This legal assessment has been prepared to provide interested persons with brief information on termination of the labor contracts by employer and to clarify the rights of the parties in case of termination. To this respect, in accordance with the Turkish Labor Code, Code of Obligations, and other relevant applicable Laws of Turkey and judicial decisions, we hereby would like to inform you as follows;
B) REGULATIONS on the TERMINATION OF LABOR CONTRACTS
First of all, we would like to point out that Labor Code numbered 4857 is the main law which governs the employee and employer relations. Employment contracts are mainly terminated in accordance with this Code. In case of absence of a provision, the 6098 numbered Code of Obligations shall be applied.
Employment Contracts may be terminated either by employee or employer. The biggest risk arises for employers when employer wishes to terminate to contracts. Therefore, we will evaluate the termination of the contract by employer first and we will mention termination of the contracts by employee.
B.I. Termination of the Employment Contracts by Employer
According to Labor code numbered 4857, if there are more than 30 employees working under the employer and if the employee has been working in the company more than 6 months, employers does not have right to employment contract without a reason. In other words, the employer shall have a reason to terminate to contract. In the Labor Code it is stated that there are only two ways for the employers to terminate the employment contracts. One is termination of the contracts by showing a valid reason(article 18-19 of the Labor Code) and the other is rightful termination (Article 25 of the Labor Code).
We would like to explain the difference these two provisions; As it is mentioned above the employer needs reason to terminate the employment contract. These articles differ based on the aggravation of the termination reason.
I.Termination of the Contracts by Showing a Valid Reason (Article 18-19 of the Labor Code)
I.I. Before Termination
In accordance with the Article 18 of Labor Code; the employers that employ more than 30 could not terminate the unlimited contracts of their employees with a seniority of 6 months without valid reason. Therefore termination notice shall be in writing and should depend on a legal ground. There is no definition for valid reason neither in the article 18 nor in other articles of Labor code or relevant regulations. The definition of valid reason take shape from the Supreme court decisions.
- the worker's qualification
- the worker's behavior
- the necessities of the establishment, the workplace or the work
- et cetera can be considered by valid reason for termination of the employment contracts by employer.
Nevertheless, we need to point out that each case shall be evaluated separately and the Supreme court decisions shall be checked specifically for each case.
We would like to emphasize that according to article 19 of the Labor Code; before termination of contract employers shall request for defensive statement from the employees for their bad form. Even if the article does not state that the request for defensive statement shall be written, according to Supreme court decisions both the employer's request and employee's statement shall be written. Otherwise, the employers cannot prove that they requested for defensive statement. Furthermore, even if according to article 19 of the Labor Code it seems that requesting only one defensive statement is enough again according to Supreme court decision employers shall request for defensive statement at least two times. Supreme court rules that after the first defensive statement employer shall warn the employee by written notice. In the mentioned notice the employer shall state that the acts of the employee are not acceptable and if employee repeat his/her acts, his/her contract will be terminated. Again we would like to remind that these are the general explanations therefore each case shall be evaluated separately.
I.II. Termination Process
When employers decide to terminate the contract after all the procedure, The employee shall be notified by written notification which containing clear and definite justifications for termination.
In case of the termination based on the valid reason; according to Article 17 of the Labor Law, the employer is entitled to terminate an employment contract concluded for an indefinite period by observing the following minimum notification periods:
2 weeks prior notice if duration of employment is less than 6 months,
4 weeks prior notice if duration of employment is between 6 – 18 months,
6 weeks prior notice if duration of employment is between 18 months – 3 years,
8 weeks prior notice if duration of employment is more than 3 years.
If the employer does not obey this rule and terminate the contract immediately, such employer shall pay to the employee the above amounts of salary to compensate for notice period.
The other important point is that if the employment contract is terminated based on the valid reason the severance payment of the employee shall be paid to him/her.
I.III. Risks after Termination
Even if all the procedures have been completed by the employer, the employee has right to apply to court for reemployment by claiming that the reason was not valid for the termination. The burden of proof that the employment contract was terminated with a valid reasons lies with the employer. In this case the employers shall prove all their claims by written documents which is very difficult most of the cases. In case the employee wins the case;
- The employee applies within 10 days to employer for reemployment.
