Update: Measures to Reduce the Impact of COVID-19 on Employment Extended

Posted in COVID-19 Corporate, M&A and securities

In response to the economic impact of the spread of Covid-19 in Turkey, the Turkish Parliament passed Omnibus Law no. 7244 (“the Law”) on April 17, 2020. To provide employees with certain assurances, Article 9 of the Law amended, among other things, several relevant parts of the Turkish Labor Law (Law no. 4857). As noted in a previous article there are three main measures outlined in Article 9 that stand out in particular: (1) the ban on termination, prohibiting employers from terminating employment arrangements, save in exceptional cases where termination is based on any of the just causes mentioned in the Labor Law; (2) the furlough period, allowing employers the right to unilaterally furlough their employees; and (3) the short-term work allowance, which may be granted to the employees of eligible employers whose business operations have been impacted by the pandemic; application for the short-term work allowance is made to and approved by the Turkish Employment Agency (İŞKUR).

The Law, in addition to introducing these three measures, also granted the President the authority to extend the applicable periods for each of the three measures via presidential decision. Since the passing of the Law, the President has extended the applicable periods for each measure several times. On August 30, 2020, the short-term work allowance period was extended by Presidential Decision 2915. Most recently, on September 3, 2020, the termination ban and furlough periods were extended by Presidential Decision 2930. Below is a summary of all previous extensions as well as the current extension situation applicable to each of the three measures.

1)  Ban on Termination

The ban on termination has been extended until November 17, 2020.

Initial Ban

First Extension

Second Extension

Third (Current) Extension

April 17 – July 17, 2020

until August 17, 2020

until September 17, 2020

until November 17, 2020

2)  Furlough Period

The furlough period has been extended until November 17, 2020.

Initial Period

First Extension

Second Extension

Third (Current) Extension

April 17 – July 17, 2020

until August 17, 2020

until September 17, 2020

until November 17, 2020

3) Short-Term Work Allowance

The timeframe during which businesses may apply for or extend current short-term work allowances has been extended for another two months.

Initial Period

First Extension

Second Extension

Third (Current) Extension

April 17 – July 17, 2020

One-month extension

One-month extension

Two-month extension

Extensions to the short term work allowance measure commence differently depending on whether a business is currently receiving the allowance. Extensions for businesses actively receiving short-term work allowances commence when the current work allowance grant expires. For businesses whose allowance grants expired prior to the entry into force of the abovementioned extensions, the first one-month extension to apply for a grant commenced on July 1, 2020.

Under the current legal framework, the President has the authority to further extend the termination ban and the furlough period, in increments of up to three months, until the end of June 2021. The short-term work allowance period may be extended by Presidential Decision until the end of December 2020.  These differing timelines and the variable calculation of extension periods make it essential that all concerned parties remain abreast of legal updates.

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