Turkey: Labor Law Aspects Of Workplace Transfers

Last Updated: 16 November 2005
Article by Murat Karkin and Tan Benadam

The increasingly competitive market environment and changing demands of consumers and the public at large trigger more business transfers and reorganizations. Whether within the framework of a reorganization or a strategy to consolidate its market position, certain circumstances may lead to workplace transfers. This then raises legal problems. In this article we will review the transfer process from a labor law perspective, focusing on the severance pay and annual paid leave rights of employees of the transferred workplace.

The former Labor Code No. 1457 did not contain detailed provisions concerning the partial or full transfer of workplaces. Only some minor provisions regarding annual paid leave rights and severance pay were set forth under different articles (Article 14, 53) with respect to workplace transfers. The matter was tackled within the framework provided by the precedents of the Court of Appeals. However, following the introduction of the new Labor Code No. 4857 in 2003 (“New Labor Code”), explicit provisions are set forth in accordance with the Court of Appeals’ practice and harmonization with European Union legislation. Article 6 of the New Labor Code sets out the principles to be applied in workplace transfers.

The preamble of Article 6 of the New Labor Code states that the provisions regarding transfer of workplaces are enacted as part of the harmonization process with EU legislation, namely the European Council Directive 2001/23. Article 1(a) of the said Directive states that "the Directive shall apply to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger." Article 3 of the Directive concerning the transfer of the rights and obligations of the transferor employer to the transferee, (Article 3 - The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee) and Article 4 regarding transfers not constituting grounds for dismissal of the employment contract (Article 4 - The transfer of the undertaking, business or part of the undertaking or business shall not in itself constitute grounds for dismissal by the transferor or the transferee) have been translated almost identically and set forth under Article 6 of the New Labor Code.

Although Article 6 itself does not clearly define the scope of such transfers, according to the preamble, all workplace transfers (apart from those resulting from the death of a real person employer and transfer of the workplace under inheritance provisions) or part of a workplace to another employer as a result of a legal transaction, fall within the scope of the New Labor Code. On the other hand, similarly with definite and permanent transfers such as those resulting from a sale contract, transfer of a workplace or part of a workplace for a temporary and limited periods such as those resulting from lease contracts are within the scope of this Article.

In light of the EU regulations, Article 6 introduces significant provisions regarding the purpose of protecting employees’ rights upon transfer of a workplace. Under the circumstances set out under Article 6, upon transfer of a workplace in part or in whole, labor contracts of workers shall be transferred to the transferee together with all outstanding rights and liabilities. Furthermore, these labor contracts shall not be terminated, because as explicitly defined by Article 6, neither the parties of the transfer nor the employees can terminate the labor contract solely on the ground of the transfer. Moreover, the transferor and transferee are jointly liable for the rights and liabilities that arise from events dated prior to the date of transfer. However, such liability of the transferor is limited to two years following the transfer date.

As a result of the transfer of a workplace, employees’ rights, notice period compensation, overtime payments, social rights and especially severance pay and annual paid leave rights constitute a substantial liability, and hence should be correctly evaluated. Although labor contracts of workers shall be transferred to the transferee together with all outstanding liabilities and receivables, in light of the Court of Appeals’ precedents, only the transferor shall be liable for salaries, overtime payments and social rights accrued at its terms. Moreover, the transferee shall solely be liable for such payments accrued after the transfer.

Annual paid leave rights are also transferred to the transferee, since the labor contracts do not terminate by virtue of the transfer. In this regard, the annual paid leave rights shall not constitute a due receivable on the date of the transfer and hence shall be subject to the two-year liability. Therefore, following the two-year period only the new employer (i.e., the transferee) shall be liable for the annual paid leave rights of employees.

Although Article 6 refers to this issue considering the annual paid leave rights, severance pay is governed by a special provision. Article 14 of the former Labor Code is the only provision that has not been abolished and, thus, severance pay is still governed by Article 14 of the Former Code. Accordingly, upon the transfer of a workplace, as the labor contracts do not terminate, the transferor’s liability for severance pay shall not arise. However, both the transferor and the transferee shall be liable for severance pay accrued after the transfer. The transferor’s severance pay liability is limited to the term during which it had employed the relevant workers and based on the most recent wage level paid to them. This liability for severance pay is not limited to two years. Furthermore, as defined by Court of Appeals in its precedent, Article 14 is a mandatory provision. Therefore, the transferor and the transferee can neither make a contract contrary to this provision nor cease their liability thereunder.

In practice, in order to finance the expenses arising from the transfer, the transferee mostly demands the severance pay to be paid at the time of transfer. However, as the labor contracts do not terminate, technically it is not possible to either pay severance pay or circumvent severance pay liability. On the other hand, severance pay liability accrued until the transfer date may be calculated and a payment titled “severance payment” could be made. However, such payment shall not technically constitute a severance pay and when the employee’s contract is terminated in the future, severance pay shall be calculated starting from the employee’s commencement of employment. The payment made by the transferor under the title “severance pay” shall be deemed as an advance (partial) payment and deducted from the actual amount of severance pay to which the worker is entitled.

Should the employee’s labor contract be terminated after transfer and if the employee files a lawsuit to return to his/her job, then the sole addressee (defendant in possible lawsuit) shall be the transferee. As the labor contracts of workers would be transferred with all outstanding liabilities and receivables to the transferee, workers’ lawsuit for returning to their jobs can only be claimed from the new employer, i.e., the transferee.

In conclusion, it could be argued that when Article 6 of the Labor Code is considered with its preamble and the European Council Directive 2001/23, the workplace transfer issue is fully harmonized with the corresponding EU legislation. Thus, the lacuna in Turkish labor law concerning transfer of workplaces has been overcome. With a consistent approach to be adopted by the Court of Appeals, there will be sufficient precedent and as a result the employment relations will be better protected.

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”

Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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