Legal Business

Sponsored briefing: Effects of Covid-19 pandemic on private sector employment and applicable methods

Sponsored briefing: Effects of Covid-19 pandemic on private sector employment and applicable methods

As we stated in our publication dated 16 March 2020, the Covid-19 (Coronavirus) pandemic indicates that it is one of the most important projections on the employment relations between employer and employee. Under current circumstances; many employers have been carrying on or will carry on remote working (homeworking) in regard to their white-collar employees either for all of them or alternately until a further notice is made. The current status of the pandemic and the applicable solution methods particularly in the scope of employment relations in terms of the uncertainty of the pandemic’s spreading speed and the precautions taken by the government are examined in this publication.

1. The Solution Methods That Could Be Applied in Terms of Continuation of Employment Relation

Legal Business

Sponsored briefing: COVID-19 and its effects – Frequently asked question in context of labour law

Sponsored briefing: COVID-19 and its effects – Frequently asked question in context of labour law

Nowadays, witnessing the heavy effects of Covid-19 (Coronavirus), described as a ‘pandemic’ by the World Health Organization (WHO), on employee-employer relations, we share our evaluations regarding the issues put on the agenda by any employees and employers, here in this article in the form of frequently asked questions.

1. What sort of precautions can be taken in the workplace due to the pandemic?

Enterprises should determine the measures to be taken in the workplace and work areas, take decisions and implement them immediately such as providing and positioning disinfectants, following the hygiene rules and supplying masks through gathering the Occupational Health and Safety (OHS) committees. Necessary precautions should to be taken in terms of hygiene and cleaning, by working with occupational safety specialists and workplace doctors.

Legal Business

Sponsored briefing: Advisory Announcement of the Ministry of Trade on the Dividend Distribution of Companies during COVID-19 Outbreak

Sponsored briefing: Advisory Announcement of the Ministry of Trade on the Dividend Distribution of Companies during COVID-19 Outbreak

The letter that was sent to all chambers of commerce by the Turkish Union of Chambers and Commodity Exchanges (TOBB) on 1 April 2020, numbered 34221550-045.02-3392 referring to the letter of the Ministry of Trade (Ministry) dated 31 March 2020 (the Announcement) advises companies to preserve their equities during the COVID-19 pandemic. TOBB also made an advisory announcement regarding the need to limit the distribution of profits in order to prevent companies from falling into a state of capital loss and debt because of the outbreak. The Announcement recommends all companies, except state-owned enterprises, preserve their equities and in this regard, take the below principles into consideration for General Assembly meetings for the 2019 financial year that will be held this year.

How the Ministry recommends decisions to be taken on General Assembly meetings with regard to profit distribution?

Legal Business

Sponsored briefing: Legal effects of Covid-19 on the business life

Sponsored briefing: Legal effects of Covid-19 on the business life

Coronavirus, also known as COVID-19 (Coronavirus), has negatively affected business life in a very short period due to the precautionary measures taken in order to prevent its rapid spread, such as the ban on travelling, halt of production, quarantine practices, and national emergency resolutions, since its very first appearance in Wuhan, China. This epidemic, which has become a global threat, has been declared by the World Health Organization (WHO) to be a ‘pandemic’ (geographic epidemic above regions and groups) as of 11 March 2020.

The emergency measures that have been taken regarding Coronavirus have massively affected ongoing business life on a daily basis. Considering the unexpected and fast-moving nature of the epidemic, force majeure clauses in contracts and force majeure approaches of states and judiciary authorities have become one of the focal points of business people, shareholders and other market players, especially in terms of possible delays or non-performance in commercial relations. On the other hand, issues such as disruptions in supply and distribution chains, closure of workplaces and harbours, disruptions at customs, labour shortage and a decrease in consumption are interpreted as the preview of a global crisis. While the effects of the epidemic and the severity of the measures have increased day by day, we deem it helpful to address the effects of this pandemic from a multifaceted legal perspective within this article.

Legal Business

Sponsored briefing: Precautions and measures taken against Covid-19 pandemic

Sponsored briefing: Precautions and measures taken against Covid-19 pandemic

The Coronavirus pandemic, also known as Covid-19 (Coronavirus), which has been declared a ‘pandemic’ by the World Health Organization (WHO) as of 11 March 2020 and spread rapidly in our country in a short time, prepares the ground for a global social and economic crisis that may arise in the next few months, in addition to having a global health crisis. For this reason, governments, institutions, organisations and companies have taken action to take all measures in all respects, primarily protecting the public and human health, and then economic measures. In line with the measures taken in relation to the pandemic, efforts are made to prevent the damage caused by quarantine practices, closure of workplaces, import and export restrictions, and a reduction in consumption, and to reduce the negative impact of current measures.

The historical decrease in the Baltic Dry Index which is one of the most important indicators of world trade indicates the contraction in world trade while the record decrease in Brent Oil prices points to a decrease in production and growth. The mentioned economic indicators show that the economic contraction caused by the Coronavirus pandemic has spread all over the world.

Legal Business

Sponsored briefing: Precautions and measures taken against Covid-19 pandemic-II

Sponsored briefing: Precautions and measures taken against Covid-19 pandemic-II

In order to prevent the effects of the Coronavirus pandemic, also known as COVID-19 (Coronavirus), which has spread to the whole world, many precautions are being taken by governments, institutions and organisations. The precautions and measures taken in Turkey were examined in our previous article published on 23 March 2020 with the title ‘Precautions and Measures Taken against Covid-19 Pandemic’. As a continuation of our previous article, we hereby wish to mention the measures taken recently in light of the current developments.

