Legal News

TERMINATION IN PROBATION PERIOD

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Both employee and employer may terminate the contract in probation (trial) period without giving any notice, and no severance is paid to employee.

Probation period is arranged in article 15 of Labor Law 4857. The main points related to trial period are as follows.

  • A probation period may be inserted in employment contracts
  • This period cannot exceed two months
  • Probation period may be extended up to 4 months by collective agreement

TERMINATION DURING PROBATION PERIOD

  • During the probation period employment contract can be terminated without any notice term
  • In such cases employer doesn’t have to pay severance
  • Employee’s wage and other rights related to worked days should be paid.

NON-APPLICABLE CASES

  • In case there is no probation clause in the employment contract employer cannot terminate the contract without notice and severance,
  • Probation clause cannot be inserted after the employment contract is signed,
  • In case the contract is terminated after probation period has expired, employer has to observe the notice term. The contract will be subject to provisions applied to permanent employment contract.

RELATED ARTICLE

ARTICLE 15. - If the parties have agreed to include a trial clause in the employment contract, the duration of the trial term shall not exceed two months. However, the trial period may be extended up to four months by collective agreement.

Within the trial term the parties are free to terminate the employment contract without having to observe the notice term and without having to pay compensation. The employee’s entitlement to wages and other rights for the days worked is reserved.

TURKEY SWITCHES TO PERMANENT SUMMER TIME

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Turkey will no longer change its clocks in winters, and summer time (DTS) will be the country’s non-changing standard time fixed on GMT +3.

When most of the European countries, as well as some other countries of the world set their clocks 1 hour back on Sunday, 28 October 2018, Turkey will remain in Summer time-DTS, and an extra 1 hour time difference will occur with these countries.

Summer time, which has been used during the last two year was a controversial issue, especially parents of students are not happy about their children going to school in complete darkness in the mornings.

Now the Presidential decree no. 193, issued in Official Gazette numbered 30553, dated 2nd October 2018 put an end to these arguments, and stipulated that summer time (day light saving time) will continue all through the oncoming years.

Turkey, who is in the Eastern European Time zone (EET) were normally synchronized with European countries as regard to DST change, however last year the government decided that the hours will be the same in winter and summer in order to make more use of daylight during the winters.

As a result of this decision, clocks in Turkey will not be set back one hour to pass into winter time anymore and will stay on GMT/UTC + 3 all-round the years while many of the countries in the World and Europe will set back their clocks one hour back in winter (This year in 28 October, 2018).

TIME ZONE OF TURKEY

Turkey's time is Eastern European Time (EET).

Standard (and stable) Time zone will be UTC/GMT +3 hours. There will be no winter time adjustment.

RESULT OF TIME DIFFERENCE

In European and other countries in which DST is ended on October 28, it is important for individuals and companies, who are in communication with Turkey, to take this extra an hour time-lag into consideration starting from 28 October. Such as;

Private sector offices you are in communication with will be open and closed an hour earlier than they would be in normal times in comparison with your country's time.

For example, after 29 October 2017, if you are in Central Europe Time CET, such as in Spain and Germany, there will be 2 hours gap with Turkey (2 hours behind of Turkey) instead of 1 hour; or if you are in the same time zone (East European Time/EET), such as in Greece, Israel, there will be 1 hour gap (1 hour behind of Turkey) instead of being at the same time, and there will be 3 hours gap with England.

ADJUSTMENT OF COMPUTERS AND OTHER SYSTEMS

The computers, cell phones and some other electronic devices and systems will be updated (be set back an hour) automatically on Sunday 28 Oct. 2018. Best way to tune with the unchanged Turkey’s time is to setting these devices at GMT +3 (one hour forward).

FLIGHT HOURS

Departure and arrival times of foreign flights will also be affected. Passenger should check their flight times in websites of the related airlines long before they go to airport.

