IS THE EMPLOYER ENTITLED TO REDUCE THE WAGE OF THE EMPLOYEE?

ABSTRACT:

Employers sometimes apply for a reduction in the wages of Employees due to reasons such as the general economic situation of the country, the current market conditions and the economic crisis. The reduction in the wages of Employees should be considered within the scope of the Article 22 titled “Change in Working Conditions and Termination of The Contract” of the Labour Law. Within the scope of the aforementioned regulation, when the Employer wishes to make a reduction from the Employee’s wage, Employer shall notify the Employee with a text in which the full details of the reduction is explained and the Employee shall accept this reduction offer in 6 (six) working days in writing. In this Article, we would like to explain the conditions under which the reduction from the Employee’s wage will be valid.

 

EXPLANATIONS:

The wage constituting the most important element of the labour relationship for the Employees, on the other hand, constitutes the principal obligation of the Employer against the service debt of the Employee arising from the employment contract. In this respect, it can be said that the basic rule is to pay the wage of the Employee on the agreed amount and that the reduction is an exception. However, from time to time, employers can, exceptionally, apply to reduce the wages of Employees with operational requirements such as the country’s general economic situation, current market conditions, and the economic crisis.

Many issues such as the duties, wages, social benefits, and the place of work indicate the “working conditions” of the Employee. Essentially, changes in working conditions are directly under the right of management of the Employer.  However, the Legislator has stipulated the validity of the changes to be made to the working conditions of Employees under certain conditions under Article 22 of the Labour Law. Article 22 of the Labour Law has been regulated as; “Any change by the employer in working conditions based on the employment contract, on the rules of work which are annexed to the contract, and on similar sources or workplace practices, may be made only after a written notice is served by him to the employee. Changes that are not in conformity with this procedure and not accepted by the employee in written form within six working days shall not bind the employee.”  In this respect, a reduction in the wage against the Employee, which is one of the working conditions of the Employee, will create a substantial change in the working conditions of Employee. However, although there is no direct reduction in the wage of the Employee, moving the workplace to a farther location and forcing the worker to pay an additional road fare or being subject to unilaterally unpaid leave may also be interpreted as an indirect wage reduction. On the other hand, removing the bonus application in the workplace and adding it to the wage will not be considered as wage reduction. In accordance with the aforementioned regulation, if the Employer unilaterally decides to reduce the wage and the Employee’s wage is paid to him/her at a discount, this reduction will not be binding for the Employee. In this respect, in order to apply the wage reduction, it is conditional that the proposal for wage reduction must be made in writing to the Employee and this proposal shall be accepted in writing by the Employee within 6 (six) working days. In practice, although it is seen that the wage reduction offers made by Employers in general are prepared as a separate text, it is possible for Employer and Employee to sign a new employment contract which clearly states the wage amount to be reduced.

Finally, it should be noted that even if the Employee agrees in writing to the wage reduction, the new wage cannot in any case be determined below the statutory minimum wage set by the Minimum Wage Determination Commission at the beginning of each year.

Which rights Employees are entitled in case Employers unilaterally apply wage reduction without the written consent of the Employees?

In case Employees, according to sub clause e regulated as “If the employer fails to make out a wages account or to pay wages in conformity with the Labour Act and the terms of the contract” and sub clause f regulated as “or if he fails to implement the conditions of employment” in the Article 24/II of Labour Law titled “Employee’s Right To Break The Contract For Just Cause”; Employees will be able to claim severance payments from their Employers by using their right to terminate their employment contracts for good reason. In addition, Employees will be able to claim the missing amounts of their wages from their Employers. Since the Employee does not need to terminate the employment contract in order to claim the difference wage, the worker may apply legal remedies with the claim that he will receive a difference wage while the work relationship with the Employer is continuing. In this respect, it should also be taken into consideration that the period of limitations for severance pay, as for the wage receivables, has been reduced to 5 (five) years in accordance with the recent amendment to the Labour Law.

As a result, the wage, which is the most important element of establishing the business relationship between the Employee and Employer, is also a “working condition” and a reduction in the wage of the Employee is a substantial change in working conditions against the Employee. In this respect, the Legislator has not given the Employer the right to unilaterally reduce the wage of the Employee by the regulation introduced by Article 22 of the Labour Law and this amendment is required by the Employee to be accepted in writing within 6 (six) working days. The aim is to ensure that the Employee who is in a disadvantaged position in the employment relationship is enlightened about the change to be made and in a way to ensure that the Employee fully understands which subject he/she has approved to the Employer.

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