Coronavirus and Employment Law Series – 2: Adaptation of the Work and the Workplace by the Employer due to Changed Circumstances

The coronavirus disease (Covid-⁠19) was declared a “pandemic” by the World Health Organization (WHO) on March 11, 2020; spreading rapidly in Türkiye and around the world, the disease has significantly affected both daily and economic life. The WHO announced that, as of March 13, 2020, the epicenter of this disease, which spread to the world from the city of Wuhan in the People’s Republic of China, was Europe. As is known, almost 50% of Türkiye’s exports go to European Union countries. In addition to production being affected by the measures taken and by “voluntary quarantine” practices, the markets into which production is channeled have also been put in a difficult position. It is clear that all these processes will also have certain legal consequences for businesses.

In this article, the legal issues that may arise for employees and employers due to the “outbreak” will be assessed in a question-and-answer format under the heading “Adaptation of the Work and the Workplace by the Employer due to Changed Circumstances”. We present the second part of the article series below for your benefit.

1. Can an employee be placed on paid leave during the coronavirus outbreak? Are unpaid leave and annual paid leave the same thing?

First of all, to define annual paid leave: annual paid leave is the right to rest that the employee earns after one year of work. The authority to determine when annual leave will be used has been considered to fall within the scope of the employer’s right of management.

“Since an employee to whom the employer has granted paid or unpaid leave cannot be expected to go to the workplace during the leave, there can be no question of absenteeism in this case. However, since determining the timing of annual leave falls within the scope of the employer’s right of management, the employee cannot leave of his or her own accord. The employee’s failure to come to the workplace on the ground that he or she is using his or her annual leave constitutes absenteeism unless the employer regards the employee as being on leave.” (Court of Cassation (Yargıtay), 9th Civil Chamber, Docket No. 2007/21656, Decision No. 2008/18647, 1.7.2008).

The most important point to be noted here is that paid leave may be granted to the employee not only as annual leave but also for other reasons apart from annual leave, and that paid leave granted for other reasons cannot be deducted from annual leave. Art. 56/4 of the Labor Law (İK) provides as follows: “Other paid and unpaid leave, or rest and sick leave, granted by the employer during the year cannot be deducted from annual leave.”

In connection with the coronavirus, the employee may be granted paid leave. The point to note here, however, is that the paid leave granted cannot be deducted from annual leave. It is precisely to remedy the drawbacks of this situation that our employment legislation provides for the institution of “compensatory work”. Since this subject will be examined in detail under a separate heading, we confine ourselves to merely mentioning it here.

2. What is unpaid leave? Must the employer obtain the employee’s written consent when it wishes to have the employee take unpaid leave? Is unpaid leave regarded as a material change in working conditions?

Unpaid leave refers to the period during which the employment contract is suspended and the mutual obligations, such as the employee’s obligation to work and the employer’s obligation to pay wages, are not performed. Under İK Art. 22, this constitutes a material change in working conditions. Where there is a material change, it must be notified to the employee in writing, and the employee must accept the proposed change in writing within six days.

“If the employer unilaterally introduces unpaid leave, this must be regarded, in respect of the employee who does not accept it, as ‘termination by the employer’.” (Court of Cassation, 9th Civil Chamber, Docket No. 2017/15110, Decision No. 2020/2319, 17.02.2020).

Unpaid leave is a special practice relating to the suspension of the employment contract. Although the law contains specific provisions on unpaid leave, there is no general, comprehensive provision. For this reason, leave should primarily be used in accordance with the employment contract signed between the parties and the collective labor agreements.

Even if the employment contract signed between the parties gives the employer the right to place the employee on unpaid leave, the employee’s written consent will be required for unpaid leave to be implemented. Since the provision of the employment contract on placing the employee on unpaid leave stipulates no period, it gives the employer the right to place the employee on unpaid leave at any time; nevertheless, for this practice the employee must accept being placed on unpaid leave.” (Court of Cassation, 7th Civil Chamber, Docket No. 2015/10126, Decision No. 2015/8331, 11.5.2015)

If the employee does not consent to unpaid leave, the employer must give written notice that the change it wishes to make to the contract is based on a valid reason. An employer that has given written notice of its valid reasons may terminate the contract by complying with the notice periods. However, an employee who believes that the reasons given cannot be regarded as valid will be able to file an action against this measure.

3. Can the employer place its employees on unpaid leave because of the coronavirus?

It is common knowledge that many workplaces have run into difficulties because of the measures taken in connection with the coronavirus. Employers facing an economic bottleneck are reducing their production volumes or temporarily closing their businesses. In this situation, it is clear that the employer will be unable to pay, or will refrain from paying, the employees’ wages. Our legal order permits, in these periods of economic contraction, the suspension of the employment contract and the introduction of unpaid leave without obtaining the employee’s approval.

