Rights of Employees in Case of Salary Reduction

Salaries are classified as an essential component of an employment agreements. As a rule, the employer cannot amend the essential components of the employment agreement, including the amount of the salary, to the detriment of the employee through a unilateral decision.

The proposals by employers operating in various industries to reduce salaries are becoming more frequent as the economic impacts of the pandemic are increasing. In this article, we have briefly evaluated the issue of salary reduction.

Is the Employee Obligated to Accept a Salary Reduction?

It is not possible for the employer to reduce the salary determined in an individual or a collective employment agreement through a unilateral decision. The precedents set by the High Court of Appeals clearly indicate that the written consent of the employee is required for a salary reduction to become effective since a salary reduction is considered as an alteration to the essential components of the employment agreement. The employee is not obligated to provide his / her consent to a proposed salary reduction.

Salary deductions within the scope of the short time working fund are determined within the scope of the relevant legislation. Therefore, the consent of the employee is not required for salary deductions resulting from the implementation of the short time working fund.

Is a Salary Reduction Accepted by the Union Binding on the Employee?

Amendment to a collective employment agreement which includes an acceptance of a salary reduction by the employee’s union shall not bind the employee. Even in this case, the written consent of the employee is required for a salary reduction to be binding on the employee. This approach has become a situated practice of the High Court of Appeals subsequent to the decision of General Assembly of Civil Chambers dated 02.12.2015 numbered 2015/2743 K, 2015/990 E. In the following periods, subsequent to the decisions of the 9th Civil Chamber of High Court of Appeals dated 30.09.2014 numbered 2014/14321 E., 2014/28654 K. and dated 07.03.2016 numbered 2016/6647 E., 2016/4850 K., this approach continues to be situated practice of the High Court of Appeals.
 

What Are the Responsibilities of the Employer if the Employee Does Not Consent the Salary Reduction?

The employer is obligated to make full salary payments to employees who have not consented to the salary reduction. In the case of an underpayment of the salary an employee shall have the right to claim the underpaid amount. Moreover, an employee whose salary is underpaid may be entitled to seniority indemnity by terminating the employment agreement with a just cause.

Can an Employee Who Has not Consented to the Salary Reduction be Terminated?

An employer cannot terminate an employment agreement solely on the basis that the employee has not accepted a salary reduction without paying termination entitlements. Under these circumstances, it can be expected that the employer may terminate the employment agreement based on reasons such as economic difficulties or operational decisions.

In case the termination of employment has been carried out on basis such as economic difficulties or operational decisions, the employee shall be entitled to seniority indemnity and notice indemnity. In addition, employees who are subject to employment security provisions may request reemployment upon termination.

Reemployment Request

Employees subject to employment security provisions may request reemployment by claiming that the termination of the employment agreement is not based on a valid reason, is not implemented as a last resort or does not comply with the principle of equality.

If the request for reemployment is accepted by the court, employees who are requesting reemployment are entitled to 4 months salaries as “idle time salary” for the period of unemployment. In case that the employer does not reemploy the employee despite the court decision, the employee will be entitled to nonemployment indemnity in an amount corresponding to between 4 to 8-months’ salary.