Turkey: Executing & Terminating Employment Contracts In Turkey

Last Updated: 24 January 2008

By Burcin Barlas

ADMD Law Office, Istanbul TURKEY

Overview

As Turkey maintains economic stability and growth for almost five years, the confidence of the foreign investors raised and new direct investments are executed more often. In this context employee related issues are of consideration to foreign investors and significance of the Turkish Labor Code ('TLC') elevate accordingly. Therefore we would like to briefly inform foreign investors regarding the precautions that shall be thought over while hiring and firing employees in Turkey.

First of all contract types specified in TLC must be considered. There are mainly four types of employee contracts subject to their terms. The first determination is for work less and more than 30 days but for a short and designated term anyway (continuous, discontinuous) and the second determination is for limited and unlimited duration types of contracts which are based on the designation of work period specifically for projects etc. or no designation. Please note that regular employee arrangements in Turkey are generally considered to be contracts for unlimited duration (all types of office staff, directors, managers etc.).

Execution Of Employee Contracts

Execution of an employee contract (which is referred as a 'Service Contract' in Turkish law) is a simple task. For contracts that are for one year or more TLC states that the contract shall be in writing. The employer shall not postpone such execution of a contract more than two months after the initial commencement of the employee to work. Please also note that TLC allows for a maximum of two months of probationary period (test period) where the employee and/or the employer could terminate the relation without being subject to TLC's termination clauses below explained. Employment contracts are free of any documentary taxes and levies such as stamp duties.

It should be noted that the terms and conditions of employee contracts are only applicable to the extent where they are in compatible with the irrevocable rights of the employees stated in TLC. Therefore employers are advised to obtain legal assistance before executing employment contracts in order to understand the actual effects of such contacts to their organizations.

Termination Of Employment Contracts By Employers

Termination of employee contracts by employers could be classified under two main categories. The first is termination without just cause and the second is termination with just cause. Termination of an employee contract without just cause (or any specific fault on the employee) is naturally at the discretion of the employer. The automatic outcome of such termination is compensatory amounts. There are different types of payments to be made to the employees at immediate termination:

1) Notification Compensation: This is a compensatory amount paid to the employee at immediate termination if termination notice subject to the designation of the TLC is not provided earlier. Therefore if an employer wishes to terminate an employee immediately without any notice period, such employer shall pay to the employee the following amounts of salary to compensate for that period:

a. 2 weeks of pay for employees worked for less than 6 months;

b. 4 weeks of pay for employees worked for more than 6 months, less than 18 months;

c. 6 weeks of pay for employees worked for more than 18 months, less than 36 months;

d. 8 weeks of pay for employees worked for more than 36 months.

2) Severance Compensation: For any termination without just cause of the employees who worked for more than 1 year, the employer should pay this compensation to the employee.

EXAMPLE:

Severance (experience) of the worker 1 year 1 month 19 days

Last gross salary (monthly) 1.200 TRL (New Turkish Lira)

Bonus (2 salaries per year) 2.400/12 200 TRL

Fuel expense 480/1240 TRL

Food expense (monthly) 26 TRL

Total 1.466 TRL

Severance compensation for 1 year: 1.466 TRL

Severance compensation for 1 month: 1.466/12 = 123 TRL

Severance compensation for 19 days: 1.466/365*19 = 77 TRL

Total severance compensation: 1.666 TRL

Severance compensation will not be paid under the following circumstances: a) if the employee resigns or b) the employee and the employer execute an agreement for the mutual termination with and c) at the end of a limited duration contract.

3) Annual Leave Compensation: Please also note that, pursuant to Article 53 of TLC; employees, who have worked at least one year, shall be entitled to an annual paid leave. The periods for annual paid leaves are determined according to seniority of the employee. Nevertheless the period of annual paid leave granted to employees, may not be less than:

1 year to 5 years (including) 14 days

5 years to 15 years (excluding) 20 days

More than 15 years 26 days

If there is immediate termination without just cause the annual paid leaves that accrued but not used by the employee shall be paid for at termination.

4) Accrued Salary And Bonuses: Naturally if the employee is terminated without cause any accrued salary and bonus payments shall also be paid to the employee at termination.

5) Re-Appointment Compensation: Whether it is limited or unlimited employment contract, employers could terminate the contract immediately based on causes designated under Article 25 of TLC such as health problems, inconvenient behavior against moral code, forces majeure (any specific reason to prevent the employee from working for more than one week), if the employer is taken into custody or arrested and if the absenteeism exceeds the notification periods designated in TLC.

On the other hand some types of employers are obliged to depend on a just cause to terminate their employee contracts whatsoever. However these explanations below should not be confused with the immediate termination of employment contract with just cause above explained. It is explicit that there is no other cause to be sought to terminate the contract in the presence of the said reasons above.

In accordance with the Article 18 of TLC; the employers that employ more than 30 could not terminate the unlimited contracts of their employees with a seniority of 6 months without justified legal causes. Therefore termination notice shall be in writing and should depend on a legal ground. If such employees terminate their employees without just cause, in addition to the above stated compensation amounts, the employers will be subjected to a 'Re-appointment Compensation' which is awarded by the Courts to filing employees that are terminated. The amounts awarded for re-appointment could be over one year salary of the employee. However it should also be noted that re-appointment compensations are not awarded to 'employer representatives', who are employees acting on behalf of the employers such as general managers etc. and who are authorized to manage the workplace and to hire and terminate employees.

According to the Article 19 of TLC, employers are obliged to notify their employees with written notifications containing clear and definite justifications for their termination. In parallel with the principles of ILO (International Labor Organization), employers could not terminate an unlimited contract in the absence of a previous defensive statement obtained from the employee. It should be noted that the employers should also produce documentation to prove the justified termination grounds before the Courts.

In consideration of the above stated compensatory amounts, the employers should obtain legal counsel before executing or terminating employment contracts in Turkey. It should be noted that the labor laws in Turkey are not less controlling than the laws of France, if not more.

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
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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