Turkey: Employment Newsletter

Employment Law Newsletter

As the Employment Law Department of Esin Attorney Partnership, we are pleased to share with you our monthly newsletter.

This newsletter provides a summary of the recent legal developments in relation to employment matters in Türkiye.

The Ministry of Treasury and Finance Updated the Maximum Amount for Statutory Seniority Compensation

Circular Publication Date: 5 January 2024

Summary

The General Directorate of Public Financial Management and Transformation under the Ministry of Treasury and Finance (“Ministry”) updated the maximum amount of monthly gross salary to be taken as a basis for statutory seniority compensation with Circular No. 1 (“Circular”) dated 5 January 2024. The maximum amount for statutory seniority compensation will be valid from 1 January 2024 until 30 June 2024.

Important Details

• The Ministry determined the maximum amount of the monthly gross salary to be taken as a basis for calculating the statutory seniority compensation as TRY 35,058.58 for the first half of 2024 (between 1 January 2024 and 30 June 2024) with the Circular.
• The maximum amount of the monthly gross salary to be taken as a basis for the statutory seniority compensation is redetermined twice a year, for the period starting from January until the end of June of the relevant year and for the period starting from July until the end of December of the same year.

Circular on “Lower and Upper Limits of Earnings Subject to the Premiums and Amounts Based on Certain Transactions” Published by the General Directorate of Insurance Premiums

Circular Publication Date: 8 January 2024

Summary

The General Directorate of Insurance Premiums determined the amounts to be considered for the lower and upper limits of daily and monthly earnings subject to insurance premiums, periods spent abroad and employment service borrowings, administrative fines, temporary incapacity, funeral and breastfeeding allowances to be applied throughout 2024 with the circular dated 8 January 2024 and numbered 2024/2 (‘'Circular'').

Important Details

• The lower and upper limits of daily and monthly earnings subject to insurance premiums and unemployment insurance premiums for the insured individuals who work for an employer in the private sector, by being subject to subparagraph (a) of the first paragraph of Article 4 of the Social Insurance and General Health Insurance Law No. 5510 (“Law”), will be as follows, to be applied throughout 2024:
  • Lower limit of daily earnings: TRY 666.75
  • Lower limit of monthly earnings: TRY 20,002.50
  • Upper limit of daily earnings: TRY 5,000.63
  • Upper limit of monthly earnings: TRY 150,018.90
• The following payments to be paid to the insured individuals subject to subparagraph (a) of the first paragraph of Article 4 of the Law for 2024 will not be included in the earnings subject to a premium:
  • Lunch allowance: TRY 666.75 x 23.65% = TRY 157.69 (Daily)
  • Child allowance: TRY 20,002.50 x 2% = TRY 400.05 (Monthly)
  • Family allowance: TRY 20,002.50 x 10% = TRY 2,000.25 (Monthly)
• Pursuant to the first paragraph of Article 82 of the Law, the upper limit of earnings subject to insurance premiums is 3 times for Turkish employees who are assigned to work in workplaces abroad by employers undertaking work in countries that have not concluded a social security agreement with Türkiye. The lower and upper limits of earnings subject to a premium for these insured individuals will be as follows, to be applied throughout 2024:
  • Lower limit of daily earnings: TRY 666.75
  • Lower limit of monthly earnings: TRY 20,002.50
  • Upper limit of daily earnings: TRY 2,000.25
  • Upper limit of monthly earnings: TRY 60,007.50
• The funeral allowance to be paid to the beneficiaries of the deceased insured as per the third paragraph of Article 37 of the Law will be TRY 3,385 in 2024.
• The breastfeeding allowance to be paid to the insured female employee or the insured male employee after his noninsured wife gives birth in accordance with the third paragraph of Article 16 of the Law will be TRY 857 in 2024.
• Regarding the incapacity allowance to be paid pursuant to the fourth paragraph of Article 18 of the Law, the temporary incapacity allowances of those who were temporarily incapacitated before 1 January 2024 and whose temporary incapacity continued after this date, and those who were incapacitated after this date but whose daily earnings for the calculation of the temporary incapacity allowance were calculated below TRY 666.75, will be calculated based on the minimum daily earnings of TRY 666.75 for the days they are on rest during 2024.
• For those who fail to fulfill their obligations stipulated in the Law, administrative penalties in the form of a fine will be imposed by considering the monthly minimum salary valid on the date of the act contrary to the obligation and determined to be applied to employees over the age of 16. Accordingly, the amount to be taken as the basis for the administrative fine to be imposed for the acts committed in 2024 will be TRY 20,002.50.

