Turkey: Transfer of Employment Agreements in Privatization

Last Updated: 15 March 2011
Article by İrem Bulut

A public enterprise shall be transferred with all its assets, including the establishment itself and its employment matters such as employees and their employment agreements under Turkish law. In other words, during the privatization process, an enterprise shall entirely be transferred to a private organization.

In this article, first of all, transfer of employment agreements when privatization is not an issue is explained, and then the transfer due to the privatization is examined.

Transfer of Employment Agreements According to the Turkish Labor Law

According to Article 6 of the Turkish Labor Law, dated May 22, 2003 and numbered 4857 ("Law No. 4857"), it is possible to transfer an enterprise in whole or part to another employer with its assets including the employment matters. Workplace transfer is a transaction that changes the employer of the employees who are working in the relevant workplace. The transfer of an employment agreement is not specifically regulated under the Law No. 4857. Provisions of Article 6 of the Law No. 4857 shall be applicable on the transfer of the employment agreements in accordance with Turkish Supreme Court precedents and Turkish labor law practices.

In case of a workplace transfer; the employment agreements shall not be terminated on the date of the transfer, but they will be transferred to the transferee employer with all rights and obligations involved. That is to say that the rights and obligations of the transferor employer, arising from the aforesaid employment agreements will be transferred to the transferee employer under the same terms and conditions as of the transfer date. The consequences of the transfer shall be as follows: (i) As of the date of transfer, the transferee employer shall be liable to the rights and obligations arising from the transferred employment agreement. (ii) In order to calculate severance and/or notice payments which shall be paid by the transferee employer, the service term of the transferred employee must be calculated starting from the date which the employee started to work with the transferor employer. In terms of severance pay, the transferor and the transferee employers are jointly and severally liable towards the transferred employees. Moreover, in case the transferee employer makes the entire severance payment, s/he has a right of recourse to the transferor employer for his/her part. (iii) Transfer of workplace (or one of its sections) on its own, cannot be counted as a just cause for termination. Therefore, workplace transfer will not give both parties -the transferee employer and the transferred employee- the right to terminate the employment agreement with a just cause unilaterally merely due to workplace transfer. (iv) The transferor employer and the transferee employer have a joint liability regarding the obligations arising from the employment agreement for a period of two years after the transfer date.

Additionally, transfer of an employment agreement shall be subject to the approval of the prospective transferred employee. In this respect, transfer of employment agreement executed without the approval of the employee will not be binding on behalf of the employee. Employment agreement shall be transferred by executing an agreement between all the parties: the Transferor, the Transferee and the employee/s concerned.

Transfer of Employment Agreements during the Privatization Process

Transfer of employment agreements during the privatization process is regulated under Article 22 of the "Law Concerning Arrangements for the Implementation of Privatization and Amending Certain Laws and Statutory Decrees" dated November 24, 1994 and numbered 4046 ("Law No. 4046"). This Article specifically regulates the transfer of employees from a privatized public enterprise to other public enterprises.

According to the mentioned article, employees in the public enterprises that are subject to the "Law numbered 657 on Public Servants" or the employees who work under the employment agreements as subject to the Law No. 4857 –but do not benefit from the collective employment agreement's provisions- shall be notified by the administration to the State Personnel Administration in fifteen days:

  • In case employment surplus is determined -by the relevant enterprise or by the administration- in the public enterprise which is in the privatization program, or,
  • In case of an enterprise loses its public entity identity, or whose activities are ceased, or closed or liquidate or in case of a transfer, or down-sizing.

Employees, who have the right to be transferred, and accepted to be transferred to the positions which was offered by the administration and employees who are transferred while the public enterprise is in privatization process cannot benefit from the above-mentioned transfer right.

The administration is entitled to cancel the positions which are vacant or change the place or the positions in the same enterprise during the privatization process.

Any employee of any enterprise may be assigned to any enterprise which is in the privatization program by the administration

Within 45 days following the notification to State Personnel Administration the relevant employee, upon the proposal of Administration, shall be transferred to those appropriate positions in keeping with their status vacant in the public enterprises. Concerning the commencement date of employment of these employees who have been appointed and procedures to be taken in instances of failure of commencement work, provisions of Articles 62 and 63 of "Law No. 657 on Public Servants" shall be applied. In case no appropriate vacant position in line with their status exists in organizations subject to the "Statutory Decree No. 190 on General Posts and Employment Procedures" ("Decree No. 190"), Council of Ministers is authorized to change the class, title and degree of the existing posts.

In case of transfer or sale of the enterprise, appointment of the employees who are working in such enterprises and are subjected to transfer shall be concluded as above. Then the appointment shall be notified to the employees.

The administration which is entitled to appoint, will be responsible for the application of Articles 62 and 63 of "Law No. 657 on Public Officers" and in the event of the employee rejects to start to work.

The enterprises will notify the State Personnel Administration on results of appointments and inaugurations within fifteen days. The employee who starts to work in his/her new enterprise may demand to be appointed to the same position that he/she was in his/her previous enterprise if the same position is vacant and the demand is complying with the regulations.

The posts and positions to become vacant due to transfers to other public organizations and institutions pursuant to Article 22 of the Law No. 4046, shall be deemed to have been canceled as of the vacancy date. Salaries, social rights and fringe benefits together with any and all kinds of personal rights of the employee appointed to other public enterprises and/or institutions, accruing during the period from the date of their appointments as stipulated in paragraphs (a) and (b) of the Article and the date of the severance of their relations with their former enterprises, shall be paid from the Privatization Fund, and those who are enrolled in the Turkish Pension Fund shall continue to remain under the Fund during this period.

If the present salary, including any kinds of payment such as; wage, bonus, raise, compensation etc. of such employee as of the notification date to the State Personnel Administration, is more than the total of salary to be accrued at the transferred enterprise, then, the difference shall be paid in the form of a compensation free from all deductions until the difference is eliminated.

In case an employee is transferred to another enterprise or a change in his/her title or position occurs upon his/her request, such compensation regarding the difference between his/her previous and recent salaries will not be paid.

Responsibility of the Enterprises Which Were Included in the Privatization Program

Employees who work in organizations which were included in the privatization program under Law No. 4046 (excluding their subsidiaries) pursuant to an employment agreement and whose agreements are terminated due to restructuring for privatization, privatization, down-sizing, cessation of activities in full or in part, permanent or temporary closing or liquidation of such organizations and which are entitled to redundancy payments in accordance with relevant labor laws and their current collective bargaining agreements, will be paid a special job loss compensation under the Law No 4046 in addition to, and not in place of, the redundancy payment envisaged by laws and in their current collective bargaining agreement. Furthermore, these employees will be given priority in services for finding new employment opportunities with the support and financing of the Privatization Fund.

All transactions with respect to special job loss compensation and other services will be carried out by and under the direction and responsibility of the Turkish Employment Authority.

Employees who work in organizations which are included in the privatization program under Law No. 4046 and who are subject to relevant labor laws and whose contracts are terminated during restructuring for privatization, privatization, down-sizing, cessation of activities, closing or liquidation of the organizations by their employer without a just cause, or are terminated by the employees with a just cause within one year following the date when public shares in their capital falls below 50 %, or, for organizations not converted to joint-stock companies following their date of transfer and delivery, are entitled to the redundancy payments and other services foreseen by the Law No. 4046.

Privatization proceeds collected in the Privatization Fund for the purpose of the special job loss compensation and other services mentioned in the Law No. 4046 shall first be applied to meet special job loss compensation payments.


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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions