LOCATIONS
Istanbul | Turkey

Turkey: COVID-19 Legal Update

26 March 2020 – Below is a summary of the key changes implemented under the most recent law (“Law No. 7226”) enacted on 25 March 2020 to minimize the effects of the COVID-19 outbreak on the public and the economy.

1. Reduced hours working pay – Conditions for employees to qualify for the reduced working hours employment package from the State (through İşkur) have been eased, especially for those businesses that have suffered significantly due to COVID-19. The employee has to be employed continuously for at least 60 days and a minimum of total 450 working days in the last 3 years prior to the date of application for reduced hours employment pay. Only employers that have not reduced their workforce due to the economic downturn will be eligible to apply for this payment package for their employees (excluding terminations due to performance and moral issues). The State effectively pays for 60% of qualifying employees’ reduced hour wages up to the applicable ceiling rates.

2. Compensation period to make up for lost working hours - Article 64 of the Turkish Labour Law has been amended to increase the lost working days compensation period from 2 months to 4 months, during which employers can enforce make-up hours to recover losses from business interruption. The employer will need to substantiate that the workplace has been fully closed, working hours were drastically reduced or employees have been granted mandatory leave due to the outbreak. The President retains the right to extend this compensation period from 4 months to 8 months if he wishes to do so.

3. Moratorium on Proceedings - In order to avoid loss of rights of litigants due to COVID-19:

  • all periods with respect to claims and litigation proceedings, commencement of execution proceedings, and periods of statutory limitation, foreclosures and mandatory administrative application periods have been suspended as from March 13, 2020 until April 30, 2020,
  • periods defined under the Turkish Execution and Bankruptcy Law and other laws regarding execution proceedings and periods given by the judges and execution and bankruptcy offices, all kinds of execution and bankruptcy proceedings (except for alimony pay in family law), new filings for execution and bankruptcy proceedings and transactions for enforcement of provisional measures are suspended as from March 22, 2020 until April 30, 2020.

All periods that have 15 days or less remaining on the applicable “clock” will resume from the end of the moratorium period and the time left on the “clock” will automatically be extended for another 15 days. The President retains the right to extend this period for another 6 months if the outbreak persists. Any periods applying to protective measures (such as injunctions) are excluded from the scope of this legislative suspension period. Voluntary payments made or requests made from one party in favour of another party will be accepted during this time.

4. Workplace tenancy rents - Lessors will not be able to terminate leases or commence eviction processes in relation to workplace tenancies for failure to pay rent during the period between March 1, 2020 and June 30, 2020.

For more information please contact Edmund Emre Özer, Partner, at .