The Law Amending the Social Security and General Health Insurance Law No. 375 and Decree-Law No. 32121 (“Law”), which is eagerly awaited by the public and directly concerns approximately 2.5 million Turkish citizens, was published in the Official Gazette No. 32121 dated 03/03/2023 and came into force.
With the amendment, employees started working before 08/09/1999 and have completed the insurance period and premium payment days specified in the Law will be entitled to the pension.
A. Overview of The Amendment In Terms of Employees
Under the Turkish Social Security Legislation, the conditions required for employees to be eligible for retirement pension are (i) having paid a certain amount of premiums, (ii) reaching a certain age, and (iii) leaving the job due to retirement.
The amendment introduced under the Law has removed the barrier for employees not meeting the age limit criterion to receive the pension.
B. Overview of The Amendment In Terms of Employees
The employees entitled to the pension will terminate their labor contracts in a way that entitles them to statutory seniority compensation, which will result in the obligation of employers to pay severance pay to many employees in a short period of time.
The government has stated that a fund will be provided to ease the statutory seniority compensation burden on employers during the drafting period of the Law, but no regulation has been made yet in this regard; it is expected that regulation on this issue will be published in the coming days.
One of the most crucial questions for employers is whether an employee who resigned due to retirement could be re-employed, and if so, whether they should be employed under the same conditions, and whether it is mandatory to employ all the employees in the same situation.
There is no such provision in Turkish legislation that prevents a retired person from working again. The employer can re-employ any employee they wish.
Indeed, the Law also stipulates that if a retiree is re-employed within 30 days, five percentage points of the employer's social security support premium will be paid by the Treasury.
With the amendment introduced by the Law, the age limit for retirement has been eliminated for employees who started working before 08/09/1999. These employees are expected to terminate their labor contracts and retire in the coming days in a way that entitles them to statutory seniority compensation. If the employer and retiree agree, the retiree could be re-employed even after retirement.
By Sertaç Kökenek, Senior Partner, Özgür Güner, Partner and Bekir Yağız Kızkapan, Associate, Moral, Kinikoglu, Pamukkale, Kokenek