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5 Most Important Questions That EYT Brings to Employer's Agenda

5 Most Important Questions That EYT Brings to Employer's Agenda

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In these days when 1.4 million workers in active working life in Turkey are expected to retire immediately by benefiting from the legal regulation regarding retirement age victims (“EYT”), it is important to evaluate the effects of this situation on employers, to determine in advance how employers will manage this process and, if necessary, to publish workplace regulations on this issue for the following reasons:

1- The mass demand for retirement and the fact that retired workers plan to continue their active working life to a large extent due to the abolition of the age requirement distinguish retirement within the scope of EYT from other retirement situations.

2- If a large number of workers terminate their employment contracts in order to receive retirement pensions, employers may face a shortage of experienced personnel.

3- The employee who terminates his/her employment contract due to retirement is entitled to severance pay and, if any, the wages of unused annual leave days. If a large number of workers are entitled to severance pay and annual leave pay at the same time, employers will face a serious financial burden.

4- In order to prevent the loss of experience memory and skills, it is possible that employers may want to employ some workers even after retirement. According to surveys, the majority of workers within the scope of the EYT regulation want to continue working after retirement due to the idea that they will not be able to live solely on their pensions and because they retired at an early age.

This situation has left employers with a number of legal questions, most of which are not answered in the law. It is important that these questions are answered by interpreting the existing legal regulations and that employers prepare for the EYT process in the light of this information:

1- Can the employer terminate the employment contract of an employee who is entitled to retirement within the scope of EYT due to retirement?

The employer does not have the right to terminate the employment contract only because the employee is entitled to retirement or has reached a certain age. Therefore, termination of the employment contract by the employer due to retirement results in the consequences of unfair termination. The right to terminate the employment contract due to retirement belongs to the employee and the employee is entitled to severance pay when the employment contract is terminated due to retirement.

2-Does the employer have to accept the employee's request to terminate the employment contract due to retirement?

An employee who meets the conditions for a pension has the right to terminate his/her employment contract for this reason. This is because retirement is the legal right of the employee who meets the necessary conditions and the employee cannot retire while continuing to work. Termination due to retirement is a unilateral termination made by the employee and is not subject to the employer's approval. However, a worker who meets the retirement requirements is not obliged to retire and cannot be forced to retire by the employer. The decision to retire belongs to the employee.

3-Does the employee who terminates his/her employment contract due to retirement need to notify the employer in advance?

The employee is not obliged to give a notice period in the process of leaving work due to retirement. The employee has the right to terminate his/her employment contract due to retirement without prior notice.

4-Can severance pay and annual leave pay of an employee who terminates his/her employment contract due to retirement be paid in installments or postponed?

Employers will face a significant financial burden since the employees who terminate their employment contracts due to retirement will earn severance pay and annual leave pay, if any. For this reason, employers may want to postpone or to make the payment of labor receivables in installments. Especially if the employee will continue to work in the same workplace after leaving the job due to retirement, postponing the payment of these receivables with an agreement is an issue that may come up frequently in the coming days.

As a rule, severance pay and annual leave pay must be paid immediately after the termination of the employment contract. There is no legislative provision or precedent decision on whether these receivables can be postponed with the agreement of the parties.

However, there are high court decisions stating that severance pay can be paid in installments with the mutual agreement of the employee and the employer. In these decisions, it is considered valid for the parties to install the severance pay in installments with an agreement, except in the event that the employee claims that his/her will has been revoked and proves this claim. In our opinion, if the parties can make an agreement on the date of payment of the severance pay by installments, the postpone of the payment of the severance pay by mutual agreement of the parties should also be considered valid.

However, the conditions for the postponement of severance pay must be carefully agreed upon in the written agreement to be concluded between the employee and the employer. Otherwise, the employer may face additional obligations in a possible lawsuit.

5-Does it constitute a violation of the employer's obligation of equal treatment if some of the employees who retired within the scope of the EYT are re-employed in the same workplace while others are not?

According to the decisions of the Court of Cassation, the principle of equal treatment is valid in all areas of law and the employer is under the obligation to act equally among the employees working in the workplace unless there is a justified and objective reason.

Since the age requirement is abolished within the scope of the EYT regulation, it is expected that the majority of workers who leave their jobs to retire will continue their working life. Employers will also prefer that some workers continue to work in the workplace in order to avoid the loss of experience memory and skills.

At this point, it may be considered that the employment contract of the employee has ended due to retirement, the employer is free to re-hire the employee or not, and if the employee is re-hired, the contract to be concluded is a new employment contract. In our opinion, it should be accepted that the employer has the freedom to decide which employees to re-hire. However, there are decisions of the high courts have ruled that the same employment contract continues if the employee continues to work in the same workplace uninterruptedly after leaving the workplace, and they have reached a conclusion on the claim subject to the lawsuit with this acceptance. For this reason, it is important to determine the objective and subjective criteria, to determine the workers who will continue to be employed after leaving the workplace due to retirement based on these criteria, and to keep the information and documents related to this determination in order to demonstrate, against the possibility of a claim of violation of equality.

By Cigdem Soysal, Senior Associate, and Alperen Kocalan, Associate, KP Law

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