A) LEGAL BASIS AND DEFINITION
Sub-contractor is defined as an employer who is a natural or legal person or legal entity that engages in work for which the main employer and his or her employer are required to work in jobs that require expertise for technological reasons, refers to institutions and organizations in Subcontractor Directive dated 27.10.2008 and numbered 27010 ("Subcontractor Directive"). In addition, according to the paragraph 6 of Article 2 of the Turkish Labor Code numbered 4857 ("Labor Code"), subcontractor is an employer who undertakes to carry out work in auxiliary tasks related to production of goods and services or in a certain section of the main activity due to operational requirements or for reasons of technological expertise in the establishment of the principal employer and who engages employees recruited for this purpose exclusively in the establishment of the principal employer.
B) JOINT LIABILITY OF PRINCIPAL EMPLOYER
In addition, paragraph 6 of Article 2 of the Labor Code also regulates; "The principal employer shall be jointly liable with the subcontractor for the obligations ensuing from this Labor Code, from employment contracts of subcontractor's employees or from the collective agreement to which the subcontractor has been signatory". As stated above, principal employer is jointly liable with the subcontractor for the obligations to its employees. Therefore, subcontractor and principal employer have a relationship that creates a joint liability which is arisen from Labor Code or collective agreement.
C) COLLUSION: WHEN MAIN WORK IS ASSIGNED TO SUBCONTRACTOR
Paragraph 7 of Article 2 states; "The main work shall not be divided and assigned to subcontractors, except for operational and work-related requirements or in jobs requiring expertise for technological reasons" and according to the Subcontractor Directive, if a part of the main work which are not specialization-required and related to the production of the goods or services that are carried out at the workplace is subcontracted, the subcontract between principal employer and subcontractor will be evaluated as a collusion.
Main work is defined as, the work that forms the basis of the production of goods or services and auxiliary work is defined as a work that is related to the production of the goods or services carried out at the workplace but is not directly involved in the production organization, that is not a compulsory element of production and a work that continues if actual work continues and is dependent on the actual work. Therefore, if subcontracted employees is employed for a part of the actual work and if it is considered as non-specialization-required work then employees will be evaluated as principal employer's employee from the beginning.
D) ADMINISTRATIVE PENALTY REGARDING COLLUSION AND ILLEGALITY
If subcontract between principal employer and subcontractor is determined by a labor inspector as a collusion, Social Security Institution will designate an administrative fine 21.036-TL1 per principal employer and subcontractor.
In addition, if Social Security Institution determines that subcontractor carries out its workflow against the provisions of the legislation (for instance not keeping employee's personnel files properly) employer will be responsible for a possible administrative penalty. In addition, principal employer can face legal and criminal liabilities if any work accident occurs in the workplace.
Since principal employer is jointly responsible with subcontractor for paying the salaries and insurance premiums of subcontracted employees, it is necessary for principle employer to follow whether the payments are regularly, correctly and fully made by subcontractor or not. So that the payment documents of salaries and the insurance premiums of the subcontracted employees must be submitted to employer every month by subcontractor. In the case of employer has to make these payments instead of subcontractor, principal employer must revoke these payments to Subcontractor.
In conclusion it is clearly seen from the above explanations Companies may only work with the subcontractors for the works are not included to their main work. If the Companies work with the subcontractors and employee the subcontractor's employees for their main work, they may face with high amount of administrative penalty and also they carry the risk of legal and criminal liabilities arising from unlawful acts of the subcontractors.
1. This fine is determined according to The Administrative Fine Tariff for 2018 regarding Turkish Labor Code numbered 4857.
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