What is Collective Redundancy? 10 November 2015
I. What is Collective Redundancy?
Article 29 of the Turkish Labour Law numbered 4857 ("TLL") sets forth the legal provisions regarding collective redundancy. Hereunder,
a) at least 10 workers in establishments normally employing more than 20 and less than 101 workers,
b) at least 10 % of the number of workers in establishments normally employing at least 101 but less than 301 workers,
c) at least 30 in establishments normally employing 301 workers or more, either on the same or different dates, over a period of 30 days, in accordance with the notice periods set out in Article 17 of the TLL, are considered collective redundancy.
Accordingly, collective redundancy is only possible in establishments normally employing at least 20 workers and at least 10 workers shall be dismissed over a period of one month. The numbers of dismissed workers depend on employed workers in the establishment.
The difference between procedures, right and obligations of employers and workers of collective redundancy and other cancellation of employment contracts are the matter of the article hereby.
II. Does The Employer Have The Obligation Of Notification In Collective Redundancy?
Pursuant to Article 29 in TLL, the employer should notify the situation in writing to the representative of the labour union, relevant District Directorate of Ministry of Labor and Social Securities(District Directorate) and Employment Institution of Turkey at least 30 days in advance.
In the abovementioned notifications, it is obligatory to have presented the documents regarding
(i) the valid( economic) reason/s of collective redundancy,
(ii) the number of redundant workers and
(iii) the time period in which collective redundancy shall take place.
Aforementioned notifications shall be in writing form and against signature to the institution. If the employee does not sign the notification, the institution detects the situation under a record.
Following the notifications, consultations should be carried out between the employer and the labour union representative in order to discuss the options for preventing collective redundancy, reducing the number of workers to be dismissed or minimizing the adverse effects of collective redundancy on workers. At the end of the consultations, a document shall be drawn up in order to show that consultations have been carried out.
Notice of termination to workers shall be effective 30 days after the employer notifies the collective redundancy to the regional directorate. In the case that employer notifies collective redundancy to district directorate in 30 days or before the date of cancellation of employment contract, the contracts are cancelled as of the dates specified and the termination dates of contracts are determined with including period of notice. In the condition of making payment to the workers in lieu of notice periods for immediate termination of employment contracts, without waiting period of notice, the contracts are deemed to be terminated at the end of 30 days starting from the notifications.
If a workplace is closed and business activities are definitely and permanently terminated, the employer is required to notify the situation only to the relevant district directorate and the Employment Institution of Turkey and to make declaration in the work place at least 30 days ago.
III. What are the legal Consequences/Sanctions if the employer violates obligation of notification in collective redundancy?
Although there is a comment that “ incompliance of the procedure stated under Article 29 of TLL causes invalidity of cancellation”[1] in doctrine, violation of the procedure in the aforementioned article or obligation of notification to institutions are not determined as invalidity of the termination in the decisions of Supreme Court[2]. The sanction of the violation of the obligation under the article mentioned above is determined as administrative fine under Article 100 of TLL. In a nutshell, violation of the rules under collective redundancy does not cause the invalidity of the cancellation of employment contract.
According to Article 100 of the TLL employers or employers’ representatives are subject to an administrative fine of TRY 450.- (four hundred and fifty Turkish Liras) for each worker whose employment agreement is terminated in contradiction with the termination procedure laid down in the Article 29 of TLL for collective redundancies.
In addition to the fact that the administrative fine is the only consequence of incompliance of the procedure, the employer is not subject to make the payment of 30 days period to the worker in the case of violation of the obligation of notification[3].
In the case of violation of the obligation of notification above mentioned, there is no other compensation except administrative penalty which has to be given to workers.
IV. How do workers’ employment contracts be cancelled in collective redundancy by the employer? Is there any compensation that has to be paid to workers in collective redundancy?
Cancellation of the contract of dismissed workers shall be done pursuant to TLL Article 17 and the rest. In other words, the employer ,who cancelled the employment contract of indefinite duration of the worker with at least 6 months length of service in the establishment normally employing at least 30 workers, has to depend on a valid reason related to worker’s sufficiency and actions or requisites of the establishment, work place or work.
Pursuant to Article 17 of TLL, the decision of the cancellation of the contract has to be notified to the worker. Specific to our article, this notification has to be realized by the employer with respiting the period (Period of Notification) in Article 17 of TLL or making the payment in lieu of notice for cancelling the employment contract. In addition, severance pay, determined according to the working period and salary, has to be paid to every worker with over one year length of service according to date of recruitment and whose contracts are cancelled because of establishment-related economic reasons by the employer, by law.
There is no compensation other than the aforementioned administrative fine for the violation of the procedure of the collective redundancy in addition to the payment in lieu of notice and severance pay.
The employer has to make the notification of the cancellation in writing form and has to clearly and precisely mention the reason of cancellation. The notification of cancellation has to contain precise objective criteria of that
- redundancy is caused by economic reasons and these reasons make the cancellation obligatory,
- If the establishment is closed, redundancy is caused by this reason and the date of closing
- the determination of order of precedence of workers in the redundancy and related documents has to be enclosed to the annex of the notification of cancellation.
Hence, in the case of cancellation due to economic reasons or the reason of establishment closing, court appointed expert shall investigate whether the economic reason is temporary, the economic reason makes redundancy essential and which objective criteria used for determining in the dismissal of workers and the court passes verdict according to expert report in the possible reemployment lawsuit separately brought by each worker.
[1] SÜZEK Sarper, İş Hukuku, 2012 İstanbul
[2] the decision of the 9th Civil Chamber of Supreme Court numbered E.2006/29843 K.2007/1029 and dated 29.01.2007, the decision of 22nd Civil Chamber of Supreme Court numbered E.2014/5846 K.2014/7262 and dated 8.4.2014
[3] the decision of the 9th Civil Chamber of Supreme Court numbered E.2004/1301 K.2004/1155 and dated 26.01.2004
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