Turkey: Differences Between Employer’s Right Of Termination On Just Grounds And Right Of Termination On Valid Grounds

1-IN GENERAL

Employer's right of immediate termination on just grounds is regulated under Article 25 of the Labour Code numbered 4857. The grounds giving rise to Employer's right of immediate termination are set forth under various headings under the referred provision. These are gathered under four main headings which are (i) reasons of health, (ii) cases contrary to morals and good faith and similar behaviour, (iii) compelling reasons and (iv) the absence of the employee exceeding a certain period as a result of his detention or arrest.

Whether the employment contract executed with the employee is of definite or indefinite duration does not have any significance in the exercise by the employer of its right of immediate termination on just grounds.

Employer's right of termination on valid grounds is regulated under Article 18 of the same Act. The referred grounds of termination are gathered under two main headings which are (i) capacity or conduct of the employee and (ii) the requirements of the establishment, workplace or the job.

2-RIGHT OF TERMINATION ON VALID GROUNDS

As mentioned hereinabove, the right of termination on valid grounds is gathered under two main headings under Article 18 of the Labour Code.

Grounds stemming from the  capacity or conduct of the employee:

The incapacity of the employee may be separated into the physical incapacity and professional incapacity of the employee. The illness, elderliness and retirement of the employee are regarded as physical incapacity of the employee whereas the professional incapacity of the employee is the failure of the employee in matter such as prompt decision-making and taking initiative. With respect to professional incapacity, the Supreme Court sought a lower level in the performance of the employee as compared to other employees carrying out the same job and the continuity thereof.

As per Article 19(2) of the Labour Code, the written defence of the employee must be taken prior to the termination of the employment contract on grounds of the capacity or conduct of the employee. The termination of the employment contract without the attainment of the written defence of the employee shall not be considered as a termination on valid grounds.

Grounds stemming from the requirements of the establishment, workplace or the job:

With respect to this valid ground, the concrete case is taken into consideration at each termination and whether the ground is valid or not is resolved. Nonetheless, in general practice, there are main criteria accepted by the Supreme Court.  When the employment contract of the employee is terminated on grounds of the requirements of the establishment, workplace and the job, termination should have been applied as the "last resort".

If it is possible for the employee to be employed at another position at the same workplace or at another workplace pertaining to the establishment and the agreement is terminated, termination shall not be accepted as termination on valid grounds.

In the termination of the employment contract of the employee on the referred valid ground, the employer should seek solutions and in the event that the solutions attempted do not produce any results, the termination of the employment contract of the employer should be applied as the last resort.

3-RIGHT OF TERMINATION ON JUST GROUNDS AND ITS DIFFERENCE FROM TERMINATION ON VALID GROUNDS

Concerning the termination on valid grounds, conduct of the employee which is not in the nature of those enumerated under Article 25 of the Labour Code giving rise to the right of immediate termination yet are contradictory to the employment contract of the employee.

Employer's right of immediate termination may be applied to all employees under the scope of the Labour Code whereas the right of termination on valid grounds can only be applied solely to employees under the scope of Job Security. Employees who work at workplaces employing 30 workers or above and who have a seniority of at least 6 months and who are not representatives of the employer come under the provisions of the job security of the employees.

In cases of termination on valid grounds, the employee carries out its work but performs it deficiently, poorly or in an insufficient manner. Conduct which provides a basis for valid grounds should not constitute a situation as serious as the conditions of just grounds set forth under Article 25 of the Labour Code.  The common point of termination on valid grounds arising from the conduct of the employee and termination on just grounds is that they are both based on fault. The difference is the gravity of fault.

In termination on just grounds, the existence of a ground which damages the relationship and which is at a degree that prevents the continuation of the employment contract in terms of the employer is required. On the other hand, in termination on valid grounds, the existence of a ground which is not as severe as valid grounds yet which renders the continuation of the employment contract impossible is necessitated.

When any of the grounds of termination on valid grounds comes up, the employer shall be entitled to terminate the employment contract without delay and shall not be obligated to pay severance pay to the employee.  Nevertheless, in cases of termination on valid grounds, the employment contract can be terminated under specific conditions as prescribed by law and the statutory termination periods shall be granted to the employee and payment in lieu of notice shall be effected and severance pay which the employee is entitled to shall be paid.

4-PERIOD OF EXERCISE OF THE RIGHT OF TERMINATION

The period of the exercise of the right of immediate termination is restricted to 6 working days in the dismissals by the employer within the scope of Article 25(2) of the Labour Code.

Employer's right of termination based on cases contrary to morals and good faith may not be used after 6 working days as of the discovery of the employer of such behaviour of the employer and in any case after one year as of the realization of such act. However, the one year period shall not be applicable if the employee obtains pecuniary advantages.

Despite the employer's right of dismissal without compensation and on just grounds, in case the statutory period is exceeded, the employer may no longer dismiss the employee without compensation and on just grounds but with compensation and on valid grounds. Pursuant to the discovery of the employer of the grounds giving rise to the termination of the employment contract of the employee on valid grounds; the employer should utilize such right of termination within a "reasonable period".

We would like to emphasize that the "reasonable period" has not been specified under the law and that the reasonable period criterion is examined on separately in each concrete case by the Supreme Court.

5-CONCLUSION

Both termination on just grounds and termination on valid grounds – the differences of which are explained hereinabove – enable the employer to terminate the employment contract executed with the employee. Termination on valid grounds does not involve grounds as severe as the grounds of termination on just grounds. Whilst the common point in termination on just grounds and valid grounds is fault, the gravity of the fault in termination on just grounds is higher than in termination on valid grounds. In case of termination on valid grounds, each concrete case has to be examined separately in order outline the boundaries thereof and hence the discretionary power of the judge becomes significant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.