Insights

Regulatory Updates

• The Turkish Constitutional Court decided in a recent decision dated June 20, 2023 that the claim that the termination of employees’ employment contracts on grounds that the relationship of trust between the employees and the employer had been damaged due to posts and likes on social media accounts, violated the freedom of expression. Accordingly, the application was concluded in favour of the employee.

• Article 4 of the Regulation on Lines of Business titled "Determination of the line of business to which the workplace belongs" was amended with the Amendment Regulation of the Regulation on Lines of Business published in the Official Gazette dated January 23, 2024. Accordingly, the line of business to which a workplace belongs is determined by the Ministry of Labour and Social Security upon the application of the relevant parties, according to the nature of the work carried out in that workplace. Those concerned may file a lawsuit against this determination within fifteen days following the publication of the decision. If the authorization process for a new collective bargaining agreement has started, the determination of the change of the line of business will be valid for the next period.
• The Circular No: 1 (“Circular”), dated January 5, 2024, issued by the General Directorate of Public Financial Management and Transformation under the Ministry of Treasury and Finance, adjusted the maximum amount for severance pay. Effective from January 1, 2024, until June 30, 2024, the Circular stipulated a maximum monthly gross salary of TRY 35,058.58 for the calculation of severance pay. This adjustment, which occurs biannually, covers periods from January to June and from July to December. Employers are advised to adhere to the current ceiling amount specified in the Circular for severance pay calculations until the beginning of July. Furthermore, it is recommended that employers review any severance pay calculations and payments made between January 1, 2024, and January 5, 2024, to ensure compliance with the updated regulations.
• The General Directorate of Insurance Premiums published a circular (“Circular”) on January 8, 2024, delineating the lower and upper limits of earnings subject to various insurance premiums and allowances for 2024. The Circular specified daily and monthly earnings thresholds for insurance premiums, unemployment insurance premiums, and allowances such as lunch, child, and family allowances. Additionally, it set limits for earnings subject to premiums for Turkish employees working abroad and established allowances for funeral and breastfeeding. Administrative fines for non-compliance with legal obligations were also detailed in the Circular.
• Minister of Labour and Social Security Vedat Işıkhan announced that, to ensure equality for public workers, they had signed the Protocol on the Additional Framework Agreement for Public Collective Labour Agreements. The agreement included the application of the rate of 32.57%, which represented the sum of inflation and wage increase.

Miscellaneous Developments

• The investigation into potential violations of Law No. 4054 on Protection of Competition by the Competition Authority regarding gentlemen’s agreements in the labour market was concluded on March 6, 2024. Accordingly, several companies have been found to have violated Article 4 titled “Agreements, Concerted Practices and Decisions Limiting Competition” of the Law No. 4054 on Protection of Competition, resulting in the imposition of administrative fines.