MINIMUM LIVING ALLOWANCE SUPPORT STARTS

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Minimum Living Allowance (MLA/AGİ) support intended to compensate any decrease in monthly minimum wage due to shift on taxable income brackets started in September and will continue to the end of the year.

As is known, tax rates are applied by taken the cumulative income as a base. So the minimum wage shifts to second tax bracket about on September (from 15% to 20%) and get lower than monthly net 1.603,12 TRY.

Minimum living allowance support became permanent by Law No. 703.

As per the General Communique (Serial No. 303) issue in the Official Gazette numbered 30448, dated 11 June 2018, minimum wage will not be affected from the shift on taxable income brackets and will not get lower than the net amount received on January.

DIFFERENCE IN APPLICATION

In last year application only the minimum wage for single was taken as base (net 1.603,12 TRY) , but according to above mentioned Communique the base will be the net amount minimum wage earners get in January.

An employee may have additional payments such as meal allowance, transportation pay, bonus etc. and their January payments can be over 1.603,12 TRY (Base salary + Additional pays). In the new application employees base salary will not get lower than 1.603,12 TRY.

For detailed application please visit our website:

http://turkishlaborlaw.com/news/legal-news/613-2018-minimum-living-allowance-support-for-minimum-wage

http://turkishlaborlaw.com/news/business-in-turkey/556-minimum-living-allowance-support-for-minimum-wage

THREE YEARS COMPULSARY STAYING PERIOD IN PRIVATE PENSION

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Participant employees of auto enrolment private pension may have to stay 3 years in the system, according to recent news in the media.

Private Pension System is intended to improve the welfare of employees and to increase the domestic savings, however statistics show that about 60% of the participants used their right of withdrawal from the scheme within two months.

In order to prevent the prevent high rate of withdrawals, Ministry of Treasury and Finance is planning to extend the withdrawal period up to three years.

If this happens employees cannot withdraw from the system before 3 years.

CURRENT APPLICATION

In current application employees may get out of the system within 2 months; and their contribution will be refunded.

  • After the auto enrolment, employees are notified by post or e mail.
  • Employee may withdraw from the system within two months as of the date they informed about being included in pension plan by notifying the employer or insurance company through post or e mail. Employee may withdraw even after two months.
  • Employee’s contributions are refunded together with any investment gains within ten workdays after the claim of withdrawal is received.

RALATED LEGISLATION

Private Pension System has been introduced by Law No. 6740 and entered into force as of 1st January 2017. Until then workplaces gradually started to enter into contracts with pension companies and offer pension plans to the employees in the scope of Law on different dates, depended on their number of employees.

Turkish citizen employees who are under the 45 years of age and working against wage under a service contract will be automatically enrolled in a pension plan arranged by employers.

Withholding Tax and Monthly Premium Service Document Application May Be Postponed Again

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Withholding Tax and Monthly Premium Service Document that are announced to start on 1st of October 2018 may be postponed to a later date, according to information obtained from experts.

As is known, it is stipulated by the Law No. 6728 that “withholding tax returns and SSI e-declarations to be combined in a single form under the name of Withholding Tax and Monthly Premium Service Document and submitted only to the tax offices until the 23rd of the following month.

The first start date was January 2018, and it was postponed to 1st of July 2018, and then the last application date is determined as 1st of October 2018.

Application of Withholding Tax and Monthly Premium Service Document had already starter in Kırşehir province as of 1st June 2017, and Amasya, Bartın ve Çankırı provinces will join the application as of 1st January 2018. Due to technical problems faced in these provinces it is expected that the mentioned application will be put off to later time.

Will Employment Contracts be Converted into Turkish Lira?

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In an effort to prevent the recent loses and high volatility in Turkish Lira (TRY), new steps has been taken by issuing Presidential Decrees (No 32 and 85) that stipulate some transactions and contracts made between real persons or the legal entities will be based on Turkish Lira.

Current contracts agreed on foreign currency will be converted into Turkish Liras within 30 days (as of 18 September 2018).

