İş Holding, which operates the KFC and Pizza Hut franchises in Turkey, has applied for debt restructuring due to liabilities of 7.7 billion liras (~213 million US dollars).
The court granted a three-month temporary respite to İş Gıda and its owner İlkem Şahin. On Jan 31, it appointed a temporary bankruptcy administrator for the company.
About 6,000 workers in 450 restaurants have not been paid their receivables. Employees protested in İstanbul, Bursa and Ankara on Feb 6 and in İzmir on Feb 8 for their salaries, severance and notice pay, leave pay, overtime receivables and other rights.
Workers stated that the concordat prevented them from leaving their jobs. They called for an investigation into the tangible and intangible assets of other companies within the holding, claiming that they were victimized by Şahin's “greed for profit.”
‘Laws protect bosses’
Labor Lawyer Sevgi Evren told bianet that even if a company applies for debt restructuring, it has an obligation to pay workers their rights. “It is not a legal situation for a company that says 'I am withdrawing from the market, I will no longer produce' not to pay the workers' compensation,” she said.
Labeling İş Holding's application as “a step towards getting rid of the burden of bankruptcy,” Evren added that the legal framework disadvantaged workers. “The concordat process is a legal arrangement that protects employers. Therefore, workers suffer the most in these processes. The concordat officer is supposed to protect workers, but there is no mechanism to supervise and regulate this.
“The court will decide whether the employer will go bankrupt or not. Even in the case of bankruptcy, the law says that the worker is the first creditor. However, this is not the case in practice. The workers comes only after public receivables. Therefore, workers need to unite and legitimately pressure the authorities and demand their rights because the legal system is not geared towards protecting workers.”
Explaining that regulations such as the guarantee fund and work exit can also be used when certain conditions are met, Evren said, “The guarantee fund is an application that can be activated if company salaries cannot be paid within three months. If the concordat officers do not pay the salaries, the workers must apply to the guarantee fund by reporting this at the end of three months.”
Evren further said that if the workers are not dismissed, they will not be able to work elsewhere and added, “Workers can resign, but this creates a separate legal process in order to receive their receivables. It would be much more correct to unite and demand their receivables as a union.”
About İş Holding
Hüseyin Şahin founded the company in 1950. It was initially in the home textile sector. Şahin's son İlkem Şahin turned the company into İş Holding in 2014. İlkem Şahin is currently the Chair of the Board of Directors.
The holding has companies in the food, logistics, agriculture, industry, energy, textiles, construction and real estate, IT, foreign trade, media and art sectors. It also sells franchises of brands such as KFC, Pizza Hut and Krispy Kreme.
In 2020, Şahin bought the Turkish franchises of KFC and Pizza Hut from Yum Brands in the US. Yum Brands awarded İlkem Şahin the franchisee of the year award in 2023. On Feb 12, 2024, he was named the most successful man of the year by GQ Magazine.
In the same year, many of his companies in Germany went bankrupt. At the beginning of this year, Yum Brands terminated its franchise rights. Şahin applied for debt restructuring for KFC and Pizza Hut.
(AV/HA/VK)
