Edition 24: 17 June 2016
Editorial Team:
Dr. E. Seyfi Moroğlu, LL.M., Işık Özdoğan, LL.M. and Bora İkiler, LL.M.
Turkey Introduces New Legislative Regimes for Temporary Employment Arrangements and Remote Working

Turkey has introduced new legislation governing temporary employment arrangements. Companies must now employ temporary staff via private employment agencies (“Employment Agencies”). Restrictions are also introduced for when temporary employees can be engaged, detailed maximum lengths for these arrangements, and party responsibilities. A legislative regime is also introduced for remote working, establishing minimum standards for contracts and working conditions.

The Law no. 6715 on Amending the Labor Law and Turkish Employment Agency Law (“Amendment Law”) was published in Official Gazette number 29717 on 20 May 2016.

Employers continue to be able to temporarily transfer employees to another workplace within the related holding company, or within the same group of companies.

Temporary staff

Employers may only engage temporary staff in specific situations (Article 7 of the Amendment Law). These include situations where employment agreements are suspended, seasonal agricultural workers, domestic workers, urgent work relating to occupational health and safety, as well as interval workload increases.

Temporary staff cannot be employed:

– Within six months of employing temporary staff for the same work.

– By public institutions, organizations and workplaces which conduct underground mining activities.

– Within eight months at workplaces where collective redundancy has occurred.

– During strikes and lockouts (without prejudice to Article 65 of Law on Trade Unions and Collective Labour Agreements No. 6356).

In temporary employment relationships established through Employment Agencies, the Employment Agency is deemed to be the employer, rather than the company seeking temporary employees (“Procuring Company”). Therefore, the Employment Agency is liable for payment of remunerations to the employees. The Procuring Company is also responsible for:

– Ensuring on a monthly basis whether the Employment Agency fulfils its payment obligations to temporary employees who have been engaged for more than a month.

– Deducting any outstanding payments from money owed to the Employment Agency and directly transferring such payments to the temporary employees’ bank accounts. Such deductions can equate to maximum three month’ salary for the temporary employee.

– Giving notice to provincial labor directorates and Employment Agency about employees and amounts which remain unpaid. 

Remote working

The Amendment Law introduces a definition for remote working (or teleworking) as work performed by an employee outside of the workplace, whether at home or through use of technological communication tools.

Employment agreements for teleworking must include:

– Job description and conduction method.

– Term and place of work.

– Remuneration and payment method.

– Protective equipment provided by the employer, and their maintenance.

– Communication means between the employee and the employer.

– General and specific working conditions.

The Amendment Law requires telework employees to be treated the same as other employees, unless an essential ground requires otherwise. Occupational health and safety measures are also included for the telework employees.

Further regulations will be published to address procedures and principles for teleworking, as well as types of work which cannot be subject to a teleworking arrangement.

Please see this link for the full text of the Amendment Regulation (only available in Turkish).

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Turkish Competition Board Fines Major Online Platform Yemeksepeti, Recognizing Price Parity Clauses as a Violation for First Time

The Turkish Competition Board (“Board“)has recognized for the first time that a price parity clause could violate competition laws. The Board recently issued an administrative monetary fine to Yemeksepeti, a major online platform for food orders, for violating Article 6 of the Law on Protection of Competition No. 4054. The Board held that the exclusionary effects of Yemeksepeti’s Most Favoured Customer Clauses meant the platform abused its dominant market position. These clauses discourage restaurants from offering lower prices in any other online food ordering medium.

The Yemeksepeti decision is a milestone in Turkish competition law since it is the first time the Board has recognized the exclusionary effects of Most Favoured Customer Clauses. Such clauses are effectively price protection mechanisms within supply contracts. Their overall effect is that the seller cannot offer a lower price to other customers, without also offering the same lower price to the contracting customer.

Yemeksepeti is an online platform, enabling customers to make takeaway food orders from restaurants. The Board concluded that Yemeksepeti has a dominant position in this market.

The Board’s full reasoned decision has not yet been published. The Board’s decision is based on Article 6 of the Law (abuse of dominance). Generally, issues around Most Favoured Customer Clauses would arise from their inclusion in an agreement. Arguably, this would mean that Article 4 of the Law would also be relevant (competition restricting agreements). The Board’s full reasoning will become clear on publication of the long-form decision.

In the decision, the Board issued an administrative monetary fine of 427,977 TL, as well as ordered Yemeksepeti to revise its agreements with restaurants and terminate implementation of any Most Favoured Customer Clauses.

The Board is also currently investigating Booking.com regarding similar issues, but has not yet reached a decision (more).

