Wage Guarantee Fund (WGF) in Workplaces Who Applied for Concordat

Because of the covid-19 pandemic showing itself worldwidely, the number of companies who apply for concordat which came up instead of the postponement of bankruptcy rised highly. In this process employees of employers who can’t pay the wages because they are going through an economically difficult period, can benefit from the Wage Guarantee Fund (WGF).

About this topic the regulation no. 27272 Wage Guarantee Fund Regulation issued by the Turkish Employment Agency has given a definition of receivable wage as ‘’…The receivables of the employee arising from the employment relationship and the receivables of the employer regarding the basic wage for a maximum of three months, which was not paid before the difficulty of payment because of application for concordat, taking a certificate of insolvency, bankruptcy or postponement of bankruptcy…’. The WGF, which is established for this purpose consists of 1% of the annual total payments made by employers as unemployment insurance premium. One of the most important points here is that workers’ receivables due after the arising of payment difficulties are excluded from the scope of the WGF.

So, what is required for employees to benefit from this fund? How should workers apply?

In order to benefit from the WGF payments;

· The receivable wage has to be a wage between employer and employee arising from the employment relationship,

· The employer has to fall in difficulty of payment (e.g. application to concordat),

· The employee should be have worked in the same workplace in the last 1 year before the employer had difficulty in payment.

· The employee’s receivable should be related to the wage receivables of the employer before the date when the employer has difficulty in payment and the employee has to obtain a Worker Receivable Certificate regarding the receivables,

· At most three months of the receivables belonging to a worker can be paid if all of the conditions above are fulfilled together.

Workers who provide the conditions counted above have to apply in person to a unit of the Agency; offering the WGF petition for request, the document showing that the employer has difficulty in payment and the document showing that they have receivable wages.

The agency makes the payment as at most three-month wages until the end of the following month. However, there is a daily wage receivable upper limit at paying the wage receivables according to the “Social Insurance And General Health Insurance Law” (Article 82) in the amount of 6,5 times of the daily earnings lower limit of insured employees. Daily wage receivables over this limit are paid from the upper limit regardless of the part exceeding it. Payments to be made are limited to the sources of the fund and are made according to the order of application. Those who are under the WGF can collect their payments from any Turkish Post PTT branch by showing their Republic of Turkey ID card.

With the WGF the legislator provided convenience for employees who cannot collect their wages from employers who have difficulty in payment and so tried to remedy these grievances in the amount of 3 months’ wages.

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Çakıroğlu Law Firm was established by Attorney Ömer Emrah Çakıroğlu in İstanbul.

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