According to Decree No. 85 issued in the Official Gazette numbered 39534, dated 13 September 2018, the following transactions and contracts cannot be made in and indexed to foreign currencies;

  • purchasing, selling and renting moveable and immovable properties
  • vehicle leasing
  • employment and service contracts.

EMPLOYMENT AND SERVICE CONTRACTS

Obligation of concluding employment and service contracts is a particular concern from the point of employment relation. Because many foreign employees working in Turkey by work permits are usually paid in USD and EURO.

Real persons who have legal domicile and stay for more than 6 months continuously within one calendar year at Turkey are considered as settled in Turkey. Temporary leaves don't break duration of stay.

In case these employees can be deemed as settled in Turkey, this obligation of paying in Turkish Lira may cause a real problem, because monthly salary in the employment contract determined during the work permit process cannot be changed, and foreign employee’s salary will change continuously in comparison for foreign currency (mostly going lower).

New secondary legislation is expected to solve this issue, and we will inform you about the developments.

SPORTSMEN

Contract concluded with sportsmen, mainly with the football players, are thought to be made in foreign currency. Because these sportsmen are subject to rules of UEFA,FIFA and CAS (Court of Arbitration for Sport).

EXEMPTIONS

Transactions and contracts made with foreign based real persons or legal entities can be based on foreign currencies.

Also, foreign currency earning bodies can be exempted under certain conditions.

Minimum Wage Support Ends

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Government support for minimum wage, which is being applied since 2016, will end after September 2018.

As is known minim wage support started in January 2016 by the government to reduce the burden of employers due to 30% wage hikes at the time. The support continued throughout 2017, and between January 2018 and September.

As per the Omniums bill (colloquially known bag law) No. 7103, issued in Official Gazette No. 30373, dated 27th March 2018, and the Cabinet Decree, 2018/11668, issued in the Official Gazette on 20th June 2018; minimum wage support is applied between January and September 2018. However, no support will be provided for minimum wage after September 2018.

For detailed information please visit our website;

http://turkishlaborlaw.com/news/business-in-turkey/371-10-questions-and-answers-on-2016-minimum-wage-support-in-turkey

http://turkishlaborlaw.com/news/legal-news/446-minimum-wage-support-is-to-continue-in-2017

http://turkishlaborlaw.com/news/legal-news/612-2018-minimum-wage-support

Collective Redundancy in Turkish Law

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Collective redundancy, also called collective dismissal or lay-off is the termination of large amount of employees’ contracts due to economic, technological or structural reasons.

NUMBER OF EMPLOYEES DISMISSED

Dismissal of 10 to 30 employees within a month is considered as collective redundancy.

Collective redundancy is arranged in Article 29 of Labor Law 4857, and numbers are as follows:

  • Dismissing minimum 10 employee in the establishments with 20 to 100 employees,
  • Dismissing minimum 10% of employees in the establishments with 101 to 300 employees,
  • Dismissing minimum 30 employees in the establishments with over 301and over employees,
  • Dismissal should occur at a same or different dates within a month.
  • In determining the number of employees, only the employees working in the workplace the collective dismissal is taken place, i.e. the employees who are working in the other workplace of the same employer aren’t taken into consideration.

OBLIGATION OF NOTI FICATION

Employer should inform the relevant Regional Directorate of Labor and the Public Employment Office and the union shop-stewards, if any, with written notification at least 30 days prior to planned dismissal.

Notification should include the reason for the collective dismissal, the number of employees that will be affected, and the length of time the procedure of terminations is likely to take.

In case of closing down the entire establishment only the public administrations (Regional Directorate of Labor and the Public Employment Office) should be informed.

RIGHT OF EMPLOYEES

In case of collective redundancy all the gained rights of employees must be paid, such as:

  • Notice pay,
  • Severance pay,
  • Unused leaves.

ADMINISTRATIVE FINE IN CASE OF UNLAWFULL REDUNDANCY

In case of violating the provision of above said article, 29, 693,00 TRY administrative fine will be imposed to employer.

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