The full text of the Board’s short-form decision is available at this link (only available in Turkish).

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Turkey Introduces Mechanisms for Calculating Collateral Required From Electricity Wholesale Market Participants

Turkey’s Energy Market Regulatory Authority (“Authority”) has introduced new procedures and principles for calculating collateral amounts for wholesale market participants (“Procedures and Principles”). Electricity market participants can offer collateral in cash or via certain specified assets. Such collateral is intended to cover situations where market participants fail to meet their obligations, mitigate the Market Operator’s risks, as well as secure other market participants.

The new Procedures and Principles outline Enerji Piyasaları İşletme A.Ş.’s, responsibilities as the authorized Market Operator (Article 5). They also describe detailed circumstances where the Market Operator can increase the collateral value (Article 6), as well as secured transaction processes (Article 7). 

The Procedures and Principles list certain assets which are accepted as collateral, along with value calculation methods (Article 8):

– The Market Operator should determine the minimum cash collateral ratio for market participants regarding day-ahead balancing and the intraday market. The Market Operator should publish the ratio at least one month prior to its effective date.

– Rather than cash, Market participants can also provide collateral via one or more assets, provided these assets are listed in the Procedures and Principles.

– Asset collateral and guarantee letters in foreign currency are subject to a valuation coefficient. The Market Operator determines the coefficient, at the suggestion of the central reconciliation bank, in accordance with coefficients applied in similar markets. The Market Operator announces the coefficient to market participants through the Market Management System (“MMS”).

– Market participants bear all collateral-related expenses.

The Market Operator should determine the initial collateral margin via the Margin Calculation Procedure and publish this through the MMS at least one month before its effective date (Article 9).

In principle, for the Market Operator to accept offers by market participants regarding day-ahead balancing and/or the intraday market:

– The value of cash collateral presented should be greater than or equal to the minimum collateral, and

– The collateral level should be greater than or equal to the total collateral value presented.

The Procedures and Principles outline general principles for collateral control (Article 11):

– The collateral value which market participants should provide for day-ahead balancing and intraday market activities, as well as the initial margin value to be provided, should be borne by the relevant market participant.

– The collateral value provided for reconciliation of instability should be borne by the party liable for the relevant stability.

– If it is determined the total collateral provided by a market participant does not cover the total risk, the Market Operator can request the participant present an increased collateral value in line with the Margin Calculation Procedure.

The Procedures and Principles were published in Official Gazette number 29725 on 28 May 2016, entering into effect on 1 June 2016. The Procedures and Principles were adopted by the Energy Market Regulatory Board decision dated 13 May 2016. Please see this link for the full text of the Procedures and Principles (only available in Turkish).

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Turkey Introduces Establishment and Operation Principles for Companies Preparing Technical Documents in the Mining Sector

Turkey’s Ministry of Energy and Natural Resources has announced principles and procedures for establishing the Authorized Legal Entities (“ALE”) which prepare reports, projects and any kind of technical document submitted to the General Directorate of Mining Affairs (“General Directorate”) within the scope of Mining Law numbered 3213. The requirements also address ongoing audit and compliance obligations for such entities.

The Regulation on Authorized Legal Entities (“Regulation”) was published in Official Gazette numbered 29731 on 3 June 2016, entering into effect on the same date.

The Regulation defines ALEs as legal entities which are a mining license holder or have an enterprise and are any of the following:

– Authorized to prepare any report, project and all kinds of technical document required to be submitted to the General Directorate,

– Have majority shares held by engineers; or

– Employ engineers having qualities determined under the Regulation.

A competence certificate is required from the General Directorate to establish an ALE. Competence certificates are valid for five years and ALEs must apply to renew such certificates at least two months before their expiry date.

ALEs intending to obtain a competence certificate must permanently employ at least five people:

– Mining engineer, with at least five years’ experience.

– Mining engineer, regardless of experience.

– Geological engineer, with at least five years’ experience.

– Geological engineer, regardless of experience.

– One of the following:

– Topographical engineer.

– Hydrogeological engineer.

– Environment engineer.

– Geophysics engineer.

– Mineral processing engineer.

– Metalurgist.

– Agriculture engineer.

– Forest engineer.

– Electricity engineer.

– Mechanical engineer.

An ALE’s employee cannot also be employed by another ALE, or execute a contact with another ALE.

Technical documents drafted by ALEs must meet the following criteria:

– Prospecting reports and all kinds of technical prospecting documents must be prepared under supervision of a geological engineer.

– If prospecting is made via geophysics, prospecting reports must also be signed by a geophysics engineer.

– Operating reports and projects must be prepared under supervision of a mining engineer.

