REPUBLIC OF TURKEY
PRIME MINISTRY
PRIVATIZATION ADMINISTRATION
www.oib.gov.tr
OECD MEETING
10-11 October 2002, İstanbul
Social Dimension of Privatization in Turkey:
Employment and Labor Adjustment Policies
M. Hakan YILDIZ
Vice President, PA
1
PRIVATIZATION LAW
Privatization policies must not only
pay attention to economic outcomes
but also to social outcomes.
2
PRIVATIZATION LAW
The legal infrastructure for privatization
implementations was actually laid with
the Privatization Law 4046.
3
PRIVATIZATION LAW
The Law 4046 brought about arrangements that
also took into consideration the social effects of
Privatization.
4
PRIVATIZATION LAW
Keeping in mind the impact of
privatization on employment, the most
essential arrangements were those
facilitated the amelioration of the
potential
negative
effects
of
privatization on employment.
5
PRIVATIZATION LAW
Looking at establishments that are in the
scope of privatization and in the program
of privatization, it can be seen that
regarding the employees 82 % are not
subject to transfers and 18 % are subject
to transfers to other establishments.
6
EMPLOYMENT STRUCTURE
61
70
%
GRAFİK 1
60
50
40
21
30
20
10
4
4
10
0
Civil Servants Subj
to Law 657 (subj.
to transfer)
Contractual
Workers (subj. to
transfer)
Workers Subj. to
Labor Law 1475
(subj. to transfer)
Permanent Workers
(not subj. to
transfer)
Temporary
Personnel (not
subj. to transfer)
Personnel
type
7
EMPLOYMENT STRUCTURE
82
90
80
70
60
50
%
40
18
30
20
Personnel
Type
10
0
1
2
Personnel subject to
transfers
Personnel not
subject to transfers
8
PRIVATIZATION LAW
Law 4046,
A.
Arrangements regarding personnel subject to
Civil Servants Law 657, contractual personnel
and workers who are subject to Labor Law no.
1475.
B.
Arrangements regarding the personnel who are
working for a fee (subject to Labor Law) with
service contracts.
9
PRIVATIZATION LAW
For the personnel in group A, Law 4046
arranges for;
•
them to be transferred to other public
establishments
during
preparation
for
privatization or after privatization,
•
all financial entitlements to be paid out of the
privatization fund during transfer phase,
•
those that are connected to the Pension Fund
agree to retire within two months of eligibility
to retirement after the establishment has been
taken into the privatization program receive
their pension grants with a 30 % bonus.
10
PRIVATIZATION LAW
For the personnel in group B, Law 4046
arranges for;
The payment of “Job Loss Compensation” apart
from those compensations that arise from the
law or from their collective bargaining
agreements.
11
OTHER MEASURES
Apart from financial arrangements; obligations
have been set for the private sector to employ a
certain amount of personnel or give priority to
those that have been made redundant due to
privatization, keeping in mind the features of
the region, the nature of the establishment and
other criteria of the establishment that is being
privatized.
12
PRIVATIZATION AND LABOR
ADJUSTMENT POLICIES
13
Labor Adjustment Policies
Labor Adjustment Program aimed to facilitate SOE
restructuring by providing assistance to affected
workers, enterprises and communities to shorten the
duration of frictional and structural unemployment.
14
Labor Adjustment Policies
Therefore, there was a need to put labor adjustment
programs in place with a view to strengthen market
orientation of local initiatives for economic and social
development.
This would assist in easing the social impact of SOE
restructuring and would reduce both the political
pressure and the risk of re-emergence of SOE
employment after restructuring.
15
Labor Adjustment Policies
For labor adjustment programs to succeed, it is
required that there is a participatory process
involving employers, labor and government
representatives. It is also important to ensure
that there are procedures for sufficient advance
notice to workers.
16
Labor Adjustment Policies : World
Bank Projects
Two World Bank funded Projects
I.
Privatization Implementation
Assistance and Social Safety Net
Project (PIAL) (1994-1999)
II.
Privatization Social Support Project
(PSSP) (2000+)
17
Labor Adjustment Policies : World
Bank Projects
The Labor Redeployment Services are paralel
to the Labor Adjustment Project with regards
to contents and the services rendered.
18
Labor Adjustment Policies : World
Bank Projects
Under
the
coordination
of
the
Privatization
Administration, it is being carried out by;
Turkish Employment Organization (İŞKUR) the
Small and Medium Scale Industry Development
Agency (KOSGEB).
19
Labor Adjustment Policies : World
Bank Projects
‘Tripartite Advisory Committee’
 Union and employer representatives
(TISK, TOBB, HAKİŞ, TÜRKİŞ)
 Government institutions;
(DPT, DİE, (Hazine) Treasury, KOSGEB, İŞKUR)
20
Labor Adjustment Policies : World
Bank Projects
The specific services to be financed will
seek to:
 improve labor mobility
frictional unemployment
and
resolve
 enhance and change human capital to
resolve structural unemployment and
increase efficiancy via training.
 address the lack of demand through
micro and small businesses, and temporary
community employment schemes
21
Labor Redeployment Services
Employment Services - İŞKUR
(through sub contracts at the local level)
1. Labor services: Job/social counseling, provision of
labor market information, aptitude/interest
assesment, job serach/job club programs, labor
exchange and placement services, relocation
services,
2. Retraining services: Vocational and general
education, literacy, formal small business skills
training,
3. Temporary Community Employment Services:
Environmental cleanup, refurbishment of public
infrastructure, provision of assistance and support
to social agencies.
22
Labor Redeployment Services
KOSGEB SERVICES:
(through sub contracts at the local level)
1. Small Business Assistance –KOSGEB
Provision of services, including but not limited to:
initial assesment of unemployed persons to start
business, developing business plans, advising on
accounting, financial legal, marketing and sales
services issues, assistance in the dialogue with local
authorities, short-term and other consulting services
to unemployed enrepreneurs who started businesses
during the past six months.
2. Small Business Incubators- KOSGEB
Facilities rental, small business consulting services for
tenants, shared support services and equipment for
common use by incubator management and tenants.
23
Labor Redeployment Services
Experiences in the past indicate that labor
redeployment services should be subcontracted on a competitive basis to local
service providers who would deliver
services on a performance contract basis
to local service providers; contracts
should
include
pre-negotiated
job
placement rates as appropriate with
related financial incentives.
24
Our Policy
For Turkey, privatization is an extreme
necessity and priority even if it encompasses
some difficulty. However, privatization
should not only be viewed as an economic
requirement, but also should be approached
as a means for ameliorating all potential
negativity and as something which spreads
the capital to the foundations and thus
creates
better
economic
and
social
conditions.
25