Mass layoff refers to situations in which an employer, facing financial difficulties or other factors, must terminate the employment of a large number of workers to reduce labor costs. Because mass layoffs are regulated by law, both employers and employees should be informed about the rules and procedures that apply.
What Is a Mass Layoff?
The definition of mass layoff describes the termination of employment contracts for a group of employees at once. The rules are detailed in Labor Law No. 4857. Under this law, large-scale terminations may be permitted for economic, technological, or structural reasons. However, the law sets specific conditions that must be met for a dismissal to qualify as a mass layoff. According to those provisions:
- If the workplace employs between 20 and 100 workers, at least 10 must be dismissed within the relevant period,
- If the workplace employs between 101 and 300 workers, at least 10% of the workforce must be dismissed,
- If the workplace employs 301 or more workers, at least 30 workers must have their employment terminated within the applicable period, whether on the same date or different dates.
It is important to note the one-month period: all dismissals that constitute the mass layoff must occur within one month. This one-month period begins from the date the first dismissal takes effect. If the dismissals extend beyond that month, they will not qualify as a single mass layoff. For the mass layoff rules to apply, a workplace must have at least 20 employees. Employers are required to notify union representatives, the Ministry of Labor and Social Security, and İŞKUR in writing at least 30 days before the planned dismissals. The notification must clearly explain the reasons for the planned terminations and state the number of employees and dismissals involved.
Employer Obligations in a Mass Layoff
There are specific employer responsibilities when planning a mass layoff. The employer must verify that the planned dismissals meet the legal criteria for a mass layoff. If they do, the employer must provide written notification to the relevant institutions at least 30 days before the dismissals; shorter notices will invalidate the mass layoff designation. After notifying the authorities, the employer must meet with union representatives to discuss measures that address the hardships of affected workers. Only after 30 days have passed from the notification may the employer proceed with the dismissals. If, within six months after the mass layoff, the employer seeks to fill positions of the same type, they must give priority to rehiring employees who were previously dismissed.
Key Points About Mass Layoffs
One important point to understand about mass layoffs is that dismissals without severance or notice do not qualify as lawful mass layoffs. Employers should be aware that they are generally obliged to pay severance and notice compensation in accordance with labor law when a mass layoff applies. Employers who dismiss employees in violation of legal provisions may face administrative fines for each affected worker.
Legitimate reasons must exist for a mass layoff; arbitrary dismissals are not permitted. Acceptable reasons typically include economic downturns, reduced revenues, or organizational downsizing. The content and timing of the required notification are crucial. After the employer provides the required notice, the employer and union representatives should hold a formal meeting and prepare documentation confirming that the meeting took place. The termination process becomes final 30 days after the regional directorate receives the mass layoff notification.