the employees, within the period between the first day of April and the last day of October. The employees, who do not become entitled to annual leave, may also benefit from the collective leave. Within this scope, it is seen that this method may also be preferred by the employers as from April.

2.4. COMPENSATORY WORKING 

Pursuant to the article 64 of the Labor Code and the article 7 of the Regulation on Working Times, compensatory working is described as follows:

“In cases where the business activity is suspended for compulsory reasons, the workplace is closed temporarily before or after national holidays and public holidays or in case of working substantially below the normal working hours at the workplace for similar reasons or in cases where the workplace is closed temporarily as a whole or where the employer is granted leave upon his request; the employer may make his employees perform compensatory work within four months (two months prior to the amendment by the Law numbered 7266 as adopted on 25.03.2020) for the periods that they have not worked. These works shall not be considered as overtime or work with excess periods. The President of the Republic is authorized to increase this period up to two folds thereof.

Compensatory works shall not be longer than three hours on a daily basis, provided that the daily maximum working time is not exceeded. Compensatory works shall not be carried out on holidays.”

The 2 months’ compensatory working, referred to in the former version of this article, is increased to 4 months under the Law numbered 7226 on “Making Amendments to Certain Laws”, as adopted on 25.03.2020; and the provision authorizing the President of the Republic to extend this period is added as the last sentence of the first paragraph.

As regards the employer that will apply compensatory working, it is mandatory for this employer to state expressly which of the reasons, referred to in the article cited above, is rested on by the employer for the compensatory working and to communicate to the relevant employees the date that the compensatory working will start.

Accordingly, the employer may decide to apply compensatory working due to the corona virus outbreak and implement the working system under this method after communicating to the employees the reason rested on by the employer and on which date the compensatory working will start.

In this case, the employer shall make the employees do compensatory working within 4 months following the date that the effects pertaining to the corona virus outbreak cease to exist and that the normal working period starts at the workplace.

However, the employer shall not implement compensatory working longer than 3 hours a day, provided that 11 hours i.e. the daily maximum working time is not exceeded. It is also prohibited to apply compensatory working on holidays.

2.5. REMOTE WORKING MODEL

“Remote working method”, or “working from home” or “home office” as the method’s other names known by the public, is a way of working preferred mostly by the employers particularly for white collar employees due to the corona virus outbreak. Thus, both the workplace activities are not interrupted and no loss of rights occurs on the part of the employees. 

In the article 14, entitled “On-Call Working and Remote Working”, of the Labor Code, remote working is described as “Remote working is a labor relation which is established in writing and based on the principle that the employee fulfills his obligation to perform the work at his house or outside the workplace through electronic communication means, within the scope of the working organization created by the employer.”

The employee shall become entitled to wage regardless of whether he is employed within the period of time set for remote working. An employment contract that will be concluded within this context shall contain the description of the work and the matters related to the way how the work shall be performed, the duration and location of the work, the wage and payment of the wage as well as the provisions related to equipment provided by the employer and the obligations pertaining to the protection of the equipment, the employer’s communications with the employer and the general and special working conditions.

The employer is obliged to inform the employee about the occupational health and safety measures, provide the employee with the necessary training, ensure surveillance of the employee’s health and take the necessary occupational safety measures related to the equipment provided by the employer, taking into consideration the nature of the work performed by the employee as assigned by the employer through the remote working relation. 

As specified by the statutory article, remote work is a labor relation based on remote working agreed in result of the consensus between the parties upon the employee is accepted for the job. In spite of the fact that our legislation does not contain an explicit provision in respect of whether this system will be started for a temporary period, we are of the opinion that it is possible to prefer this working method for a temporary period under extraordinary circumstances, e.g. an epidemic disease, pursuant to the employer’s right to management, in order to ensure survival of employment contracts and not to interrupt workplace activities. Thus, the employee and public health will also be observed.

In this context, the matters necessary to be taken into consideration are that the employment rights and interests of the employee should be protected identically, the employee’s working conditions should not be aggravated and the employee should continue receiving all his wages and fringe benefits other than travel allowance. In addition, the employee and the employer should have mutual consents in this direction and a written protocol should be concluded accordingly. 

In case the employee does not accept remote working for any reason, the employee may be suggested to be granted paid leave, or to take unpaid leave provided that the employee’s consent is obtained. 

For the workplaces closed temporarily by the public authorities, it is possible to assess this working alternative depending on whether the workplace activity is, by its nature, suitable for working from home. 

2.6. UNPAID LEAVE 

With regard to the grant of unpaid leave which is one of the possibilities other than the working alternatives mentioned above, the mutual consensus i.e. the employee’s consent is sought.

The model “unpaid leave” can be implemented only if the employee grants the relevant approval. In case the employee takes unpaid leave upon the employer’s instruction i.e. due to the employer’s unilateral decision without reaching the relevant consensus with the employee; such unpaid leave, implemented without obtaining the relevant consent, is considered as termination by action. In this case, it becomes possible for the employee to file a reemployment lawsuit. Therefore, in order not to encounter such a risk, care should be taken not to allow the employee to take unpaid leave in the absence of his consent.

CONCLUSION:

In this transition period, it is recommended that the situation in question is assessed mutually by considering the balance of interests between the parties. We are of the opinion that it is important to create a compromise ground in order to find the optimal solution equitable for both parties, in the negotiations that will be held between the employer and the employee.

In case it is not possible for the parties to reach a mutual consensus; we are of the opinion that, while the employer party makes the decision of termination, it is quite important to carry out an assessment thoroughly on whether or not this decision is necessary and lawful, by considering the principle that termination is the last resort. Accordingly, before making the decision of termination, it should be investigated concretely whether it is no longer possible for the employee to work, whether the performance of the employment contract becomes impossible temporarily or permanently and whether it is still possible for the employee, whose employment contract is terminated, to be employed at another workplace or in another division or department at the workplace. Otherwise, this decision of termination would bear the characteristics of an unjust termination; and in case of a legal dispute, it would be highly likely for the courts to render a decision to the detriment of the employer.

Therefore, the employers should pay attention to the principle that termination is the last resort. The employers are recommended to grant unpaid leave after obtaining the employee’s relevant approval or to grant paid leave, or to have recourse to the implementations, e.g. flexible working, short-time working or compensatory working, by taking into consideration the nature of the work and the effects of the corona virus outbreak on the work, provided that the employers comply with the conditions prescribed by the legislation in force. It is possible to terminate the employment contract in case there are concrete circumstances that do not allow the survival of the employment contract through the alternative methods mentioned above.

Resource:

[1] The Law numbered 4447, the Additional Article 2.


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