The 27th Civil Chamber of the Istanbul Regional Court of Justice, the Istanbul 10th Labor Court, and the Ankara 11th Labor Court applied to the Constitutional Court for the annulment of the first and second paragraphs of Article 27 of Law No. 5817 on the Act on Private International Law and International Civil Procedure ("Private International Law") citing their unconstitutionality. The Constitutional Court has combined the applications and evaluated them under file number 2023/158 E.
The relevant legal provision of the article is as follows:
Contracts of Employment – Article 27
(1) The employment contracts are subject to the law chosen by the parties, as long as the provisions that foresee the minimal protection due to statutory provisions of his/her habitual workplace law are reserved.
(2) In cases where the parties have not made a choice of law, the law of the habitual workplace of the employee shall govern the employment contract. In case the employee is temporarily working abroad, this workplace will not be deemed as the habitual workplace.
(3) In cases where the employee is working regularly in several countries without working habitually in one country, the employment contract is subject to the law of country where the main workplace of the employer is located.
(4) In consideration of all circumstances, if there is a law more closely related to the contract, instead of the provisions in second and third paragraphs, that particular law shall apply.
Grounds for the Constitutional Court application
The grounds for the application to the Constitutional Court are as follows:
- Application of the law of the habitual workplace in disputes regarding the employee's receivables at the employer's overseas workplaces results in the deprivation of the employee's constitutional rights,
- Turkish employees employed at the foreign workplaces of companies registered in Türkiye are unable to benefit from the rights granted to employees working at the company's Turkish workplaces due to the application of foreign laws, and this contradicts the principle of equality,
- Employee's rights cannot be effectively implemented if they are subject to the rules of the habitual workplace or the law chosen by the parties, rather than the law that is more closely related to the employee,
- The state is obligated to implement protective measures to safeguard the rights of employees working under employment contracts with a foreign element,
- The law most closely related to the contract should protect the employee's rights and the choice of law should not circumvent these protective provisions.
Constitutional Court's Evaluation of Article 27/1:
The Constitutional Court's evaluations of the first paragraph are summarized as follows:
- The Constitutional Court noted that the choice of law in employment contracts is within the discretion of the legislature; however, this discretion must not conflict with the state's positive obligations to protect employees.
- The Constitutional Court stated that if the choice of law in employment contracts is permitted, there must be regulations in place to prevent outcomes detrimental to the employees.
- While the existing rule designates the habitual workplace law as the minimum standard of protection, the employment contract can be governed by a law more closely related to the employee, rather than the habitual workplace law. However, when the parties have chosen a law, this provision does not allow the application of the law most closely related to the employment contract.
- If the more closely related law provides higher levels of protection to the employee, there should be measures taken to prevent the employee from being deprived of this protection through the choice of law.
- The Constitutional Court concluded that if no choice of law is made in the employment contract, the more closely related law could be applied; whereas if there is a choice of law in the contract, the more closely related law cannot be applied, leading to a situation where the employee may be deprived of certain protections, which could be detrimental to the employee.
Accordingly, the Constitutional Court determined that Article 27, paragraph 1 of the Private International Law, which stipulates that employment contracts containing a foreign element shall be governed by the law chosen by the parties while ensuring minimum protection under the mandatory provisions of the habitual workplace law, presents a risk of employees being subject to less protective regulations due to chosen law and thereby deprives employees of their constitutional rights.
The Constitutional Court ruled that paragraph 1 of Article 27 of the Private International Law contradicts Article 49 of the Constitution, on the grounds that it may conflict with the state's positive obligations to protect employees. Consequently, the Court annulled the provision with its decision dated 5 November 2024, numbered 2023/158 E., 2024/187 K ("Constitutional Court Annulment Decision").1
Constitutional Court's Evaluation of Article 27/2
The Constitutional Court also evaluated Article 27, paragraph 2 of the Private International Law. This provision governs the applicable law in the absence of a choice of law in employment contracts with a foreign element, stipulating that if the parties do not choose the law, the employment contract shall be governed by the law of the habitual workplace. After examining the provision, the Constitutional Court concluded that this provision ensures that employees are subject to the law of the habitual workplace and does not prevent the judge from applying a legal system that offers higher protection standards within the scope of judicial discretion. For these reasons, the Constitutional Court ruled that Article 27, paragraph 2 of the Private International Law does not contradict Article 49 of the Constitution, which mandates the state's duty to protect employees' rights, and thus, it is not unconstitutional.
Evaluation
As a result, the provision in Article 27/1 of the Private International Law, which states, "The employment contracts are subject to law chosen by the parties as long as the provisions which foresee the minimal protection due to statutory provisions of his/her habitual workplace law are reserved," has been annulled.
This annulment raises significant questions, such as whether it may lead to a broader weakening of employee protections or create a more legally uncertain framework for employees. Notably, in cases where the parties have chosen a governing law, the annulment of article 27/1 removes the safeguard ensuring that the mandatory provisions of the habitual workplace law provide minimum protection; consequently, this may pose a risk of employees being fully subject to the mandatory provisions of the chosen law, which could be less protective than those of the habitual workplace law. This could hinder efforts to ensure employee protection and effectively safeguard employment rights.
To prevent a legal vacuum, the Constitutional Court Annulment Decision will come into effect six (6) months after its publication in the Official Gazette, meaning it will be enforceable as of 10 September 2025.
Footnote
1. Published in the Official Gazette dated 10 March 2025 and numbered 32837.
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