15TH PLENARY SESSION OF THE OECD ADVISORY GROUP ON PRIVATIZATION

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REPUBLIC OF TURKEYPRIME MINISTRYPRIVATIZATION
ADMINISTRATIONwww.oib.gov.tr
OECD MEETING 10-11 October 2002, Istanbul Social
Dimension of Privatization in Turkey Employment
and Labor Adjustment Policies M. Hakan
YILDIZ Vice President, PA
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PRIVATIZATION LAW
Privatization policies must not only pay
attention to economic outcomes but also to social
outcomes.
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PRIVATIZATION LAW
The legal infrastructure for privatization
implementations was actually laid with the
Privatization Law 4046.
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PRIVATIZATION LAW
The Law 4046 brought about arrangements that
also took into consideration the social effects
of Privatization.
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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.
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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.
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EMPLOYMENT STRUCTURE
Personnel type
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EMPLOYMENT STRUCTURE
Personnel Type
Personnel subject to transfers
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PRIVATIZATION LAW

• Law 4046,
• 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.

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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.

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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.

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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.
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PRIVATIZATION AND LABOR ADJUSTMENT POLICIES
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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.
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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.
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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.
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Labor Adjustment Policies World Bank Projects

• Two World Bank funded Projects
• Privatization Implementation Assistance and
  Social Safety Net Project (PIAL) (1994-1999)
• Privatization Social Support Project (PSSP)
  (2000)

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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.
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Labor Adjustment Policies World Bank Projects
Under the coordination of the Privatization
Administration, it is being carried out
by Turkish Employment Organization (ISKUR) the
Small and Medium Scale Industry Development
Agency (KOSGEB).
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Labor Adjustment Policies World Bank Projects

• Tripartite Advisory Committee
• Union and employer representatives
• (TISK, TOBB, HAKIS, TÜRKIS)
• Government institutions
• (DPT, DIE, (Hazine) Treasury, KOSGEB,
  ISKUR)

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Labor Adjustment Policies World Bank Projects

• The specific services to be financed will seek
  to
• improve labor mobility and resolve frictional
  unemployment
• 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

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Labor Redeployment Services

• Employment Services - ISKUR
• (through sub contracts at the local level)
• 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.

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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.
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Labor Redeployment Services
Experiences in the past indicate that labor
redeployment services should be sub-contracted 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.
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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.