– If operating reports and projects include matters related to other disciplines, engineers for such disciplines must also sign these documents.

– The coordinator must sign all documents which are required to be submitted to the General Directorate.

ALEs must inform the General Directorate within a month about any changes in employees who were indicated when applying for the competence certificate. ALEs must also inform the General Directorate within 10 days about employment terminations for any reason.

If an ALE’s majority shares are held by non-engineers, such inconsistency must be eliminated within three months from the date of non-compliance.

ALEs must execute a contract with license holders before providing services. The General Directorate must be informed within a month regarding execution and termination of such contracts. All documents submitted to General Directorate without executing a contract will be deemed invalid.

It is not possible to execute a contract with more than one ALE in the same license field. However, if different exploiters operate and/or prospect within the same license field, then it is possible to execute contract with different ALEs.

Please see this link for the Regulation (only available in Turkish).

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Turkey Halves Threshold where Employers Must Pay Employees Via Banks

Turkey has halved the threshold where employers become required to pay employees via banks. From 1 June 2016, the bank payment obligation now applies to employers (and third persons whose workplaces and enterprises are subject to the Turkish Labor Code) which have five employees or more. Previously, the threshold was ten employees.

The bank payment obligation applies to all employee payments, including salaries, premiums, bonuses and all other similar remuneration.

Please see this link for the full text of the Amendment Regulation to the Regulation regarding Payment of Salaries, Premiums, Bonuses and All Kinds of Similar Remunerations Via Banks was published in Official Gazette number 29718 on 21 May 2016 (only available in Turkish).

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Amendments to Value Added Tax Arrangements in Turkey

Turkey has announced a range of changes to Value Added Tax arrangements. Notable changes include clarification that overpaid tax during exports will not be refunded, tax obligations become suspended during force majeure events, as well as international organizations being exempt from Value Added Tax for goods or services in certain circumstances.

The Communique on Amendments to the Communique on General Implementation of Value Added Tax No. 6 (“Communique”) was published in Official Gazette number 29718 on 21 May 2016 and entered into effect on the same date.

The key points of the Communique include declarations that:

– If a taxpayer overpays tax during exports, despite being entitled to request a discount, overpaid tax will not be refunded, nor any corrections made. This also applies to tax paid on goods or services procured from a foreign country.

– If a taxpayer is subject to force majeure, tax assignment will be delayed until the force majeure ends. Partial stoppage procedures are also delayed until the end of a force majeure.

– Withholding tax procedures will not apply to wood and forestry products by exporters, or parties which create products via procurements from the administration, official institutions and organizations, as part of the attached sheets in the Public Finance Management and Control Law numbered 5018.

– International organizations and their subsidiaries are exempt from value added tax for goods or services which are:

– For official use by an international organizations or its subsidiary,

– Intended for social and economic purposes,

– Without charge, or

– For administrative staff who are not Turkish citizens, during the term of office in Turkey.

Please see this link for full text of the Communique (only available in Turkish).

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Turkey Announces Action Plan to Support Rural Development in 2015 to 2018

Turkey’s High Development Agency has approved an action plan (“Action Plan”) to support rural development during the 2015 to 2018 period. The Action Plan aims to develop the quality of life in Turkey’s countryside, to become equivalent to the national average, as well as to sustainably improve rural working and living conditions in becoming synchronized with urban areas.

The Action Plan outlines five strategic aims, 11 urgencies and 40 measures for Turkey’s national rural development policy in 2015 to 2018. Strategic aims and sub-categories include:

– Improving the economy and increasing rural employment opportunities

– Improving the competitive capacity of food and farming

– Diversifying the rural economy

– Curing the rural environment and maintaining continuity of natural resources

– Maintaining soil and water resources

– Providing effectiveness in use of soil land

– Maintaining forest resources

– Improving the social and psychical infrastructure of rural settlements

– Improving the human capital of rural society and decreasing poverty

– Improving corporate capacity for local progress

– Improving the service delivery capacity of public

– Empowering enterprises towards local progress

The Action Plan was published in Official Gazette number 29729 on 1 June 2016. Please see this link for full text of the Action Plan (only available in Turkish).

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Turkish Constitutional Court: Legislation Allowing Cases to be Ceased and Renewed Does Not Breach Right to Fair Trial

The Turkish Constitutional Court recently examined and rejected a cancellation request regarding Article 150(1) and 150(4) of the Civil Procedural Law (decision dated 5 May 2016, numbered 2016/36). These provisions allow cases to be ceased when parties do not attend hearings, as well as to be renewed within three months. The applicant claimed the provisions prolong law suits and are often used in bad faith, breaching the right to a fair trial.

