In a labour dispute, the Court of Appeal recently rendered a
judgment which is expected to receive heavy criticism from foreign
investors and international groups that have offices in Turkey.
Under Turkish Labour Law, termination of employment agreements
is subject to a special set of rules if the employer is employing
more than 30 employees. One of the most important consequences of
being subject to the said set of rules is that the employer would
not be able to terminate employment agreements in the absence of
valid grounds which is a very vague concept.
Until recently, the precedents of the Court of Appeal
consistently provided that legal entities established in Turkey are
deemed as persons independent from their other offices abroad. As
such, when determining the number of employees with a view to
establishing whether the special rules would apply, only the number
of the employees at the Turkish offices was taken into account.
However, in a recent precedent, the Court of Appeal implicitly
held that if the Turkish entity is a member of a group that has
offices in other countries, the cumulative number of all employees
employed around the globe should be taken into consideration.
The practical result of this precedent is that foreign investors
and international groups that have offices in Turkey must now be
very careful when laying off employees in Turkey and, as a
precaution, seek to comply with the special rules as much as
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