Turkey: Collective Dismissal Of Employees And Points To Consider During This Process

Last Updated: 4 December 2018
Article by Deniz Senvar Pekin

Collective dismissal is regulated under Article 29 of the Labor Code, which specifies the procedures that employers should follow in case they plan terminating employees due to reasons of an economic, technological, structural or similar nature necessitated by the requirements of the enterprise, the establishment or activity.

There are two important criteria to apply for collective dismissal based on (1) number of employees being terminated and (2) time period when the terminations are effectuated.

  • Criteria regarding the number of employees

As per Article 29 of the Law Code, a collective dismissal occurs when,

 a) a minimum of 10 employees are terminated in a workplace where between 20 and 100 employees are employed,

 b) a minimum of 10 percent of employees are terminated in a workplace where between 101 and 300 employees are employed, or

 c) a minimum of 30 employees are terminated in a workplace where 301 and more employees are employed

in accordance with Article 17 of the Labor Code on the same date or at different dates within a one-month period.

Accordingly, the employer should, paying attention to the date it will terminate the employee, consider whether there will be other employees to be terminated on the same date or on different dates but within a period of one month in accordance with Article 17 and should also look to the total number of employees to be terminated to assess the applicability of collective dismissal provisions.

If seasonal and campaign work terminations are carried out in conjunction with the nature of such work, provisions of collective dismissals shall not apply as clearly set out in Article 29/7 of the Labor Code, and these employees shall not be considered within the number of workers.

The provision refers to "x number of employees employed in at a workplace". Thus, only those employees working at the relevant workplace where a collective dismissal is/will be applied should be counted; in other words, not all employees of the same employer or enterprise must be taken into account when applying the test in Article 29.

  • Calculation of the one-month period:

In order for a dismissal to be regarded as collective, it should be realized within a one-month period and the total number of employees being terminated should correspond to the abovementioned numbers. The one-month period shall begin as of the day the first employee/s is/are dismissed. It is not important if employees are dismissed on the same day or on different or consecutive days.

Example: A workplace that has 50 employees dismisses 8 employees in total, of which 4 employees are terminated on October 5th and other 4 on October 22nd in accordance with Article 29 of the Labor Code. At this workplace, since the number of terminated employees is under 10, this shall not be considered as a collective dismissal and the provisions thereof shall not be applicable.

Example: A workplace that has 100 employees dismisses 15 employees in total; of which 5 employees are dismissed on October 20th; 4 on October 26th and 6 employees on November 7th in accordance with Article 29 of the Labor Code. Since 15 employees are terminated within 30 days as of the first date of termination, this shall be considered as a collective dismissal and the provisions thereof shall be applicable.

  • Procedures and notification requirements

When an employer intends to dismiss employees due to reasons of an economic, technological, structural or similar nature necessitated by the requirements of its enterprise, its workplace or its business;

  • It must provide the union, the relevant regional directorate of labor and the Public Employment Office with written information at least 30 days prior to the intended dismissal.
  • The said written communication must include the reason for the contemplated dismissal, the number, and groups to be affected by this dismissal as well as the length of time the procedure of terminations is likely to take place.
  • Informative and consultative meetings with union representatives shall take place and at the end, a document showing that the said consultations have been held shall be prepared.

The dismissals to be carried out following the notices of termination and the meetings shall take effect 30 days after the regional directorate of labor is notified concerning the intended terminations. Accordingly, the notice periods set forth in Article 17 of the Labor Code shall begin after the said 30-day period. The employer may choose to make payments in lieu of the employees' notice pays in advance and effectuate their terminations with immediate effect. If the employer chooses to pay in lieu of the notice pays without waiting for the 30-day period, the termination shall have effect at the end of the 30-day period.

- In the event of closure of the entire establishment and permanent termination of activities, the employer shall notify, at least 30 days prior to the intended closure, only the regional directorate of labor and the Public Employment Office and shall post the relevant announcement at the workplace.

- The same legal provision also regulates that within 6 months after the finalization of collective dismissal, if the employer needs to hire employees for the same type of work, it must prefer the ones that qualify among those it has dismissed previously.

  • Sanctions for violation of the provisions on collective dismissals: 

In case the employer violates the obligations of the provisions of Article 29, he/she shall be liable to an administrative fine of TRY 693 for each employee thus terminated, as per Article 100 of the Law Code.

  • Employees' right to file lawsuits:

It is clearly stated in the Law that the employer shall not apply the provisions on collective dismissal to evade and prevent the application of Articles 18, 19, 20 and 21 of Labor Code. Otherwise, the employees may have the right to file re-employment lawsuit pursuant to the job security provisions.

Therefore, the general assumption in the practice to the contrary is incorrect. The employees may file reemployment lawsuits even after a collective dismissal. They shall still have the right to initiate reemployment lawsuits on the grounds that no valid cause was provided for the termination of their employment contract, in accordance with Article 20 of the Law Code.

Accordingly, a corporate decision regarding the business and business-related reason for dismissals should be taken and applied for collective dismissals, similar to terminations made under Article 18 of the Law Code. It is also important to note that, when a corporate decision for dismissals is taken by the employer due to an economic crisis and a collective dismissal is executed, the court would scrutinize if the company is affected by the said crisis and whether the crisis is sector-specific, nationwide or global.  It would further examine all kinds of information available, including but not limited to the company's balance sheets and records.

Although the courts would not inspect or audit the content of these decisions, they would investigate whether there was a surplus of employees or not, whether a core team determined or not, whether the decisions taken is in contradiction with other actions or decisions of the employer and whether the termination was, in fact, inevitable or not.

The employees will have the right to claim their termination-related receivables such as severance pay, notice pay and/or overtime pay, premium pay if not paid or partially paid, along with the reemployment lawsuit.

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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