"If the defendant employer company falls into financial difficulty due to an economic crisis, it may resort to unpaid leave in order to overcome this difficulty. The employee is under no obligation to accept unpaid leave. However, if it is proven that unpaid leave was introduced genuinely in order to overcome economic difficulties and thereby to maintain the employment relationship, this situation constitutes a valid reason for terminating the employment contract of an employee who does not accept the unpaid leave." (Court of Cassation, 22nd Civil Chamber, Docket No. 2011/3323, Decision No. 2011/4275, 14.11.2011)

As of the date of publication of this article, a bill that would prohibit employers from dismissing their employees for a period of 3 months is on the agenda. If this bill becomes law, the most employers will be able to do is place their employees on unpaid leave. The employee’s consent will not be required for this.

4. Can the employer place employees on leave collectively, and under which law is collective leave regulated and during which period can it be used?

During the period from the beginning of April to the end of October, the employer or the employer’s representative may place all or some of the employees on collective leave. In this case, the employees placed on collective leave are deemed to have used their annual leave (paid leave). In collective leave, the employees start their leave at the same time and the end of the leave is determined. Collective leave may be determined so as to also cover employees who have not yet earned the right to annual paid leave. It is also possible for the employer to exercise the right to collective leave in connection with the coronavirus.

According to Art. 11 of the Regulation on Annual Paid Leave, “Where collective leave is applied, the employer or the employer’s representative may keep a sufficient number of employees out of the collective leave for essential situations such as the protection of the workplace or the maintenance, preparation, cleaning or securing of the tools, equipment, fittings or machinery at the workplace. The annual leave of those in this situation shall be granted before or after the collective leave period, on a date of their choosing.”

5. What is compensatory work? Can the employee or the employer propose compensatory work because of the coronavirus?

Compensatory work may apply where work stops for unavoidable reasons or before or after national/general holidays, where work at the workplace is performed significantly below normal working hours or is suspended entirely, or where the employee is granted leave at his or her own request. At workplaces where compensatory work is applied, the employer’s obligation to pay wages continues, while the employee’s obligation to work is postponed to a later date.

The coronavirus outbreak, which has caused many workplaces to close and has brought many restrictions with it, will clearly be regarded as a compelling reason. Accordingly, where work is stopped or working hours are significantly reduced, the employer may, under İK Art. 64, ask employees to perform compensatory work within four months for the periods not worked. The employee may also, by not working during this period, propose compensatory work for the future. However, the employer is not obliged to accept each and every request. Nevertheless, when rejecting such a proposal, the employer should also take into account the speed at which the outbreak is spreading and the employee’s particular circumstances and health.

An employer that is to have compensatory work performed must clearly state which of the reasons listed in Article 64 of the İK the work is based on, and must notify the employees concerned of the date on which the work will begin.

It is uncertain when the current outbreak will lose its effect. In this case, the employer will not be able to determine, before taking measures, when the compensatory work will be performed. What is important here is that the employee be notified in advance, within the framework of the rules of good faith, of the time when work will be performed. Once this notification is made, an obligation will arise for the employee, and if the employee does not perform the compensatory work at the times so determined, a breach of the obligation to perform will occur. Whether the employee has acted in breach of the obligation to perform will be assessed according to the specific circumstances, such as whether the epidemic has lost its effect.

Compensatory work may not exceed 3 additional hours of work per day. In any event, daily working time may not exceed 11 hours. The employee is paid his or her wages in full (without any deduction) for the days not worked. For this reason, no separate wage is paid to the employee for the times when he or she performs compensatory work.

6. What are overtime work and extended-hours work? Must the approval of an employee who performs overtime work or extended-hours work because of the coronavirus be obtained?

Overtime work is regulated in İK Art. 41 et seq. Overtime work is work exceeding 45 hours per week. Where overtime work is performed, a wage 50% higher is paid. Where weekly working time is less than 45 hours, work up to 45 hours is called extended-hours work. The wage paid for this time is 25% more than the normal wage. Overtime work may not exceed 11 hours a day or 270 hours a year.

Because of the current outbreak, certain sectors, above all the health sector, have had to perform overtime work in order to meet demand. In particular, overtime work may have become necessary out of need, in order to meet a public need or to ensure public safety, such as the supply of masks, alcohol-based disinfectants and certain food products. Where unavoidable reasons exist, wages are paid as explained above. However, where unavoidable reasons exist, no upper limit has been set for the work and the employee’s approval is not required. Article 9 of the Regulation on Overtime Work and Extended-Hours Work under the Labor Law states “The employee’s written approval must be obtained in order to have overtime work and extended-hours work performed. This approval is not required for overtime work and extended-hours work performed for unavoidable reasons or in extraordinary situations.” and thereby provides for an exception concerning extraordinary situations.

“Likewise, it is possible to have the employee work outside his or her job description or work overtime in urgent and incidental situations. The employer’s right of management should be interpreted more broadly in such extraordinary situations. (...) On the other hand, within the framework of Article 42 of Labor Law No. 4857, overtime work for unavoidable reasons is not subject to the employee’s acceptance, and the employee must comply with the instructions to be given by the employer, with due regard to the statutory limits. Changes that fall within the scope of the employer’s right of management or that are based on a valid reason cannot be characterized as a material change in working conditions. Indeed, the same point was emphasized in the decision of the Assembly of Civil Chambers dated 04.11.2009, Docket No. 2009/416, Decision No. 2009/474.” (Assembly of Civil Chambers of the Court of Cassation, Docket No. 2015/22-2359, Decision No. 2018/1832, 4.12.2018)

7. Will those who worked overtime before or after the coronavirus measures were taken be able to use the right to free time? In this case, is the coronavirus regarded as force majeure?