A first instance court requested the Constitutional Court to consider Article 150(1) and Article 150(4) of the Civil Procedural Law numbered 6100. Article 150(1) provides that a file can be ceased if the parties fail to attend hearings. Article 150(4) allows a case to be renewed within three months after ceasing the file.

The lower court claimed these provisions prolong proceedings, especially in complicated cases, causing a long waiting period to obtain a judgment and preventing courts from fulfilling their obligation to complete proceedings within the minimum time and expense practically possible. It claimed parties could use the procedural rules in bad faith to cease cases. Accordingly, the lower court argued that these provisions contradicted the constitutional right to a fair trial and should be cancelled.

The Constitutional Court rejected the lower court’s application. It held that the provisions met the “commission principle”, which indicates that the parties are competent to decide whether or not to file a case and/or attend the case. The Constitutional Court also held that the provisions met the “right to be heard” principle, which indicates that the parties must submit related facts and evidence to the court. The Constitutional Court held the provisions do not cause prolongation of the case, but rather accelerate proceedings and serve “procedural economy”.

Please see this link for full text of the Constitutional Court Decision (only available in Turkish).

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Turkish Pharmacists No Longer Required to Register With Charity Fund

Turkish pharmacists are no longer required to register with the Charity Fund when registering to the Chamber of Pharmacists. Charity Fund registration is now left to the discretion of the individual pharmacist. For pharmacists which are registered to the Charity Fund, the annual subscription fee payment due date has been moved forward from May to February. 

The Regulation Making Amendments on the Charity Fund Regulation (“Amendment Regulation”) was published in Official Gazette number 29720 on 23 May 2016.

The Amendment Regulation also makes the following changes:

– Previously, pharmacists could only de-register from the Charity Fund by de-registering from the Chamber of Pharmacists. Under the amendments, pharmacists can now de-register from the Charity Fund and continue their Chamber of Pharmacists registration.

– The Charity Fund’s management was previously authorized to issue receipts regarding the Charity Fund’s incomes. However, this has now been amended to simply involve keeping records of the Charity Fund’s incomes and expenses.

Please see this link for the full text of the Amendment Registration (only available in Turkish).

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Turkey Includes Electricity Leakage Costs in Distribution Tariffs, Plus Other Amendments to Energy Regulations

Turkey has made a range of changes to energy regulations, notably related to electricity leakage loss. These leakage costs can now be passed on to consumers as part of distribution tariffs. The amendments apply to a range of energy legislation, including provisions relating to electricity, LPG, nuclear, coal mining licenses, and renewable energy, as well as the powers and make-up of certain regulatory bodies.

The Amendment Law numbered 6719 on Electricity Market Law and some other laws (“Amendment Law”) was published in Official Gazette number 29745 on 17 June 2016, entering into effect on the same date.

Key changes under the Amendment Law include:

– The costs of technical and non-technical losses by distribution companies, as well as illegal uses, can now be reflected to consumers by inclusion in distribution tariffs. These losses constitute the difference between the amount of supplied energy and energy charged to consumers.

– Consumer arbitration committees and courts become authorized to supervise compliance of the actual loss and leakage costs applied to consumers compared to the consumer tariff regulations issued by the Energy Market Regulatory Authority. The change includes ongoing actions against distribution or supply companies.

– Components installed for renewable energy resources used on manufacturing sites must now be domestically produced.

– If the Turkish Electricity Trade and Contracting Corporation cannot meet the amount of electrical energy required under an agreement, it will provide electricity from an electricity company whose production plant is fueled by domestic coal.

– The General Directorate of Mineral Research and Exploration becomes empowered to operate outside Turkey. In particular, it can now conduct research, establish a company, enter a partnership, be a privileged shareholder, buy and sell stock and shares, as well as open offices.

– The scientific responsibility articles of the Constructions Inspection Law and Constructions Zoning Law will no longer apply for constructions within nuclear power stations. Rather, these will now be inspected by institutions empowered by the Turkish Atomic Energy Authority.

– Coal mining licenses can now be prepared separately to other minerals, with the Ministry’s prior consent.

– The Energy Market Regulatory Authority decreases from nine to seven members.

– The scope of the Public Tender Law is narrowed to now exclude:

– Energy, fuel, goods, services, consulting services and big repair works provided by entities related to the Ministry of Energy and Natural Resources

– Electricity energy bought by the Turkish Electricity Trade and Contracting Corporation.

– A licensee will now lose its license if it sells LPG which is not in line with the technical regulations, and repeats this action three time during the license period. The licensee will also be required to compensate and damages within three months.

Please see this link for full text of the Amendment Law (only available in Turkish).

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