1.1 Main Changes in the Past Year
In the last 12 months, certain regulations/decisions have been adopted to reduce the impact of the COVID-19 pandemic upon employees and employers. These are:
- temporary termination ban;
- right of the employer to place employees on unpaid leave;
- short-term working allowance; and
- remote working regulation.
The details of these regulations/decisions are explained in 1.2 COVID-19 Crisis.
1.2 COVID-19 Crisis
1. Termination Ban
With the Provisional Article 10 of the Labour Law numbered 4857, which entered into force on 17 April 2020, restrictions were imposed on employers' right of termination. Accordingly, termination of employment contracts by the employer was prohibited except in the case of an employee having acted against goodwill and ethical principles (misconduct). This restriction was initially brought in until 30 June 2020, and was later extended gradually by the decisions of the President and continued until 30 June 2021.
2. Right to Place Employees on Unpaid Leave
Employers were granted the right to unilaterally place employees on unpaid leave. The term of this right was extended in parallel with the termination prohibition and ended on 30 June 2021. During these periods limited wage support was provided by the government to those employees who were unilaterally placed on unpaid leave by their employer.
3. Short-term Working Allowance
Recent changes made to the Unemployment Security Law numbered 4447 gave employers the right to apply for short-term wage support from the government to fight the economic effects of the coronavirus pandemic.
Employers benefiting from short-term wage support working were not obliged to pay wages for the periods when their employees were not working. 60% of the employees' gross wage for those periods was paid by the Turkish Employment Agency. The short-term wage support was also terminated on 30 June 2021.
In addition to these measures, incentives regarding social security premiums and tax payments were increased in order for employers to increase employment.
Permanent Measures: Remote Working Regulation
The remote working model entered into Turkish legislation in 2016 with the amendment to Article 14 of the Labour Law. Remote working is defined as an employment relationship in which an employee performs work at home or outside of the workplace using technological means of communication, within a framework created by the employer. The amendment stated that the details, procedures and principles of the remote working model would be governed by a regulation.
Accordingly, the Remote Working Regulation numbered 38393 ("Remote Working Regulation") was published and entered into force on 10 March 2021. The Remote Working Regulation echoes the principles set forth in Article 14 of the Labour Law from five years ago but goes beyond that by defining the details, procedures and processes for remote working. The Remote Working Regulation also obliges employees to take some procedural, preventative and principle-based measures before entering into a remote working agreement. Whether starting a new employment relationship for remote working or converting an office-based relationship to a remote working one, employees and employers should comply with the Remote Working Regulation.
2. TERMS OF EMPLOYMENT
2.1 Status of Employee
In the Turkish labour law legislation, no legal distinction is made between "blue-collar" and "white-collar" employees. Both types are regulated by the same general employment regulations. One exception to this principle is that senior managers, who are considered employer's representatives, cannot request overtime wages or benefit from employment security (right to reinstatement). The regulations set out the minimum standards of employment, and they can be increased by individual employment contract or collective labour agreements.
2.2 Contractual Relationship
According to the Labour Law, employment contracts must generally be established for an indefinite period. However, contracts may be established for a limited period of time if some objective conditions are fulfilled. Definite-term employment contracts are effective for a duration stipulated therein and terminate without notice. In line with labour law principles, definite-term employment contracts must be in written form. Moreover, according to Article 12 of the Labour Law, no distinction can be made between employees working on fixed-term and those on indefinite-term employment contracts, merely because an employment contract is a temporary one. This regulation is a requirement of the equal treatment principle which prevails in Turkish law.
In a definite-term employment contract, the term may be decided explicitly or implicitly. Definite-term employment contracts must extend until the completion of a certain job or the occurrence of a certain event. The general principle is that definite-term employment contracts should be made for a single length of time, if not precluded by other exceptions in the law. Renewing a fixed-term employment contract will result in changing the contract status to an indefinite term, according to Supreme Court decisions. This will result in notice-period requirements in the event that any party wishes to terminate the contract.
As a rule, in Turkish law, the agreement of the parties is sufficient for the establishment of an employment contract, and it is not required to be in writing. However, there is a written-form requirement for some employment contract types, which are as follows:
- definite-term employment contracts;
- employment contracts made with employees subject to the Maritime Labour Law numbered 854 ("Maritime Labour Law") (Maritime Labour Law applies to seafarers working on ships flying the Turkish flag and having a gross tonnage of 100 tons or more);
- employment contracts with employees subject to the Press Labour Law numbered 5953 ("Press Labour Law") (Press Labour Law applies to employees working in an intellectual or artistic capacity in newspapers and magazines published in Turkey, as well as in photography and news agencies);
- on-call employment contracts;
- remote working contracts; and
- team contracts.
