Lexploria

Communicated on 31 August 2016

SECOND SECTION

Application no. 39534/10 Muhsin DEMÄ°R against Turkey and 31 other applications (see list appended)

1. The applicants, whose names appear in the appendix, are Turkish nationals and live in Kütahya .

A. The circumstances of the cases

2. The applicants were employed as labourers by Eti Gümüş A.Åž. , a State ‑ owned mining company (hereinafter “the Company”) at the material time, until their employment contracts were terminated by the Company on 13 August 2004 owing to its privatisation.

3. Although the applicants were paid at the end of their contract their wages, bonuses and remuneration for unused annual leave, the Company declared only the applicants ’ gross wages to the Social Security Institution for the month of July. Following the applicants ’ complaint, the latter conducted an inspection of the records of the Company and discovered the amounts that had not been declared. The inspection report concluded that the undeclared amounts were subject to social security premiums and deductions, and ordered the Company to make the necessary contributions.

4. On an unspecified date after their contracts were terminated, the applicants applied to Ä°Åž KUR , the Turkish Employment Agency, to collect loss of employment indemnity as provided in section 21 of the Privatisation Act (Law no. 4046, paragraph 19 below). This section referred the calculation of the daily net amount to be paid to employees to another law, namely sections 77 and 78 of the Social Security Act (Law no. 506), which listed and specified the types of earnings subject to social security premiums and deductions.

5. Ä°Åž KUR paid various sums to the applicants based on their salaries originally declared by the Company to the Social Security Institution for the month of July 2004.

6. On 18 April 2005 the applicants brought separate sets of proceedings against Ä°Åž KUR before different chambers of the Ankara Labour Court, contesting the amounts they had received and seeking the full amount they would be entitled to under the applicable law. They claimed that the amount declared by the Company was less than the actual amount paid to them for the last month of employment, as was also disclosed by the inspection carried out by the Social Security Institution.

7. On 21 July 2005 section 21 of the Privatisation Act was modified with respect to the method of calculation of the indemnity for loss of employment. On the basis of this modification the indemnity for loss of employment would thereafter be equal to twice the daily minimum wage.

8. During the proceedings, the Ankara Labour Court decided to seek an expert opinion on the calculation of loss of employment indemnity in accordance with the law applicable at the time of the termination of the contract.

9. On 24 April 2006 the expert, referring to the official social security inspection with respect to the Company and the applicants ’ final payment, concluded that the applicants should have received amounts calculated on the basis of their last salary, including remuneration for unused annual leave and salary bonuses paid out to the employees twice a year.

10. Ä°Åž KUR contested the expert report and stated that bonuses and other payments not in the form of an ordinary salary should be apportioned over the course of one year and calculated accordingly.

11. The Ankara Labour Court asked for a new expert opinion, following the defendant ’ s objections. On 19 October 2006 the expert delivered a modified report, based on a calculation which continued to take into account the remuneration paid for annual leave, but this time only one-sixth of the salary bonus.

12. On 22 January 2007 the Ankara Labour Court delivered its decision and awarded the applicants the amounts stated in the expert opinion report.

13. On 29 January 2007 İŞ KUR appealed against the decision of the Ankara Labour Court, arguing that it should not have been held responsible for the failure of the Company or the Social Security Institution for the amounts not declared on the applicants ’ final payslip, and that these bodies and individuals should have been made parties to the proceedings.

14. On 19 July 2007 the Court of Cassation quashed the decision of the Labour Court, on the ground that the expert report had taken into account the remuneration for unused annual leave, which could not be considered “wages earned” in the technical sense.

15. The Ankara Labour Court ordered the expert to deliver a new opinion in the light of the Court of Cassation ’ s decision. The expert calculated the amount in accordance with the Court of Cassation ’ s decision and left the remuneration of unused annual leave out of its calculation altogether.

16. On 14 May 2009 the Ankara Labour Court awarded the applicants the amounts stated in the final expert report, which were approximately 80% less than those provided in the first report (see the annexed table).

17. On 7 July 2009 the applicants lodged appeals with the 9 th Civil Division of the Court of Cassation, citing some 146 decisions that had been taken by the same division with regard to claims which had been calculated by taking into account the remuneration for unused annual leave.

18. On 18 September 2009 the Court of Cassation rejected the appeals and upheld the judgment of the Ankara Labour Court, without providing reasons for the applicants ’ complaints concerning the conflicting decisions.

B. Relevant domestic law at the material time

1. The Privatisation Act and the right to indemnity for loss of employment

19. The relevant section of the Privatisation Act (Law no. 4046) read as follows:

“Indemnity for Loss of Employment and Other Services

Section 21. Employees who work in enterprises (excluding subsidiaries) which are subject to privatisation under this law, who have a contract of employment and whose contracts are terminated owing to restructuring for privatisation, privatisation itself, downsizing, cessation of activities in full or in part, or permanent or temporary closure or liquidation of such enterprises, and who are entitled to compensation in accordance with labour laws and their respective collective bargaining agreements, shall be entitled to indemnity for loss of employment in addition to, and not in lieu of, compensation envisaged by laws and in the collective bargaining agreement that applies to them ... All transactions with respect to compensation for loss of employment and other services will be carried out by, and under the direction and responsibility of, the Directorate of the Turkish Employment Agency ...