Constitutional Court Decision on the Non-Violation of the Right to a Fair Trial

Decision Publication Date: 9 January 2024

Summary

In its decision dated 21 September 2023 and numbered 2018/35591 and published in the Official Gazette dated 9 January 2024 and numbered 32424, the Constitutional Court (‘'Court'') ruled that the dismissal of the reinstatement case to which the applicant (‘'Applicant'') is a party, due to change of jurisprudence of the 22nd Civil Chamber of the Supreme Court of Appeals (‘'Chamber'') on the grounds that obtaining a business decision at the workplace is not subject to the review of expediency, did not constitute a violation of the right to a fair trial and that the application was inadmissible.

Important Details

• The Applicant, who was a security guard and was working as an employee of the subcontractor (“Defendant Company”) at the workplace of the main employer ASKİ, filed a lawsuit at the court of first instance for his reinstatement, claiming that the termination of his employment agreement by the Defendant Company on the grounds that the tender agreement between the Defendant Company and ASKİ had been terminated by ASKİ was not justified.
• The Defendant Company's other employees, as well as the Applicant, filed lawsuits before different courts of first instance. Some of these cases were accepted by the courts of first instance and approved by the Supreme Court of Appeals.
• The court of first instance decided to accept the Applicant's case on the grounds that the Defendant Company failed to prove that the termination was based on a valid reason and that the principle of last resort was considered, stating security work continues to be carried out at ASKİ's workplace. Upon the appeal of the decision by the Defendant Company, the court of appeal rejected the Defendant Company's request.
• In the meantime, upon the appeal review of the precedent files, the Chamber reversed the decision of the court of first instance accepting the reinstatement case filed by another employee whose employment agreement was terminated for the same reason. In the reasoning of its decision, the Chamber stated that the termination of the service (tender) agreement between the defendants was a business decision and that this decision must not be subject to the review of expediency. Therefore, the Chamber changed its jurisprudence by stating that the termination based on this reason can only be subject to the examination of whether it has complied with the principle of last resort.
• In this context, upon the Defendant Company's application to the appeal in the lawsuit initiated by the Applicant, the Chamber reversed the decision of the court of first instance, stating that the termination carried out for business reasons cannot be subjected to a review of expediency and that an investigation should be carried out to ensure that it has complied with the principle of last resort. The court of first instance decided to dismiss the case by complying with the Chamber's decision and the Chamber approved this decision.
• As a result of the examination made by the Court upon the Applicant's application, the Court decided that the application was unacceptable due to lack of clear grounds, stating that the Chamber had changed its jurisprudence by explaining its reasoning, that the Chamber had consistently applied the new approach it had adopted and that it could not be said that there was a persistent difference of jurisprudence.

“Regulation Amending the Regulation on the Business Line” published by the Ministry of Labor and Social Security

Regulation Publication Date: 23 January 2024

Summary

Pursuant to the Regulation Amending the Regulation on the Business Line published by the Ministry of Labor and Social Security (‘'Ministry'') in the Official Gazette dated 23 January 2024 and numbered 32438, Article 4 of the Regulation on the Business Line stipulating that the Ministry determines the business line to which the workplace belongs has been amended and Article 4/A, regarding the determination of the business line, has been abolished.

Important Details

• Pursuant to the amended Article 4 of the Regulation on the Business Line, the methods to be used by the Ministry in determining the business line are left to the discretion of the Ministry and no limits are indicated to be complied with for this determination.
• As a result of the abolition of Article 4/A of the Regulation on the Business Line, the employer, the employer's union and the labor union that filed a lawsuit to object against the Ministry's decision on the determination of the business line are no longer obliged to send the petition to the Ministry within six business days from the date of the lawsuit.
• In addition, the following provisions of the abolished Article 4/A of the Regulation on the Business Line are now included in Article 4. In this context, the following applies:
• The business line to which a workplace belongs will be determined by the Ministry upon the application of those concerned, according to the nature of the work carried out in that workplace. The Ministry's decision on the determination will be published in the Official Gazette. Those concerned may file a lawsuit against this determination within 15 days starting from the publication of the decision in accordance with Article 5 of the Law on Unions and Collective Bargaining Agreements.
• If the mandate process for a new collective bargaining agreement has already started, the change in the business line will be valid for the next period. The request for determining the business line and the related lawsuits will not be considered as a preliminary issue for the mandate process and mandate lawsuit.
• Until a new business line is determined, the business line of the workplaces determined in accordance with the abolished Regulation on the Business Line will be deemed the same as the business line of the union that was last granted the mandate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.