Client Alert:

PRIVATE EMPLOYMENT AGENCIES ARE NOW AUTHORIZED TO PROVIDE TEMPORARY WORKERS

PRIVATE EMPLOYMENT AGENCIES ARE NOW AUTHORIZED TO PROVIDE TEMPORARY WORKERS

The Labour Code numbered 4857 has been amended with the “Law Amending the Labour Law and Turkish Labour Agency Law” (“Amending Law”) numbered 6715 adopted on 06.05.2016. Despite the opposition of labour unions, the Amending Law has been ratified by the Turkish Grand National Assembly and published in the Official Gazette on 20.05.2016, which opened a new era for outsourcing personnel by bringing in the legitimacy required by the employment agencies to carry out the loaning out activities within their permitted scope of business. This Client Alert only relates to innovations brought in terms of outsourcing personnel through Private Employment Agencies (“PEA”).

Until the Amending Law came into force, temporary employment relationships could be established only within a holding or group of companies and the PEAs were specifically prohibited from engaging in employee loan-out activities in a professional manner.

With the new Amending Law, the PEAs now have the authority to provide temporary workers to their clients. Article 7 of the Labour Code provides that a temporary employment relationship may be concluded via authorized PEAs by temporary transfer of PEA’s worker on the basis of a temporary worker supply agreement to be executed between the PEA and its client. In this structure, the PEA remains the employer of the transferred worker. Within this framework, two different agreements are to be concluded, one of which is executed between the PEA and its client (the temporary worker supply agreement), whereas the other is amongst the PEA and the temporary worker (the employment contract). The Amending Law also determines the framework of the temporary worker supply agreement by making reference to the provisions to be set forth therein and provides certain restrictions in this respect to protect the rights of the temporary worker.

Having said the above, the freedom granted to the PEAs in terms of loaning out is not unlimited. In a nutshell, the Amending Law limits those circumstances and duration under which a personnel can be outsourced from a PEA duly licensed by the Turkish Labour Agency as follows:

  • Replacement of workers on maternity or parental leave, during the absence of a worker, who performs military services and in other circumstances where the employment contract is suspended; (temporary employment shall continue until the end of the leave)
  • Seasonal agricultural works (No limit as to duration)
  • Domestic works (No limit as to duration)
  • Those works performed with intervals, which do not fall within the scope of daily operations of the business (for maximum 4 months)
  • Emergency works related to the occupational health and safety or in case of extreme circumstances affecting the production to a considerable extent (for maximum 4 months)
  • In case of an unforeseen increase in the average production capacity for the company’s goods and services, necessitating establishment of a temporary employment relationship (for maximum 4 months)
  • In case of an increase in the periodical workload (except for the seasonal works) (for maximum 4 months)

The temporary employment supply agreement can be further renewed twice at most, provided that the total duration of such employment does not exceed 8 months in total (except for those circumstances relating to the periodical workload increases in non-seasonal works). At the end of this maximum duration, the employer who employed temporary worker, will not be able to employ temporary worker(s) for the same job for a period of 6 months following the end of the temporary employment relationship.

If the temporary employment relationship continues after the term of the agreement, it will be transformed into an employment agreement for an indefinite period. In such a case, the PEA will be responsible only for the salary arising from the temporary employment relationship, duty of care and social security premiums for the period limited to the term of the temporary employment relationship.

The Amending law also refers to those circumstances in which the temporary employment relationship cannot be concluded:

  • During the 8 months following a collective redundancy/dismissal procedure in a workplace
  • In public institutions & organizations and in underground mines
  • During strikes and lockouts
  • In case the temporary workers will be employed due to an unforeseen increase in the average production capacity on the goods and services, the number of the temporary workers cannot exceed ¼ of the work force employed in the workplace (unless the number of the personnel in the workplace is 10 or less, in which case maximum 5 temporary workers can be employed).
  • The temporary employer cannot hire its worker, whose agreement is terminated, as a temporary worker for a term of six months following the termination date.

Additionally, the Amending Law provides notable rights and obligations for the temporary employers, which include but shall not be limited to the following:

  • The right to give instructions to the temporary worker in accordance with the requirements of the job and temporary worker supply agreement
  • The obligation to inform the temporary worker regarding the job vacancies in the workplace, and to maintain the documents requested by the Turkish Labour Agency for the requisite period
  • The obligation to duly inform the PEA and the relevant authorities about the workplace accidents and occupational illness of the temporary worker.
  • The obligation to avail the temporary workers of the social services available in the workplace during the term of the temporary employment, as per the principle of equal treatment.
  • To notify the work place union representative (if any) about the employment status of the temporary workers in the workplace
  • The obligation to give certain trainings set forth under Social Security and General Health Law

As could be seen from the explanations above, the Amending Law basically requires that the temporary workers are not treated differently from other employees in the workplace and their social rights are protected. This can also be construed from the amended Article 7, according to which the basic working conditions of the temporary workers should not be worse than those that would have applied if the temporary worker was directly employed by the same employer for the same job.

Apart from the above, the Amending Law provides further obligations if the temporary workers will be employed due to unforeseen increase in average production capacity for goods and services. In such case, the temporary employer should check- on a monthly basis -whether the salaries of the temporary worker(s) are duly paid by the PEA whereas the PEA will be responsible to present the relevant documentation in this respect. The temporary employer shall not pay the PEA’s fee if temporary worker’s salary is not paid by the PEA. In this case, the temporary employer shall deduct the temporary worker’s unpaid salary (up to 3 months) from the payment to be made to the PEA and shall directly deposit it to the temporary worker’s bank account. The Amending Law further requires the temporary employer to notify the relevant authorities about those temporary workers whose salaries are not paid, as well as the outstanding amounts.

Finally, Article 99 of the Labour Law foresees administrative fines for those employers and their representatives, who act in breach of the provisions regulating temporary employment relationship.

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