The indemnity for loss of employment is the daily net income to be calculated in accordance with the rules and procedure laid down in sections 77 and 78 of the Law on Social Security no. 506. Those entitled to indemnity for loss of employment under this article shall receive compensation for 90 days if they have had uninterrupted service with the same employer for at least 550 days; 120 days for service of at least 1100 days; 180 days for service of at least 1650 days; and 240 days for service of at least 2200 days.”

2. The Social Security Act and Income Subject to Premium

20. The Social Security Act (Law no. 506) defines “earnings” subject to premium deductions for the purposes of social security contributions as:

“Earnings Subject to Deductions

Section 77 - In the calculation of earnings subject to deductions accrued in a month payable by the insured and the employer, a gross total of

a) wages earned for the month,

b) any payment such as a bonus or a commission made in the month concerned ...

shall be taken into account.

Bereavement, childbirth, marriage and travel allowances as well as severance, notice, payments to cover cash register liability and benefits in kind, food and family allowances set annually by the Ministry of Labour and Social Security shall not be included in the calculation. Notwithstanding the exceptions set herewith, all other payments, whatever the name such payments are given, shall be included in the calculation ...

For the purposes of this law, the daily net earnings of the insured are one-thirtieth of that part of his earnings subject to deductions. ...”

“Daily Earning Ceilings:

Section 78. The minimum daily earnings for the purposes of calculation of deductions and taxes under this law shall be the minimum wage for persons above 16 years of age, calculated in accordance with section 39 of the Labour Code no. 4857; the maximum limit shall be 6.5 times the minimum wage.

Where the daily earnings of an insured person are less than the minimum limit or when an insured person works without remuneration, his daily earnings shall be calculated on the basis of the minimum limit; for those insured whose daily earnings exceed the maximum limit, the maximum limit shall be taken as a basis for calculation ...”

3. Labour Act and Annual Leave

21. The remuneration for unused annual leave is regulated by section 59 of the Labour Act (Law no.4857), which reads as follows:

“Section 59. Where a contract of employment is terminated, payment for annual leave accrued but not used shall be made to the employee or his beneficiaries on the basis of the wages he earned on the date of termination of the contract of employment.”

COMPLAINT

22. The applicants complain under Article 1 of Protocol No. 1 of the Convention that they did not receive the amount of indemnity to which they were entitled. According to them, despite the fact that the law was clear and had been applied consistently by State authorities and the courts in the social security setting, by taking remuneration for unused annual leave into account when deducting taxes and other deductions, the Court of Cassation refused their claims arbitrarily and in contradiction with its previous case-law, while providing no reasonable explanation for such divergence.

QUESTIONS TO THE GOVERNMENT

1. Has there been an interference with the applicant ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1? In particular, does the present case concern existing possessions or a legitimate expectation of acquiring possessions?

2. Have the applicants been deprived of their possessions in accordance with the conditions provided for by law within the meaning of Article 1 of Protocol No. 1 (see Brezovec v. Croatia , no. 13488/07 , § 59-60, 66-67, 29 March 2011 and the references made therein) ? In this regard:

a. Did the Court of Cassation ’ s decision of 19 July 2007, quashing the Labour Court ’ s judgment on the grounds that remuneration for unused annual leave could not have been considered as ‘ wages earned ’ in the technical sense, have any basis in law? The Government are requested to supply information with respect to the interpretation and the application of sections 77 and 78 of the Social Security Act (Law no. 506) to the remuneration for unused annual leave.

b. Has the Court of Cassation upheld the inclusion of remuneration for unused annual leave with respect to the cases cited below? If so, do the judgments delivered in case of the present applications conflict with them?

The Government is requested to submit to the Court a random selection of ten case files from the above-cited cases ( seven from the first subset and one each from the remaining ), and provide its written observations with respect to whether the Court of Cassation ’ s approach in those cases conflict with its approach in the present 32 cases of the applicants?

APPENDIX

No.

Application

no.

