Turkey: Employment Relationships That Are Agreed Not To Last "Forever"

Under Turkish law, service relationships between employees and employers are governed under Turkish Labor Law numbered 4857 (the "Labor Law") and service agreement provisions of Turkish Code of Obligations numbered 6098 (the "TCO"). The Labor Law sets out different types of employment contracts, such as:

  • definite term – indefinite term employment contracts,
  • on-call-work agreements,
  • equip agreements,
  • part-time – full-time employment agreements.

There is no doubt that definite term and indefinite term employment contracts are the most preferred types, amongst others. In fact, the general principle is to employ an employee through an indefinite term contract. Parties can agree to be bound by the contract for a definite term only if there are exceptional cases. According to Article 11 of the Labor Law, only if objective particularities of the work undertaken in the agreement require (or justify) a time limitation can the parties execute a definite term employment contract. For instance, the Court of Appeals rules consistently rules that due to the nature of the work, project-based contracts and high-level executives' (such as general managers and CEOs) employment contracts can be executed for a definite term.

A definite term employment contract may only be renewed for another definite term if there is a reason justifying the extension. Otherwise, if at the end of the specified term, parties continue with the contractual relationship, the definite term employment contract would be transformed into an indefinite term employment contract. Yet, if the parties mutually agree not to continue with the contract, the contract will expire automatically at the end of its term without triggering any compensation liability on the employer. Nevertheless, if the employer notifies the employee that they do not prefer carrying on with the contractual relationship once it has expired, the employer will be obligated to pay severance pay to the employee.

There is no major difference between the provisions of an employment contract with a definite term and those of a contract with an indefinite term1. For instance, under both types, parties can agree on a probation period during which they can terminate the employment relationship without serving a prior notice or the employee can undertake not to compete with the employer for a certain time period following the expiry of the contractual relationship.

The main difference between these two types comes out in their termination methods and the statutory form required under the Labor Law. An indefinite term employment agreement can be executed either in written form or on a verbal basis, whereas Article 11 of the Labor Law requires a definite term employment contract to be in written form in order to be valid and binding upon parties.

As to the termination methods, both definite term and indefinite term employment contracts can be terminated with immediate effect by either party, if there exists one of the "just causes" set forth under Articles 24 and 25 of the Labor Law.

An indefinite term employment contract can be terminated by serving a prior notice, even when the terminating party lacks a just cause2. However, in a definite term employment relationship, if there is no just cause for termination, neither the employer nor the employee can terminate the contract before its expiration. If and when a party terminates a definite term employment contract without any just cause, the termination is deemed "unlawful" and the terminating party is obligated to indemnify the other party's pecuniary and non-pecuniary damages. In addition, there are a number of decisions of the Court of Appeals, which states that an employer, who terminates a definite term employment contract without just cause before its expiration, would be obligated to pay severance pay to the employee.

According to Article 438 of the TCO, if it is the employer who terminates the definite term employment contract without any just cause, the employer will be required to pay the amount that would have been paid to the employee, had the agreement not been terminated3. If the employer terminates the definite term employment contract unlawfully (without any just cause), the employee will not be entitled to request his/her re-employment. This is because the job security provisions, which are sought for entitlement to request re-employment, are not applicable to definite term employment relationships4. For the sake of protecting employees from sufferings, Article 438 of the TCO provides that, in a possible lawsuit to be initiated by the employee against the employer, the judge may order the payment of a discretionary compensation for unlawful termination, of an amount up to the employee's salary of six months.

There is a way out: Maximum Term Employment Contracts

For avoidance of such restrictions on termination, parties of employment relationships prefer executing employment contracts that are agreed to be continued until a specific date. In such contractual relationships, where there is no just cause, the parties can reserve their right to terminate the contract with notice until the contract automatically expires on the specified date. In practice, such employment contracts are referred to as "maximum term employment contracts".

Maximum term employment contracts are not governed under the Labor Law or the TCO. However, scholars opine that, just as in definite termed employment relationships, the objective particularities of the work in question must require (or justify) a time limitation in maximum term employment relationships. Scholars further opine that if the parties lack such reasoning to execute a maximum term employment contract, the employment relationship will be deemed an indefinite term one.

Maximum term employment contracts automatically terminate at the specified date, unless the parties agree to carry on with an indefinite term employment contract. In this event, the employer is not obligated to pay severance pay. However, if the employer intends to unilaterally terminate the contract before its expiration, it will be obligated to serve a prior notice on the employee, in accordance with the notice periods (or pay in advance all of the labor entitlements in lieu of the notice period) and pay severance pay.

Let's blend it up: Employment Contracts Under Which Parties Specify Both Minimum and Maximum Terms

Parties of an indefinite term employment contract can restrict their termination rights for a specific period of time, by way of an agreement. Such contracts are referred to as "minimum term employment contracts". During the specified minimum term, parties may only terminate the employment relationship if a just cause exists. Since restrictions on termination are in the employees' favor, the grounds sought for the validity of definite term employment contracts are not sought for minimum term employment contracts. During the minimum term specified by parties, the contract is treated as a definite term contract and if a party terminates the contract without a just cause, they will be obligated to indemnify the other party's pecuniary and non-pecuniary damages that we explained above. Once the minimum term specified by the parties is completed, the contract transforms into an indefinite term employment contract.

In practice, some employers prefer executing hybrid contracts, which specify both a minimum term and a maximum term. Most particularly in the employment contracts of start-up companies' high level executives, employers prefer stipulating a minimum term during which the parties are not allowed for termination in the absence of a just cause; and a maximum term, at the end of which the contract automatically terminates without triggering any compensation liability upon parties. In such hybrid contracts, once the minimum term is completed, parties will be free to terminate the contract by serving a prior notice in accordance with the notice periods.

In light of the foregoing, although parties' freedom of contract is restricted with the comprehensive regulations under the Labor Law and the TCO, this does not prevent parties from forming their contractual relationship in line with their needs and purposes.

1 The Labor Law prohibits employers from discriminating employers with definite term contracts from the others, in terms of the labor rights provided in the workplace.

2 If the terminating party lacks a just cause, they must serve a prior notice on the other party in compliance with the statutory (or contractual) notice periods. Unless the employment relationship in question is subject to job security provisions set forth under the Labor Law, parties are not obligated to present any reason for termination. For more information on termination by serving a prior notice, please refer to our E-bulletin of February 2014, Process for Employers' Termination of Employment Agreements
(Please see: http://www.kolcuoglu.av.tr/e_bulletin).

3 Although this is the general rule, in a possible lawsuit, the employer can request the deduction of:

  • the costs that would have been borne by the employee, had the employment relationship continued (e.g. fuel costs that would have been borne by the employee for his/her transportation to the workplace),
  • the income that the employee earned until the expiry date of the terminated employment contract, if the employee has found a new job,
  • the prospective income that the employee intentionally avoided until the expiry date of the terminated employment contract, in an attempt to prevent any reduction in the indemnification amount.

4 Re-employment can only be requested if the employment relationship in question is subject to job security provisions stipulated under the Labor Law. Job security provisions are applicable where:

  • there is an indefinite term employment relationship,
  • there are at least 30 employees working in the workplace,
  • length of the employment relationship exceeds six months,
  • the employee is not deemed to be an employer's representative.

© Kolcuoğlu Demirkan Attorneys at Law, 2014

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.

Pinar Bülent
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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.