Under İK Art. 41, an employee who performs overtime work or extended-hours work may, if he or she so wishes and provided that he or she applies to the employer in writing, use as free time, instead of the increased wage for this work, one hour and thirty minutes for each hour of overtime work and one hour and fifteen minutes for each hour of extended-hours work. The employee uses the free time to which he or she is entitled within six months, during working hours and without any deduction from his or her wage.”

Under İK Art. 41, the employee will be able to use the right to free time for the extended-hours work or overtime work performed before or after the coronavirus measures were taken. However, because of the measures (closure of the workplace, performance of overtime work), it may not be possible for the employee to use the right to free time within the 6-month peremptory period specified in the law. In this case, it must be accepted that, by regarding the coronavirus outbreak as force majeure, the six-month peremptory period does not run for the employee. If the employee so wishes, he or she will also be able to waive the free time and receive the increased wage instead.

8. What is short-time working and what are its conditions? Can the short-time working allowance be applied for because of the coronavirus? What is the effect of short-time working on social benefits?

Since a great many works have been produced on the short-time working allowance to date, the short-time working allowance will be touched on only in outline.

Short-time working will be at issue where, because of a general economic, sectoral or regional crisis or compelling reasons, weekly working hours at the workplace are temporarily reduced by at least one third, or activity at the workplace is stopped wholly or partly for at least four weeks, without any requirement of continuity.

To be able to apply for the short-time working allowance, an economic crisis or a compelling reason must have occurred. A compelling reason is defined in Art. 3/1-h of the Regulation on Short-Time Working and the Short-Time Working Allowance as “periodic situations arising from external effects that do not stem from the employer’s own direction and management, that could not be foreseen and, as a result, cannot be eliminated, and that result in a temporary reduction of working time or the complete or partial stoppage of activity, or situations such as earthquake, fire, flood, landslide, epidemic disease and mobilization”. According to this definition, the coronavirus outbreak may be accepted as a compelling reason. It is possible to apply for the short-time working allowance in connection with the coronavirus outbreak. In addition, the fact that the employer has previously benefited from short-time working on a different ground does not prevent it from benefiting once again in connection with the coronavirus.

In order to benefit from short-time working, the employer must not dismiss any employee, during the period in which short-time working is applied at the workplace, on any ground other than the reasons set out in subparagraph (II) of the first paragraph of Article 25 of Labor Law No. 4857.

Short-time working is carried out for at least four weeks, without any requirement of continuity, and for a maximum of 3 months in total. The time slot within the daily, weekly or monthly working time in which short-time working will take place is determined by the employer, taking into account the customs of the workplace and the nature of the work.

“To be able to benefit from short-time working, the employer must have been seriously affected by the economic crisis. (...) The employer is not obliged to apply short-time working to the whole of the workplace. Depending on its needs, it may also request short-time working for a specific unit only. It is also possible for short-time working to be applied for different periods in each section of the workplace.” (Court of Cassation, 9th Civil Chamber, Docket No. 2014/10853, Decision No. 2014/13443, 28.4.2014)

For employees to be able to benefit from the short-time working allowance because of the coronavirus, the employer’s request for short-time working must be found appropriate, and the employee must be subject to short-time working, must have been subject to a service contract for the last 60 days as of the date on which short-time working begins, and must meet the requirement of premiums having been paid for at least 450 days in the last 3 years.

During short-time working, the employment contract between the parties does not end; it is suspended for 3 months. When the short-time working period expires, the suspension arising from the law ends. Although mutual obligations such as working and paying wages are not performed during this period, the parties remain bound by the duty of loyalty and ancillary obligations. If the compelling reason does not cease despite the end of the 3-month period, the suspension may this time be continued through unpaid leave.

A point that will become important here is what will happen to the employee’s social benefits (bonus, fuel, child, education, holiday, shoe allowances, etc.). Since the employee does not actually work on the days for which the short-time working allowance is paid, it is not possible for the employee to become entitled to social benefits for those days. “Since, during the short-time working period, the employee’s obligation to work and the employer’s obligation to pay wages are suspended, and since, by law, payment is made only by the institution, it is not possible to become entitled for this period to the social benefits arising from the collective labor agreement.” (Court of Cassation, 9th Civil Chamber, Docket No. 2018/9973, Decision No. 2018/22978, 12.12.2018)

This extraordinary situation will also give rise to many legal disputes. Throughout all these processes, it will be in the parties’ interest to obtain legal support from a lawyer in order to avoid any loss of rights.

Att. Ömer Çebi

Trainee Att. Batuhan Özata

This article is a general assessment prepared in accordance with the legislation in force on its date of publication; it does not constitute a legal opinion. This English text is a translation of the Turkish original; in case of any discrepancy, the Turkish version prevails.