As the novel Covid-19 pandemic has dramatic consequences for economy and business, it is currently forcing employers to find a solution to cope with challenging circumstances. One of the significant aid packages is short-time work. Short-time work enables companies drastically affected in a downturn to either send their workers home or significantly reduce their hours without having to lay them off. Here is an examination of key legal issues for applying short-time work.
Short-time work and its conditions are regulated in the Provisional Article 2 of the Unemployment Insurance Law No. 4447 (“the Law no.4447”). According to the relevant provision; in the event that the weekly working hours in the workplace are temporarily reduced or the work is stopped completely or partially temporarily due to the general economic, sectoral or regional crisis and compelling reasons which are not caused by Employer, short-time work may be applied in the workplace not to exceed three months. This period can be extended up to six months by the decision of the President of the Republic of Turkey. Considering that the Turkish government is ready to take all necessary measures to fight the ongoing Covid-19 outbreak, it is possible to meet the new amendment on the short-time work term in the forthcoming days.
Although there is not any clear definition for pandemic under the compelling reasons, considering that the government has announced that employers are entitled to apply for reductions in working hours within the scope of Covid-19 measures. In addition, in the exercise of the caution to contain the spread of the Covid-19 global outbreak, the Turkish government has amended short-time work conditions in order to facilitate its implementation in accordance with the Law on The Amendment of Certain Acts No.7226 (“the Law no.7226”). Accordingly, it may be regarded as certain that Covid-19 is considered as a compelling reason. It should be highlighted that employers still have to provide evidence of an adequate causal link between the work stoppage and the coronavirus outbreak so as to demonstrate whether they meet the existing eligibility criteria in their applications for short-time working.
According to the short-time work definition in the Regulation on the Short-Time Work and Short Time Work Fund (“the Regulation”), it refers to either (i) reducing the working hours in the whole or a part of the workplace by at least a third temporarily; or (ii) ceasing the activity completely or partially for at least four weeks without seeking continuity, both of which shall last for at most three months unless it is extended by the President.
Workplace activities in a workplace where short-time work is applied can be ceased partially or completely for at least four weeks to a maximum of three months or decreased its weekly working hours by at least 1/3. Without prejudice to the conditions, the employer may decide for how long the short-time work shall be applied. Having started short-time work in the workplace, the employer can terminate the process before the three-month period expires.
In the light of above-mentioned explanation, in order to apply short-time work, the employer should file an application before Turkey Employment Agency and the labour union (if any), along with the evidences demonstrating the effects of coronavirus on the operations in the workplace and its preference between following two options:
1. To cease workplace activities completely
In such a case, the daily short-time allowance which is 60% of the average daily gross salary calculated based on the preceding twelve months salary shall be paid to the employee who meets the specified criteria for at least four weeks and at most three months. The amount of short-time work allowance calculated in this way cannot exceed 150% of the gross amount of the monthly minimum wage.
2. To reduce the weekly working hours by at least 1/3
According to the Regulation, a significant reduction shall mean the working hours applied at the workplace is temporarily reduced by at least a third of the whole or part of the workplace. Therefore, a maximum of 30 working hours is required in a workplace where operates 45 hours a week. In addition, it should be noted that while it shall take at least four weeks by considering as the work ceased completely or partially, it is not required to take at least four weeks for the short-time work due to the reduction of working hours.
Having filed a short-time work request by the employer before the Turkish Employment Agency, such a request must be found appropriate upon the examination by the labor inspectors. In addition, it is necessary for the employee to meet the working hours and unemployment insurance premium payment conditions to include the employee's name in the list of those who will be benefiting from the short-time work.
Recently, an announcement has been made by the Turkish Employment Agency regarding the procedures for the employers who wish to benefit from the short-time work as follows:
“The short-time work has been initiated to be applied within the scope of ‘compelling reason arising from the external effects due to external effects’, considering the possible effects of the new type of coronavirus (Covid-19), which emerged in the city of Wuhan in the People's Republic of China, showing its effect in many countries.
The employer who requests short-time work on the grounds of being adversely affected by the coronavirus can apply for short-time work by submitting required documents which are Short-Time Working Request Form and the Worklist to be Short Worked through an e-mail to the Turkish Employment Agency.
It is important to submit documents that demonstrate the basis for the negative impact of the coronavirus to ensure complete the examination within the shortest time without going to the workplace. Please be noted that additional documents may be requested by the employer in case of necessity. The employers will be notified once the application has been received and the applications will be sent to the Directorate of Guidance and Inspection in order to examination for the compliance of the application.”
The employer shall file the forms which can be found in the following link of Turkish Employment Agency: https://www.iskur.gov.tr/isveren/kisa-calisma-odenegi. Afterward, it shall be sent to the e-mail address of Turkish Employment Agency in order to start the examination procedure. If the application is confirmed by the Turkish Employment Agency, the employer shall announce it in a place where employees can see the notification and inform the labour union (if any). In case where a short-time work notification is not made through the announcement, the employer shall inform the employees who will be benefiting from the short-work.
In should be underlined that the short-time work allowance and the General Health Insurance premiums of the employees are directly being paid to the employees who meet the subject conditions. As it is mentioned above, the Law on The Amendment of Certain Acts No.7226 published in the Official Gazette No. 31080 dated March 26, 2020, defines more beneficial conditions on (i) working term and (ii) unemployment insurance premium for the employees. Before the Law no. 7226, the employees who have been working for the last 120 days and paid unemployment insurance premium for 600 days over the last three years may benefit from the short-time work. However, according to the Law no. 7226, the employees who have been working for the last 60 days and paid unemployment insurance premium for 450 days in the last three years shall enjoy the right for short-time work allowance until June 30, 2020. It is also declared in the Law no. 7226 that the President of the Republic of Turkey shall extend the application date until December 31, 2020, or define a different date.
In case the employer would like to start its activities before the expiry of the short-time work term, it shall inform the Turkish Employment Agency, the labour union (if any) and employees in writing six days before the activity starts.