News From Around the World

• The Financial Conduct Authority (“FCA”) of the UK revealed its plans to investigate levels of sexual harassment and bullying complaints within financial institutions, including the use of non-disclosure agreements (NDAs) to conceal grievances. Sarah Pritchard, Executive Director of Supervision, Policy and Competition of the FCA, informed MPs that wholesale banks, insurers, and brokers will be required to provide data on non-financial misconduct complaints, detection methods, and resolutions. The move comes in response to recent high-profile cases of sexual misconduct, and the regulator aims to analyse the data by summer 2024. While the FCA has not specified whether results will be made public, the initiative marks the first industry-wide attempt to assess non-financial misconduct levels.
• The European Commission welcomed the political agreement on the Directive for improving working conditions in platform work, aiming to ensure labour rights and social benefits for those working through digital labour platforms. The directive establishes rules for fair and competitive digital labour platform economies, covering employment status, algorithmic management, enforcement, transparency, and traceability. Key provisions include the ease of determining employment status with a legal presumption of an employment relationship, regulations on algorithmic management for transparency and accountability, and measures to enforce and trace platform work. After approval by the European Parliament and the Council, Member States will have two years to incorporate the directive into national law.
• The European Commission proposed a revision of the European Works Councils (“EWCs”) Directive to enhance social dialogue in the EU, focusing on companies with over 1,000 employees across at least two EU or European Economic Area countries. The aim is to strengthen the role of EWCs by facilitating their creation, promoting meaningful information and consultation, ensuring capacity, and enhancing gender balance. Key changes include granting equal rights to workers to request EWC creation, clarifying transnational matters, ensuring timely and meaningful consultation, specifying resources for EWCs, promoting gender balance, and improving access to legal remedies. The proposal will be discussed by the European Parliament and Member States, with a two-year implementation period once adopted.
• European Commission, the Belgian Presidency of the Council of the EU, and European social partners signed “Tripartite Declaration for a Thriving European Social Dialogue” at the Val Duchesse Social Partners Summit. This Declaration emphasizes a renewed commitment to strengthening social dialogue at the EU level and addressing key challenges in economies and labour markets for thriving businesses, quality jobs, and improved working conditions. The summit outcomes include addressing labour and skills shortages, putting European social dialogue at the core of the common future, establishing a European Social Dialogue Envoy, and launching a Pact for European social dialogue through bipartite and tripartite meetings to reinforce social dialogue further at the EU level. The goal is to conclude the Pact by early 2025.
• The UK government announced that it is taking action against "fire and rehire" practices, where employers dismiss and then re-engage workers on less favourable terms. A new statutory Code of Practice has been published, outlining how employers should behave in such situations and emphasizing fair treatment, meaningful consultations, and exploring alternatives to dismissal and re-engagement. Employment tribunals will have the power to apply an uplift of up to 25% of an employee's compensation if an employer unreasonably fails to comply with the Code. Employers using threats of dismissal to pressure employees into accepting new terms are cautioned against such practices. The Code is set to be effective later in the summer, and is currently pending parliamentary approval.
• The UK government named 524 businesses for failing to pay nearly GBP 16 million in total to their workers, breaching the National Minimum Wage Act 1998. This has affected over 172,000 workers, with employers, including major high street brands, having repaid what they owe to their staff and facing financial penalties of up to 200% of their underpayment.
• It was announced that Dame Carol Black, Chair of the British Library, the Centre for Ageing Better will lead a new UK government task force to enhance employer awareness of the benefits of Occupational Health in the workplace. The task force aims to address the issue of occupational sickness and help boost the economy by producing a voluntary occupational health framework for businesses. The framework will include minimum levels of occupational health required to prevent sickness-related job losses and better support the return to work after illness. Currently, only 45% of workers in Britain have access to some form of occupational health service. The task force is part of the government's broader effort to reduce inactivity levels and waiting list times.
• The U.S. Chamber of Commerce, along with several other co-plaintiffs, joined a lawsuit challenging the Department of Labor's (“DOL”) new rule on independent contractor classification. The lawsuit focused on concerns about the confusion and potential negative impact on businesses caused by the new classification test. The Chamber and its co-plaintiffs argued that the rule threatened the independent contractor model, which offered flexibility and control to workers. The DOL's new rule, which became effective on March 11, had faced opposition from various industry groups and was expected to impact sectors reliant on gig workers, such as app-based services. The DOL defended the rule as a measure to clarify classification standards and prevent abuses, while companies like Uber expressed concerns about the potential loss of independence for workers affected by the rule.
• The Australian government changed how it pays pension contributions for people on parental leave to address gender inequality in labour. Starting July 2025, all workers who get paid parental leave, will also get a pension during that time.
• It was reported that many Americans enjoyed working from home but worried about the downsides on career advancement. Even among those already working remotely, 50% felt it hindered their career progression, and for hybrid workers, the number was 57%.
• According to government advisory committee on migration, the UK's new migrant worker rules that allow healthcare staff lower salaries than private sector workers, may put care workers at a higher risk of exploitation.
• It was reported that UK employers are rushing to submit visa applications for skilled staff before the government's immigration rule changes take effect, leading to increased hiring costs. Some companies are already withdrawing job offers due to the higher salaries required for skilled worker visas. The reforms, part of an effort to reduce inward migration by 300,000 annually, include a significant salary threshold increase and heightened scrutiny on visa fraud. Concerns are rising, especially in lower-paid sectors like hospitality and manufacturing, as the changes may limit the visa system to high-paying London firms, impacting regional businesses and recent graduates. The salary floor for skilled worker visas is set to rise sharply, creating challenges for employers and professionals alike. Critics argue that the policy's impact on net migration is minimal, while potentially harming sectors that rely on global talent.

News From the Private Sector

• net, a prominent job portal in Türkiye, released its Employment Index data for the end of 2023. According to the data, there has been an increase in both new and total job listings in 2023 compared to the previous year. The sectors with the highest number of new job listings were construction, manufacturing, and healthcare, while the sectors receiving the most applications were healthcare, textiles, and manufacturing. In the information technology sector, specific positions such as graphic designer, software specialist, and ERP specialist had a rising trend in job listings. There was a notable 10% increase in the 'data entry' position group within the IT sector.
• SpaceX is accused by the National Labor Relations Board (“NLRB”) of unlawfully firing eight employees who criticized Elon Musk in an open letter. The letter expressed concerns about Musk's behaviour and requested the company address and condemn his controversial tweets. The NLRB claims SpaceX violated employees' rights to advocate for better working conditions by terminating them. The agency seeks a settlement that includes posting notices about the case, a poster about employee rights, and an apology to the fired workers. This follows a previous lawsuit against SpaceX by the Justice Department over alleged hiring discrimination.
• The National Labor Relations Board (“NLRB”) ruled that Google had violated U.S. labour law by refusing to engage in collective bargaining with a union representing contract workers for YouTube Music. Despite Google's argument that it wasn't the employer of workers provided by Cognizant Technology Solutions, the NLRB upheld the legitimacy of the union, affirming the election results. Google's refusal to bargain led to the NLRB's decision, which the company planned to appeal in federal court. The ruling reflected a broader trend of increased labour organizing within Google, with previous protests over business and employment policies. The evolving landscape of joint employer determination, evidenced by a new NLRB rule, might impact labour relations across various industries.
• Kuwait-based Alshaya Group, which owns Starbucks' operating rights in the Middle East, decided to cut jobs in the coffee chain's stores in the region, which have become the target of boycotts due to Israel's ongoing attacks on Gaza.
• It has been announced that around 600 video game testers at Microsoft's Activision Blizzard studios joined a union, doubling the labour’s presence at the software giant, as reported by the Communications Workers of America. This increased the unionized workforce within Microsoft to approximately 1,000. Microsoft's labour-friendly approach, in contrast to most US tech giants, played a role. The company chose not to oppose the organizing efforts and agreed to voluntarily recognize and negotiate with the group upon securing majority support.