The current Labor Law lacks detailed provisions about the rights of employees placed under short-time work, leaving many workers vulnerable. In particular, the issue of severance pay during periods of short-time work has become a serious concern.
Growing Anxiety as Short-Time Work Continues
As the short-time work allowance and unpaid leave schemes continue—and with the possibility of further extensions—affected employees are increasingly worried. The existing Labor Law does not clearly define many aspects of short-time work. During the coronavirus pandemic, short-time work benefits were introduced at the end of March to support both employees and employers. From April, employers were also permitted to place employees on unpaid leave. These measures aimed to prevent employers from suffering severe financial hardship and to reduce layoffs. Employees placed on unpaid leave received a monthly support payment of 1,177 TL. Subsequent government decisions extended the durations of cash wage support, including the short-time work allowance and unpaid leave measures.
Under the latest arrangements, the short-time work allowance is valid through October 31, while the cash wage support for unpaid leave runs through November 17. These periods are widely expected to be extended at least until the end of the year. According to recent figures, 3,579,000 people are receiving the short-time work allowance and 1,998,000 are benefiting from unpaid leave support. A large majority of these workers have been under short-time work since March.
Significant Loss of Rights
Although short-time work and unpaid leave were intended to preserve jobs and protect rights, the prolonged application of these measures has caused substantial losses for many employees. As the duration of short-time work increases, workers lose access to numerous rights, and the Labor Law still lacks specific regulations addressing these losses. Severance pay is a major unresolved issue for those under short-time work or unpaid leave.
Some employers stopped operations entirely during the pandemic, and their employees received the short-time work allowance; others reduced working hours and their staff received allowances accordingly. The Labor Law does not clearly state whether periods covered by the short-time work allowance count toward employees’ seniority for severance pay calculations. There are no definitive court rulings on the matter yet. One decision by the Court of Cassation from nine years ago held that short-time work periods should be included in severance pay calculations, but that ruling concerned much shorter interruptions than those currently being experienced.
The Issue Is Likely to Reach the Courts
As short-time work periods lengthen, it is almost certain that labor courts and the Court of Cassation will be called upon to resolve many disputes. Millions of employees have been affected, and the extent of rights loss has become clearer over time. Social security contributions are not being recorded for periods when employees do not work, and gaps are appearing in severance pay entitlements. Severance pay is calculated as 30 days of gross pay for each year of service; unpaid periods that do not count toward service therefore result in lower severance payments, creating significant hardship for affected workers.
Employees on unpaid leave face even greater problems. Because their employment contracts are effectively suspended, they already experience a loss of severance pay rights and have their social security contributions frozen during the unpaid leave period.