Turkey: Evaluation Of The Amendment Of The Employees' Bonus Calculation Procedure

Working conditions infers to the workplace, department, title, wages and additional remunerations, the facilities provided at the workplace, the type and amount of work performed, the suitability of the work to the physical or mental well-being of the employee, the working environment, and accessibility to the workplace from home and so forth. Any change made in any of these is considered as a change in working conditions. According to Article 22 of Labour Law No. 4857 ("Labour Law"), which is titled as "Amendment of the working conditions and termination of the employment contract", the employer can make a substantial change in the working conditions arising from the employment contract or the personnel regulation as an attachment to the employment contract and similar resources or workplace practice, provided that the employee is notified in writing. Changes that are not made in conformity with this procedure and not accepted by the employee in written form within 6 working days shall not bind the employee.

In this context, any change that makes the employee's continuation of the contract unbearable and which negatively affects him/her is considered as a "substantial change". However, since there is no definition in the Labour Law on the concept of substantial change, the issue has been tried to be explained within the scope of the precedents of the Supreme Court of Appeals.

1. The Concept of Substantial Change

The right to manage gives the employer the authority to regulate the working conditions of the employee while considering the needs of the work and the workplace. However, it is stated that as a rule, if there is a need for change during the continuation of the employment contract which is not covered by the right to manage, such change can be made if the consent of the employee is acquired, and provided that it does not contradict the provisions of the law, the employment contract or the collective labour contract.

When the decisions of the Supreme Court of Appeals are examined, it is seen that the matter considered for the substantial change is "aggravating the situation of the employee", and "making amendments to the detriment of the employee when comparing the situations before and after the amendment". As can be seen in the decision of the Supreme Court of Appeals below, the amendment in the calculation procedure of the bonus, which is considered as an addition to the wages, is considered to be within the scope of an amendment made to the detriment of the employee in terms of their benefits and it is considered as a substantial change.

Decision of the 9th Civil Department of the Supreme Court of Appeals dated 18.06.2018 and numbered E.2015/20587 K.2018/13156: "Lowering the wage of an employee or taking away or reducing the social benefits given to an employee which are regarded as addition to the wage, is a substantial change in the working conditions. The employer cannot force the change the wage amount to the detriment of the employee, with only a unilateral notification. If the employee does not accept the written proposal for change within the specified period or remains silent during this period, the proposal for change in the conditions of work made by the employer is considered rejected and the change does not occur. In short, the employment relationship between the parties continues under the same conditions. The employee will always have the right to demand wage difference and other rights at any time provided that they can be demanded, if the employee does not accept the substantial change in the working conditions which occurs due to the reduction of wages and the elimination of the rights that are additional payments to the wage."

2. Proposal for Substantial Changes

An employer contemplating to make a substantial change in the employment contract must notify the employee in writing. If the employer accepts the proposal for change within 6 workdays, the substantial change will become effective and the employment relationship will continue in its amended form with the amended provisions, but the amendment in the working conditions shall not have a retrospective effect. In this context, the main problem occurs in case the employer's proposal for substantial changes is not accepted.

  1. In case the Employer's Proposal for Substantial Change is not Accepted
    1. Continuation of the Contract with Previous Conditions: If the employee does not accept the proposal for change within 6 workdays or if he/she remains silent within this period, the substantial change cannot occur. Therefore, the contract will continue with the previous conditions.
    2. Employer's Persistence on Change: If the employer has unilaterally reduced or taken away the employee's wage or bonuses despite the rejection of the proposal for substantial change, the employee may request that the wage difference or bonus to be paid together with the highest interest applied to the deposit, or he/she may refrain from working, or in accordance with Article 24/II/e of Labour Law, he/she may terminate his/her employment contract with a justified reason.