I. MEASURES TAKEN BY LAW

‘The Law Amending Certain Laws numbered 7226’ (the Omnibus Bill) was published on the Official Gazette dated 26 March 2020 and numbered 31080. The measures taken to prevent the spread of the Covid-19 outbreak in our country have been enacted by the Omnibus Bill. In line with the measures taken in relation to the pandemic, regulations have been made on many issues such as the Ceasing of Proceedings, Conditions for Benefiting from the Short-Term Work Allowance, Compensation Time, and Lease Payments. You can reach the detailed content related to the Omnibus Bill from our article published on 27 March 2020 with the title ‘The Law Amending Certain Laws Numbered 7226 and Its Legal Reflections to Business Life’.

Legal Business

Sponsored briefing: Q&A – Vefa Resat Moral

Sponsored briefing: Q&A – Vefa Resat Moral

How would you describe the current state of the Turkish legal market?

In two words, ‘fragile’ and ‘optimistic’. For the last half decade Turkey has been busy with national security, all types of elections, geopolitical developments and positioning, global mind games and, consequently, a recessed economy. Such uncontrollable developments are naturally pressing on business law and the legal market. Due to the above stated facts there have been several conditions precedent over the investment climate that negatively affect the legal market.

Given Turkey’s recent economic problems and the government’s new 5% growth target, how is this affecting your clients and what adjustments are they making given the current investment/economic climate?

All clients have been repositioning their status while revising business plans and budgets as the conditions are redealt with. Export and new markets are main ways out for manufacturing businesses as the Turkish lira has been devaluing over the past year. As a general overview, apart from clients’ short term, midterm loans have been restructured in a lot of big names in the Turkish market where our clients may have benefited. Clients aim to be transformed to sharp sharks from big whales by trying to increase profitability rather than revenues via certain measures such as cost cutting, reduction of headcount, prolonging maturities and other measures over procurement.

How can you and your clients mitigate the risks should there be an economic downturn?

Generally, they have been extremely diligent over their risk management in order to avoid potential unexpected disputes. They reduce national sales since there may be collateral problems with their dealer or clients. Therefore, they have been transformed conservatively by reducing their appetite for risk. Since collection and maturity are two big problems in the national market, they try to increase their liquidity. As stated above, they also experience certain day-to-day measures when trying to increase their export, while exploring new markets as much as possible. Furthermore, potential collaborations, alliances and partnership opportunities have been increased, since clients need market expansion.

What practice areas are busy and why, and which are the biggest originators of work, and why?

In the beginning of 2019, we have been appointed by two leading conglomerate companies in Turkey active on wide areas of business such as FMCG [manufacturing, fast-moving consumer goods], energy and logistics. As we also advise them on dispute resolution, litigation and employment, we took over more than 3,000 files from ten different law firms. That means our dispute resolution, litigation and employment departments have been very busy.

As a compliance department, we have also been appointed by several worldwide big names on wide areas of practice such as technology, FMCG, entertainment and cryptocurrency. Therefore, the compliance team is always busy and this is also an optimistic development regarding Turkey, with newcomers considering entering the market.

The M&A department has always been regularly active, especially for the last three to four years as we have been into ten law firms on deal counts under reputable tracking platform records. Despite the negative developments stated above, the first two to three quarters of the year were slow, however there have been optimistic developments that will keep our teams busy.

What changes have you noticed this year in the type and origin of work?

M&A work has slowed down due the stated political, geopolitical and financial developments, while dispute resolution, employment and compliance work have been substantially increased. We have the advantage of being a full-service firm with a strong, multi-skilled team.

Do you anticipate a resurgence in infrastructure/project finance?

Not in the short term as the market has reached saturation. However, there may be a spring in the mid term.

How is the local dispute resolution market – what types of disputes are prevalent?

Always busy even if the clients try to reconcile and diligently mitigate the risks. Our dispute resolution department both focuses on mass commercial disputes and employment disputes from well-respected clients, but also a high number of niche, unique cases that may turn into litigation battles.

The Turkish central bank’s drive to reboot growth, slashing benchmark rates by 7.5% since July and offering incentives for banks to offer credit – what impact is that having on bank advisory work?

Unfortunately, that was not efficiently reflected in the real market, excluding restructurings.

Which sectors are of most interest to M&A/private equity investors?

Export-oriented manufacturing, technology, e-commerce, services, energy and F&B [food and beverage].

What Turkish legislation has provided an impetus to foreign direct investment (FDI) and in which sectors?

There are certain legislations that were brought in for simplifying the investment climate, employment incentives and increasing free zones. However, there were also legislative developments questioned by foreign investors, such as limitations on contracts with foreign currencies, which kept legal world very busy. Currently VW’s choice of Turkey as a greenfield hub will certainly be a great indicator for FDI.

As the Turkish energy sector is being rapidly reshaped, what opportunities does this provide?

The market has been energetic for the last two years due to national tenders on renewable energy. Such tendered projects will most probably be the subject of takeovers that will increase the energy M&A market.

What impact is there for Turkish companies in compliance with global regulations and new national regulations, eg Turkish Data Protection Law, modelled on GDPR?

Data protection compliance in line with GDPR has been a trending topic since 2016. However, apart from highly affected sectors such as healthcare, banking, insurance and retail, international companies and some conglomerates have high corporate governance and awareness levels. More than 50% of the Turkish business world is not yet compliant with legislations. That has kept a new legal services market despite the cost concerns of the business world, especially when considering the high amount of consequences in administrative, financial and legal due to non-compliance.

For more information, please contact:

Vefa Reşat Moral, managing partner, Moral & Partners

T: +90 212 232 3595
E: resatmoral@moral.av.tr

www.moral.av.tr

Moral & Partners