Short-Time Working Due to Covid-19 and Its Effect on the Termination of Employment Contracts

By Gamze Yılmaz On Apr 17, 2020

COVID-19 Salgını Sebebiyle Kısa Çalışma Uygulaması ve İş Sözleşmelerinin Sona Ermesine Etkisi

I. INTRODUCTION

Workplaces operating in all sectors have the opportunity to switch to short-time working in accordance with the “Economic Stability Shield Package” announced by the Presidency on 18.03.2020 as part of the financial measures taken towards the COVID-19 pandemic.

Questions have arisen on the status of employment contracts, in the event where applications made in the scope of “compelling reasons due to periodic situations as a result of external influences”, in consideration of the possible effects of COVID-19, are approved and short-time working allowance is implemented.

The status of employment contracts varies depending on how short-time working is applied in the period during which short-time working allowance is used and the termination of employment contracts depends on the conditions within this scope.

There is no provision that prohibits the termination of employees’ employment contracts during short-time working within the Unemployment Insurance Law and the Regulation on Short-Time Working and Short-Time Working Allowance. Different effects of suspending or decreasing the Short-Time Working operations should also be considered in this framework.

II. SUSPENDING OPERATIONS IN TERMS OF SHORT-TIME WORKING

In workplaces where operations are completely suspended in terms of short-time working in periodic conditions due to “compelling reasons due to periodic situations as a result of external influences” as a result of COVID-19, workers’ obligation to work and the employer’s obligation to pay wages will be annulled, and employment contracts will be suspended.

However, the suspension of the employment contracts does not lead to the suspension of these contracts in every sense. The work obligation of the employee and employer’s obligation to pay wages is temporarily removed while secondary obligations remain in effect. Since the primary obligations of the employment contract are terminated by the suspension of the employment contract, there will be no dismissal due to work-related behaviors of the employee such as work, performance, discipline. Since the secondary obligations arising from the employment contract are not suspended, rightful termination in cases for the violation of secondary obligations such as confidentiality is possible.

It should be noted that the suspension period of contracts with short-time working is limited to the duration of the short-time working. When the short-time working period has expired or it has been decided to terminate the short-time working practice, contracts will be effective again starting from the end date.

If short work is implemented with the suspension of operations, rightful termination of the employment contract due the violation of the secondary obligations as stated above shall be possible. An employee may not be able to use unemployment benefits due to not being able to fulfill the conditions for receiving an unemployment benefit after the short-time working allowance is cut as result of the rightful termination of the employment contract.

III. REDUCTION OF OPERATIONS IN TERMS OF SHORT-TIME WORKING

There may be a need for fewer workers as a result of the drop in production volumes in some workplaces due to the COVID-19 pandemic. There is no question of the suspension of employment contracts in places where short-term employment is implemented by reducing, not suspending, operations due to the COVID-19 pandemic.

In the practice of short-time working by decreasing operations, the employee’s work obligation continues within the scope of fewer working hours per week and the state will cover a large percentage of the wages which is the employer’s obligation. Since operations continue, the employment contract can be terminated if the conditions that may be the reason for the termination of the employment contract due to work activities arise. Therefore, workplaces where this type of short-time working is available, are not only limited to the rightful termination as a result of secondary obligations.

Depending on the reason for the termination of the employment contract by the employer, after the short-time working allowance is cut, the employee may be entitled to collect unemployment from the remaining part of the unemployment benefit.

Short-time working is introduced towards reducing the burden of temporary employment surpluses due to external economic reasons, compelling reasons and to protect the employees, and is a softer measure compared to the termination of an employment contract. Therefore, parallel to the principle of “termination as a last resort” for the termination of an employment contracts where short-time working is introduced in work places with decreased production volumes, facing financial difficulties due to COVID-19, and the measure is found to be insufficient, it is necessary for an enterprise to evaluate its own financial situation, to be able to plan and to know whether short-time working will be beneficial in ensuring the continuity of the enterprise.

Despite the implementation of short-time working in a workplace where continuity can be achieved, the termination of employment contracts due to financial reasons to ensure the continuity of the business may lead to cases with invalid termination claims.

IV. CONCLUSION

Despite the absence of a regulation preventing the termination of the employment contract by the employer in a workplace where short-time working is implemented, the reason and application of short-time working effects whether the employment contracts are going to be suspended or not. It will be appropriate to determine whether termination will be invalid during short-time working by evaluating the cases suggested as the reason for the application of short-time working, the method of application and the reason for the termination.