Lodged on

Applicant name

date of birth

place of residence

Due amount as per the 1 st Expert Report

Due amount as per the 2 nd Expert Report

Due amount as per the 3 rd Expert Report

Final Award

39534/10

08/06/2010

Muhsin DEMÄ°R

07/09/1965

Kütahya

7.525.437.600

948.025

948.03 + fees

39535/10

08/06/2010

Hüseyin YETİM

03/07/1964

Kütahya

7.819.938.392

5.003.819.856

1.415.190

1.415.19 + fees

39540/10

08/06/2010

Safiye KARÄ°P

03/11/1963

Kütahya

8.257.423.696

7.680.828.704

896.789

896.76 + fees

39541/10

08/06/2010

Mehmet ALTINAY

14/05/1964

Kütahya

7.598.326.192

984.735

984.74 + fees

39545/10

08/06/2010

Umahan KARABAÅž

20/09/1962

Kütahya

8.169.426.600

4.283.340.616

896.792

896.79 + fees

39548/10

08/06/2010

Süleyman GÜRSOY

13/12/1963

Kütahya

7.968.662.008

7.898.385.960

910.773

910.77 + fees

39551/10

08/06/2010

Metin AYTAÅž

29/05/1964

Kütahya

7.491.681.600

1.533.424

1.533.42 + fees

39553/10

08/06/2010

Ali Kemal BALABAN

07/07/1966

Kütahya

7.554.600.000

6.610.275.000

945.509

945.51 + fees

39557/10

08/06/2010

Mustafa KARA

09/10/1962

Kütahya

7.500.775.200

1.196.701

1.196.70 + fees

39559/10

08/06/2010

Alaattin TOSUN

02/06/1963

Kütahya

8.148.526.408

8.038.262.768

1.118.555

1.118.56 + fees

39561/10

08/06/2010

Ahmet ÖZKAYA

30/12/1964

Kütahya

7.527.728.600

not in file

1.195.348

1.195.35 + fees

39566/10

08/06/2010

Kadir EROL

27/10/1963

Kütahya

7.526.006.008

not in file

948.06

948.06 + fees

39567/10

08/06/2010

Ali ÇAKIR

21/01/1963

Kütahya

7.531.167.992

1.185.960

1.185.96 + fees

39576/10

08/06/2010

Mehmet ARAR

20/11/1964

Kütahya

7.543.800.392

948.913

948.91 + fees

39602/10

08/06/2010

Hamdi AYVAZ

01/04/1963

Kütahya

7.819.938.392

934.436

934.44 + fees

39604/10

08/06/2010

Yusuf YÃœCEL

01/02/1964

Kütahya

7.962.920.008

910.379

910.38 + fees

39609/10

08/06/2010

İzzet YALÇIN

01/05/1963

Kütahya

8.192.565.208

7.676.267.872

891.42

891.42 + fees

39615/10

08/06/2010

Erol AKPUNAR

24/07/1965

Kütahya

8.009.517.208

7.932.273.840

918.123.824

918.12 + fees

39616/10

08/06/2010

Servet KOYUN

01/11/1965

Kütahya

7.966.951.000

910.656

910.66 + fees

39622/10

08/06/2010

Salih Zeki AKSU

09/03/1965

Kütahya

8.200.940.400

1.110.927

1.110.93 + fees

39626/10

08/06/2010

Ali TUNÇ

05/03/1962

Kütahya

7.519.255.200

4.635.587.984

976.729

976.73 + fees

39627/10

08/06/2010

Necati ARMAÄžAN

22/03/1961

Kütahya

8.286.595.200

626.415

626.42 + fees

39629/10

08/06/2010

Ahmet Selami YÃœCEL

15/01/1963

Kütahya

7.819.938.392

934.436

934.44 + fees

44987/10

08/06/2010

Mehmet KARABULUT

02/01/1961

Kütahya

7.737.862.600

928.763

928.76 + fees

44989/10

08/06/2010

Servet Ä°ÅžAL

07/11/1964

Kütahya

7.819.938.392

5.003.819.872

1.415.190

1.415.19 + fees

44992/10

08/06/2010

Behti TEKELÄ°

02/02/1959

Kütahya

8.188.551.600

7.902.487.608

1.118.836

1.118.84 + fees

44993/10

08/06/2010

Mehmet TAVALI

07/11/1965

Kütahya

7.531.179.600

948.422

948.42 + fees

44995/10

08/06/2010

Muammer KOYULMUÅž

01/04/1963

Kütahya

8.038.685.408

7.902.694.944

915.616

915.62 + fees

44998/10

08/06/2010

Cumhur TETÄ°K

28/10/1965

Kütahya

7.946.378.400

7.927.833.440

914.031

914.03 + fees

45000/10

08/06/2010

Ali KARAAĞAÇ

01/04/1963

Kütahya

7.977.263.408

7.898.373.136

911.371

911.37 + fees

45003/10

08/06/2010

Halil ÇİL

01/04/1963

Kütahya

7.601.197.200

1.447.589

1.447.59 + fees

45007/10

08/06/2010

Tayyibe ALTINAY

01/12/1965

Kütahya

Cafer ALTINAY

08/11/1986

Kütahya

Resul ALTINAY

24/08/1992

Kütahya

7.630.359.600

1.017.902.816

1.017.90 + fees

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DEMİR v. TURKEY

DEMİR v. TURKEY

LEXI