- The employer either call the employee within 1 month for reemployment or does not.
- If the employer calls the employee
within 1 month;
- 4 months' pay for the period spent without working + Social Security Payments
- If already paid, the worker shall reimburse the severance pay and pay in lieu of notice and if applicable, annual leave pay.
- If the employer does
not call the employee within 1 month
- 4 months' pay for the period spent without working + Social Security Payment
- Compensation amounting to 4-8 months' pay
- If not paid already, severance pay and pay in lieu of notice and if applicable, annual leave pay
II.Termination of the Contracts by Rightful Termination (Article 25 of the Labor Code)
The article 25 of the Turkish Labor Code regulates the rightful termination right of the employer. In case of rightful termination, the employer does not have to pay any kind of compensation to employee and can terminate the contract immediately.
According to article 25 the employer has a right to terminate the contract rightfully in following cases;
"The employer may terminate the contract, whether for a definite or indefinite period, before its expiry or without having to comply with the prescribed notice periods, in the following cases:
I. For reasons of health
a) If the employee has contracted a disease or suffered an injury owing to his own deliberate act, loose living or drunkenness, and as a result is absent for three successive days or for more than five working days in any month.
b) If the Health Committee has determined that the suffering is incurable and incompatible with the performance of the employee's duties. In cases of illness or accident which are not attributable to the employee's fault and which are due to reasons outside those set forth in (a) above and in cases of pregnancy or confinement, the employer is entitled to terminate the contract if recovery from the illness or injury continues for more than six weeks beyond the notice periods set forth in article 17. In cases of pregnancy or confinement, the period mentioned above shall begin at the end of the period stipulated in Article 74. No wages are to be paid for the period during which the employee fails to report to work due to the suspension of his (her) contract.
II. For immoral, dishonourable or malicious conduct or other similar behaviour
a) If, when the contract was concluded, the employee misled the employer by falsely claiming to possess qualifications or to satisfy requirements which constitute an essential feature of the contract, or by giving false information or making false statements;
b) If the employee is guilty of any speech or action constituting an offence against the honour or dignity of the employer or a member of his family, or levels groundless accusations against the employer in matters affecting the latter's honour or dignity;
c) If the employee sexually harasses another employee of the employer;
d) If the employee assaults or threatens the employer, a member of his family or a fellow employee, or if he violates the provisions of Article 84(prohibition on Alcohol and Narcotic);
e) If the employee commits a dishonest act against the employer, such as a breach of trust, theft or disclosure of the employer's trade secrets.;
f) If the employee commits an offence on the premises of the undertaking which is punishable with seven days' or more imprisonment without probation;
g) If, without the employer's permission or a good reason, the employee is absent from work for two consecutive days, or twice in one month on the working day following a rest day or on three working days in any month
h) If the employee refuses, after being warned, to perform his duties;
i) If either wilfully or through gross negligence the employee imperils safety or damages machinery, equipment or other articles or materials in his care, whether these are the employer's property or not, and the damage cannot be offset by his thirty days' pay.-
III. Force majeure:
Force majeure preventing the employee from performing his duties for more than one week.
IV. If due to the employee's being taken into custody or due to his arrest, his absence from work exceeds the notice period indicated in Article 17."
Please note that any of these circumstances arise, the contract of the employee shall be terminated within 6 working days after the employer become aware of the acts of the employee. We further would like to point out that even if the act of the employee is included in the scope of article 25 of the Turkish Labor Code(not all) but most of the cases the employer shall request a defensive statement form employee before termination. Therefore, the process shall be complete as soon as possible by taking into consideration the 6 working days deadline
II.II. Risks after Termination
Again, even if all the procedures have been completed by the employer, the employee has right to apply to court either for reemployment by claiming that the reason was not valid or rightful for the termination or request his/severance payment and notification compensation with interest. The burden of proof that the employment contract was terminated with a valid reasons lies with the employer.
As it can be clearly seen above mentioned explanations, Turkish Labor Courts always make their judgment on favor of Employee. Therefore, the employer shall make and keep all the warnings, notices etc. as written documents. Furthermore, as we have already mentioned each case shall be examined separately and whenever employer face with any problem with employees all the actions shall be taken with legal advisor.
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.