The Ministry of Labour and Vocational Training (“MLVT”) issued Notification 018/20 on Suspension of Installments of Back Pay of Seniority Payment prior to 2019 (“Back Pay”) and New Seniority Payment (“New Pay”) in 2020 dated 2 June 2020 (“Notification 018”).
Notification 018 provides that installments of Back Pay (for employees in the Garment, Textile, and Footwear manufacturing sectors) and New Pay (for employees in all sectors) in 2020 are suspended to 2021. Please note that the provision of Back Pay and New Pay is applicable to only employees under undetermined duration contracts and is not applicable to employees under fixed duration contracts.
Even though the installments of Back Pay and New Pay in 2020 are suspended, employers are required to provide all remaining Back Pay and New Pay to employees upon termination of employment in accordance with the Labour Law and applicable regulations. The exception to this requirement is only in the event of termination due to serious misconduct or resignation by the employees themselves.