2.3 Working Hours
So long as the requirements imposed by the provisions of the Labour Law are not infringed, an employment contract can be drawn up in accordance with the needs of the parties.
According to the Labour Law:
- weekly working time may not exceed 45 hours;
- daily working time may not exceed 11 hours; and
- night working time may not exceed 7.5 hours.
If the working time exceeds these periods, the excess is considered as overtime, and the hourly wage of the overtime period will be paid in the amount of at least 50% more than the normal hourly wage. If the employee accepts, this period can also be used as a resting time instead of payment. Working hours can be determined by the employer within the scope of the management right, provided that the employee is granted at least 24 hours of uninterrupted right to rest per week.
Employees who are pregnant or need to breastfeed, employees under the age of 18, employees working in underground mining works and employees whose health condition is determined to be unsuitable for overtime work cannot be asked to work overtime.
In order for an employee to work overtime, written approval must be obtained from the employee. The employee can withdraw this consent at any time. However, the employee's withdrawal of consent will not be effective until 30 days after the employer's notification in this regard.
It is not possible for an employee to work more than 270 hours in a year. Even if the employee has approved overtime work and the overtime wage is paid, the employee may terminate the contract with just cause in case of overtime work exceeding this period.
Types of Contracts According to Working Time
Employment contracts can be established on a full-time or part-time basis. Working at a rate of two-thirds or less of the working hours in a full-time employment contract is a part-time employment contract. Accordingly, the contract of an employee who works for 30 hours a week or less in a workplace where a 45-hour working week is applied is a part-time employment contract. An employee working on a part-time employment contract cannot be treated differently from a full-time employee unless there is a reason justifying the discrimination.
The minimum wage is regulated in the Labour Law and the Minimum Wage Regulation numbered 5454.
According to Article 39 of the Labour Law, there is a minimum wage limit for all employees working with an employment contract. This amount is determined by the Turkish Ministry of Labour and Social Security. While the gross minimum monthly wage was TRY2,943 for 2020, this amount was determined as TRY3,577 in 2021, which is the minimum wage valid for all business lines. The parties are free to agree on a wage above this amount, but no wage can be agreed below it.
There are no obligations imposed on employers such as the paying of bonuses or premiums, other than the minimum wage limit.
Unless specified in the contract (provided that the minimum wage does not exceed the wage of the employee), employers are not obliged to increase wages. However, in some Supreme Court decisions, it has been stated that an employee whose salary has not increased for a long time has a justified reason for leaving his or her job on the grounds that his or her purchasing power has decreased.
Apart from this, another intervention of the state is related to the maximum limit of severance (seniority) pay. Severance pay is calculated by considering the amount of one month's gross wage and additional benefits for each year worked by the employee. No matter how much the wage of the employee is, severance pay cannot exceed a certain threshold determined by government. While this amount was TRY7,638.96 for the first six months of 2021, it was determined as TRY8,284.51 for the last six months.
2.5 Other Terms of Employment
Paid Annual Leave
Paid annual leave rights are regulated in Article 53 of the Labour Law as below:
- no paid annual leave is regulated for under one year of employment by the same employer;
- 14 days for between one and five years of employment by the same employer;
- 20 days for between five and 15 years of employment by the same employer; and
- 26 days for 15 or more years of employment by the same employer.
The above-mentioned periods of leave are minimums, meaning that the parties may increase these periods by mutual agreement.
The paid annual leave periods of employees subject to the Maritime Labour Law or Press Labour Law are different.
Paid annual leave is a constitutional right and it is not possible to waive this right even with the consent of the employee. Even if the employer pays the employee's wage upon his or her consent, it is not considered valid.
Apart from paid annual leave, another leave envisaged in the Labour Law is the weekend holiday. Employees must be given at least 24 hours of uninterrupted right to rest in a week. If the employee has worked on other days, he or she is also entitled to this day's wage even though he or she does not work during the weekend. The parties may agree to increase the duration of the weekend.
National Holiday and General Vacation
In Turkish law, a total of 15.5 days on different dates within a year are considered national holidays and general vacation.
In case of any illness, an employee can rest on condition that he or she takes sick leave and provides evidence (a report from a doctor) regarding the illness.
A pregnant employee is entitled to apply for a total of 16 weeks of maternity leave, in general comprising eight weeks before the birth and eight weeks after the birth.
Female employees are also given a total of one and a half hours of milk leave per day to breastfeed their children under the age of one. The employee determines between which hours and in how many divisions this time will be used.
A male employee whose wife gives birth is given five days of paid leave.
Other Reasons for Leave
An employee who gets married or adopts a child, and employees whose mother or father, sibling, spouse or child has died, are given three days of paid leave. Apart from this, one of the parents is allowed up to ten days in one year for the treatment of a child with at least 75% disability or chronic disease.