      In addition, if the employer neither terminates the employment contract upon the employee's rejection nor maintains the working conditions the same as previous, in other words, he acts like the implementation of the changes has been put into effect and forces the employee to work under these new conditions, then there's a possibility that the court shall consider this behaviour as an actual termination, and shall accept the demands of the employee in terms of re-employment and other labour receivables due to the employer's will to terminate.
    3. Termination of the Contract by the Employer Due to the Substantial Change (Amendment Termination): The employer has the right to terminate the employment contract in accordance with Article 22 of the Labour Law when the employer's proposal for substantial change is not accepted by the employee. It is stipulated in Article 22 of the Labour Law that "If the employee does not accept the offer for change within this period, the employer may terminate the employment contract by respecting the term of notice, provided that he/she indicates in written form that the proposed change is based on a valid reason or there is another valid reason for termination." Amendment termination is a termination in which a change in working conditions is proposed together with the notice of termination to the employee. With the amendment termination, the other party is forced to accept the proposal for substantial change. If the employee accepts, the contract continues with new conditions, and if the employee rejects, the contract shall be deemed to be terminated at the end of the notice period.

3. The Reservation of the Right to Make Substantial Changes

The employer may be authorized to make changes in working conditions within the employment agreement. In this case, it is assumed that "the written consent of the employee" stated in Article 22 of the Labour Law has been obtained in advance. Therefore, it shall be binding upon the employee as the change in working conditions is based on contractual authority. With the help of these provisions, it is possible to adapt the working conditions to the changing conditions in a fast and risk-free manner without the need of applying Article 22 of Labour Law and amendment termination.

The right to make substantial changes may be reserved in the form of provisions extending the right to manage, withdrawal provisions, non-binding provisions, provisions of fixed terms and conditions.

Decision of the 22th Civil Department of the Supreme Court of Appeals dated 12.06.2017 and numbered E. 2017/34981 K. 2017/13817: "It is deemed that the employer has the right to extended management, if there are stipulations within the employment contract that allow him/her to make changes in the working conditions when it's necessary. In this case, the employer is permanently entitled to make changes in the working conditions of the employee, provided that it does not abuse the right of management and complies with the contractual limits."

In such case, the employer shall have no obligation to pay to the employee any penalties arising from legal, criminal,  and administrative sanctions as well as any compensations arising from Article 26/II of the Labour Law, unless the employer abuses the right of management unlawfully, and the judge will not interfere in such actions of the employer.

Decision of the 9th Civil Department of the Supreme Court of Appeals dated 29.12.2009 and numbered E. 2008/12903 K. 2009/38129: "It is deemed that the employer has the right to extended management, if the parties agreed that the employer may make changes in the working conditions when it's necessary within the employment agreement. In this case, the employer is permanently entitled to make changes in the working conditions of the employee, provided that it does not abuse the right of management and complies with the contractual limits. For instance, the provisions of the agreement stating that the employee may be assigned to other workplaces of the employer if necessary, reserve the right of the employer to make changes in this respect. This right should be exercised objectively. The implementation of the contract provision in order to terminate the employment agreement of the employee is regarded as an abuse of the employer's right of management."

In another Supreme Court of Appeals decision, the following examples are provided as abuse regarding the change of the place where the employee works, which is regarded within the scope of the right to extended management of the employer:

Decision of the 9th Civil Department of the Supreme Court of Appeals dated 06.02.2006 and numbered E. 2006/835 K. 2006/2400: "It is understood that the defendant employer abused the authority of assignment provided within the contract, when considering the facts that the claimant, who has been working in the provincial borders for a long time, is assigned far from such place, that has not been opened yet and is not certain to be opened, and is replaced by new employees, and is not provided with a reason regarding the assignment."

CONCLUSION

Article 22 of the Labour Law aims to maintain the balance of interests of the employees who are weaker before the employer. According to the legislation, the employer can make the substantial changes in working conditions only by obtaining the written consent of the employee. However, the exception to this is when the employer has the right to extended management.

If there is no such provision in the employment contract which is signed by the current employees or will be signed by them, as aforementioned, in cases where the employer insists on the change even though the change is not accepted by the employee, the employee has the right to terminate the contract with justifiable reasons and demand the severance pay and other labour receivables; furthermore, if the court considers the employer's persistent behaviour as an act of termination, even basis for a re-employment lawsuit may occur.

In addition, if the change is not accepted by the employee, it can be accepted that the bonus for this period can be calculated and paid in the current way or the employer may terminate the employment contract based on a valid reason. However, we would like to remind that in this case, the employee can benefit from the provisions of re-employment and that he/she can be entitled to severance pay and other labour receivables and notice pay if the notice period is not complied with.

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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