COVID-19 Update: Temporary Restriction on Termination of Employment Agreements

The Law on Reducing the Effects of the COVID-19 Pandemic on Economic and Social Life and the Law on the Amendments of Certain Laws No. 7244 (“Law“) published in the Official Gazette, numbered 31102, and dated April 17, 2020.

Prohibition on Termination of Employment Agreements – Unpaid Leave

For three months starting from April 17, 2020 to July 17, 2020 -irrespective of whether they are subject to the Labor Law or not, any kind of employment or service agreements (i.e. labor service) cannot be terminated by the employer except for terminations due to the violation of the principles of good faith and moral values and similar reasons. Effective as of April 17, 2020, however employers are entitled to unilaterally send employees on full-time or part-time unpaid leave for a maximum period of three months. Employees who exercise the unpaid leave option provided by Law, on the other hand, could not terminate their employment agreements based on just cause.

The Law also introduces an administrative fine to be imposed on employers and their representatives in the amount of the gross minimum monthly salary applicable on the date of termination (per employee) should they breach the said prohibition.

The Law authorizes the President to extend said prohibition period from three months to six months.

Financial Support for Dismissed Employees and Employees on Unpaid Leave

Employees, who are sent on unpaid leave, or whose employment agreements have been terminated after March 15, 2020, without any entitlement to unemployment pay, shall be entitled to a daily cash salary support in the amount of TRY 39.24 (1,177.20 per month) to be paid through the Unemployment Insurance Fund during such restriction period.

The payments shall not be subject to any deduction, excluding stamp tax. The stamp tax deduction rate from the payments shall be (7.59 per thousand).

Easement of Short-Term Employment Allowance

The previously regulated short-term employment allowance procedure is eased and quickened. Short-term working allowances shall be made as per declaration of employers, without waiting for the Turkish Employment Agency to complete its evaluation of the employers’ applications.

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