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The Other Side Of The Medallion The "EYT" Regulation
Alperen Koçalan | ASSOCIATE25.11.2022
WHAT AWAITS EMPLOYERS AFTER THE "EYT" ARRANGEMENT?
Retirement age victims have been campaigning vigorously for a very long time in the aim of making the necessary arrangements for them to qualify for retirement and expressing their expectations from politicians with the public opinion they have formed.. At the beginning of October, Minister of Labor and Social Security Vedat Bilgin announced that “a regulation on the subject is being prepared” and there is almost no doubt that these efforts bear their fruit and a regulation will be made about them.
This situation made those who would benefit from the arrangement happy and hopeful. However, employers who are the other side of the medallion were left with a number of questions about how the issue would affect them. So why does this regulation concern employers this much?
Who is the Retirement Age Victim ?
Before answering the question above, it is useful to give a short answer to the question of "who are retirement age victims?" The persons referred to as retirement age victims are the persons who started working as an insured person before 08.09.1999 and who cannot qualify for retirement because they cannot meet the necessary age criterion following the increase in the retirement age after the change of the social security law.
So Why Does This Regulation Concern Employers?
As it is known, in accordance with the relevant Article 14 of the Labor Law No. 1475, which remains valid in relation to severance pay, persons who provide the premium day and insurance period stipulated for receiving an old-age pension are entitled to severance pay if they want to leave work of their own accord.
In the event of the entry into force of the regulation that will enable retirement age victims to qualify for retirement, there are two main dangers awaiting the employer.
The first of these is the severance pay burden that employers will face. For each employee who wants to leave work on the grounds that (s)he is entitled to retirement and his term of office exceeds one year according to employment contract, employers are required to pay severance pay to the employee in the amount of 30 days' vested gross wages for each full year during the continuation of the employment contract from the date when the employee started to work. Therefore, in order for employers to see ahead financially and make the necessary preparations, they need to review the employee profile and calculate the burden of severance pay that may be created by their employees who may be eligible for retirement after the regulation. If the regulation enters into force in 2023, the assessment to be made on this issue should be made by taking into account the new severance pay ceiling to be determined.
The second danger is that with the entry into force of the regulation, there will be a sudden loss of the employee who will benefit from the regulation. From the employer’s perspective, many of the employees who will enter in the scope of retirement age victims are equipped and experienced personnel in terms of their age, in addition, employees who will leave their jobs due to retirement do not have to use a notice period. When viewed from this window, with the termination of the employment contract of employees due to retirement after the regulation/arrangement , it will be inevitable that in a very short period of time many employers will lose an invaluable know-how and corporate memory,. With this sudden separation, the employer will have difficulty to fill the employee's place, and the newly arrived employee will also have to make an intensive effort to adapt to his task and acquire the same qualities as the former employee.
Is It Possible to Prevent Someone Who Wants to Retire?
So, is it possible to prevent an employee who is entitled to retirement from exercising this right? It should be noted that the cases of entitlement to severance pay and the way the compensation is calculated are being considered as a matter of public order. Therefore, these situations, which are stipulated in the law and which entitle the employee, can’t be restricted against the employee. For this reason, it will not be possible to prevent an employee who wants to leave his job due to the fact that he is entitled to retirement.
Although it is not possible to restrict the rights of employees in this direction or to postpone the exercise of their rights, it may be possible to encourage employees to continue working. Employers may provide some additional benefits for their employees who continue to work even though they are entitled to retirement, they may provide additional side benefits , they may conclude some agreements guaranteeing their current entitlements and thus , they can eliminate the disadvantages that the “EYT” arrangement will constitute for them.
The Content of the Regulation Remains Unclear
Although the incoming explanations increase the excitement and hope on the subject, it should be underlined that the content and scope of the regulation regarding EYT's still remain unclear. Therefore, the will of the legislator will also be able to provide a number of changes, opportunities or restrictions concerning the issues mentioned above. The relevant legal regulation is expected to be introduced to the parliament in December 2022 and enter into force at the beginning of 2023. We will wait and see the details of the regulations to be made about the retirement age victims in the following days.