Turkey: Filing Lawsuit For Restitution And The Status Of Workplaces Abroad While Calculating The Number Of 30 Employees

Last Updated: 3 October 2011
Article by Erdal Gökçe

I. What is the "labour security system"?

After the ILO (International Labour Organization) Convention numbered 158 in relation to the "termination of employment" of 1982 had been approved by Turkey with the law dated 09.06.1994 and numbered 3999, the modifications were needed to be made in order to harmonize the national legal provisions with the ILO convention. As a result of the said obligation, Turkey implemented the system of labour security by the law numbered 4773 on "Labour Security" and afterwards the Labour Code numbered 4857 that entered into force on 10.06.2003.

As other conventions by ILO, the Convention numbered 158 contains as well flexible provisions in order to enable member countries to regulate within their internal legal systems the necessary alterations and it offers the possibility to make a choice between various alternatives. The Turkish legislator, while regulating, largely benefited from the provisions of the Convention numbered 158.

Article 18 of the Labour Code numbered 4857 provides the scope of the labour security. According to that, the following conditions shall be met so that an employee working with an indefinite-term labour contract avails from labour security:

  1. The workplace where the employee works shall be employing at least 30 employees,
  2. The employee claiming the labour security shall have minimum 6 months of seniority,
  3. She/he shall not be an employee with the qualification of a representative or auxiliary of the employer administrating the entire business,
  4. She/he shall not be an employee with the qualification of a representative or auxiliary of the employer recruiting or dismissing employees.

II. Filing lawsuit for restitution

The employer seeking to terminate contract of an employee under the labour security shall rely on a valid ground stemming from the proficiency or conduct of that employee, or from the exigency of the business, the workplace or the work itself. The employee whose contract is terminated without providing valid reason or any reason by the employer, she/he is entitled to file a lawsuit for reemployment within 1 month

As a result of the enactment of the labour security system in 2003, an extraordinary increase of lawsuits for restitution before labour courts has been registered. However, this is not a right that is granted to all employees without any condition in order to file such lawsuit with the claim of invalidity of termination notification. One shall comply with the above-mentioned conditions. The case is not to be heard in case of non-compliance with the conditions.

III. Employing 30 or more workers at workplace

Taking into account the financial encumbrances brought on the employer by the labour security system, the legislator intended to leave small-sized business employing less than 30 people out of the scope. This matter gave rise to big discussions during the preparatory period of the law and finally the offered number of employees was regulated as 30.

According to the data of Social Security Board, approximately 70% of the insured employees are outside of the scope of labour security. In terms of workplace, it is indicated that the law is applied solely in 25.000 workplaces out of 723.000.

It is sufficient that the workplace employs 30 or more employees as of the termination date. Where the employer has several workplaces in the same line of business, the number of employees working in that workplace is to established pursuant to the total number of employees working in all those workplaces.

IV. Including those working at the workplaces within the same line of business of the employer

A company having its headquarter and branch offices in the US or in Europe might have established a liaison office in Turkey. In such case, thousands of people could be working the headquarter and branch offices abroad and only a few working in Turkey.

While calculating the number of 30 employees, the issue whether one shall take into account the number of employees working in the offices operating in the same line of business abroad is a question that needs to be solved. There is no concrete regulation in the Labour Code itself in this matter.

According to the opinion that grounds on the principle of territoriality, workplaces in foreign countries shall not be considered within the scope of the Labour Code. Moreover, it is uttered that there is no explicit regulation in law. From this point of view, it is claimed that the workplaces of the employer that are operating abroad shall not to be taken into account in the calculation of the 30 employee.

The matter was also discussed in labour courts and as a result, the Court of Appeals issued a verdict in 2006 pointing out that the employees working in workplaces abroad in the same line of business of the employer shall be also taken into consideration.

At the case subject to the said verdict, the employee used to work in the liaison office in Turkey of a company established in Germany and his labour contract was terminated by the employer. As per the grounds of the verdict, "(...) the workplaces owned by an employer having more than one workplace in the same line of business are to be considered as a whole. As mentioned in the preamble of the law, the fact that the workplaces within the scope of the labour security provisions are subject o the condition to employ a certain number of employees stems from the idea of protecting small-sized businesses. In the ILO Convention numbered 158, in cases where there are substantial issues in terms of the special employment conditions or of the size or qualification of the business employing the employee, although it is provided that one part of the employees could be excluded from the whole of labour security system or some of its provisions, it is meaningful that the legislator did not explicitly regulate that the employees working in the workplaces abroad in the same line of business would not be taken into consideration. In other words, there is no legal regulation as to the fact that the workplaces operating in the same line of business shall be exclusively considered within the borders of the country. Therefore, one ought to move in favour of the employee and taking into consideration of all the workplaces belonging to the defendant employer who is established to have other workplaces in the same line of business, and accept that the legal dispositions that are necessary in terms of the employee number are present."

It is noted that the Court of Appeals verdict is based on the interpretation in favour of employees. In this line, one may reach the conclusion that, in practice, the number of the employees working in workplaces abroad in the same line will be taken into account while determining the number of 30 employee.

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.

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