Loyalty Obligation and Confidentiality
One of the basic principles of an employment contract is the loyalty obligation of the employee towards the employer. The simplest form of the obligation of loyalty refers to the protection of the employer's economic interests and the avoidance by the employee of actions that will cause the employer harm. Employees' obligations concerning confidentiality, protection of commercial secrets, personal data and non-disparagement can be considered within the scope of this loyalty obligation. Penalty clauses can be set forth in employment agreements regarding this issue. In addition, in mutual termination agreements, parties can agree that the employee will be obliged to not to harm and/or defame the employer after the termination. However, clauses stating that the employee cannot sue or defend himself or herself before the court for legitimate reasons, for example regarding a right arising from the contractual relationship with the employer, are exceptions to this rule and such clauses will be invalid. Also, it should be highlighted that confidentiality obligations can continue after the termination for a reasonable time by written agreement.
3. RESTRICTIVE COVENANTS
3.1 Non-competition Clauses
In the Labour Law, the prohibition of competition can be accomplished by a provision in the employment contract or by a non-compete agreement. In accordance with the provisions of the Turkish Code of Obligations numbered 6098 ("Code of Obligations"), an employee may undertake to refrain from competing with his or her employer in any way, or opening a rival business on his or her own account, or working in a competing venture, or entering into any other kind of relationship with a rival enterprise after the termination of the contract.
The following conditions must be met in order for the non-compete clause or contract to be valid.
- The employee must have the legal capacity to act on the acceptance date of the prohibition of competition.
- The non-compete clause or agreement must be made in writing.
- Due to the nature of the job, the employee should have the opportunity to obtain information about the customer environment and production secrets, such that if this information were to be used, the employer might suffer significant damage as a result.
- The prohibition of competition should be limited in terms of geographical region, line of work, and duration.
The prohibition of competition should be limited geographically by determining the city or region. Although it is not generally accepted to specify the limit as "All Turkey", this can be accepted in very rare cases. Also, a non-compete agreement should be concluded in a manner that does not endanger the economic independence of the employee. Therefore, in terms of duration, the prohibition cannot exceed two years except for exceptional cases. In terms of the line of work, competition may not be prohibited in all business lines, but only in those business lines in which the employer operates.
Non-compete agreements should be drafted to include a penalty clause in case the employee fails to fulfil the non-competition obligation. Should there be a damage exceeding that which was set out in the agreed penalty clause, the employer must prove the excess damage in order to claim it. In the absence of a penalty clause, the employer can only demand compensation in as much as the employer can prove damage.
3.2 Non-solicitation Clauses – Enforceability/Standards
Non-solicitation is not directly regulated in Turkish law but it can be regulated via an agreement. The employer can sign non-solicitation clauses with employees or other business partners.
In the case of a contract signed with an existing employee, it may be stipulated that the employee will not act or communicate with the company's existing customers and other employees for commercial purposes for a certain period of time after the employee's employment contract has expired. The purpose of these restrictive provisions for the benefit of the employer is to prevent the employee from causing serious harm to the business by using his or her influence and confidential information about the business. Thereby, the employer can prevent the former employee from soliciting other employees and existing customers. In other words, these provisions result in the employee not being able to benefit from the customer portfolio or company connections of his or her former company for his or her own commercial interests and not being able to make any demands from the company.
Non-solicitation clauses can be included as a clause in an employment contract, non-compete agreement or confidentiality agreement, or they can be issued as a separate agreement. As with the prohibition of competition, since such a clause contains provisions that are intended to protect the legitimate interest of the employer, the employer must have a valid and legitimate interest in imposing this prohibition.
Non-solicitation provisions may also be signed with business partners, third parties and/or clients. The main purpose here is to prevent business partners or customers that can compete with the employer from soliciting employees. Thus, the party whose interests are protected can prevent the other party from claiming its employees or customers for a certain period.
However, for employers, non-solicitation provisions are more important for some key personnel who possess know-how and trade secrets as well as those who are expected to work at the company for many years. Therefore, it may be more beneficial to ensure more comprehensive protection by supporting non-solicitation clauses with non-compete and non-disclosure agreements.
4. DATA PRIVACY LAW
4.1 General Overview
The general framework of personal data protection in Turkey is set out in the Personal Data Protection Law numbered 6698 ("KVKK"). Employers who are in the position of being data controllers are obliged to inform employees and potential hires in accordance with Article 10 of the KVKK.
Within this scope, an employer must inform both its employees and potential hires about (i) the employer's identity or its representatives' identities, (ii) the purpose of and legal reason for processing personal data, (iii) to whom and for what reason personal data will be transferred, (iv) the ways of collecting personal data, and (v) the legal rights of the data subject set forth under Article 11 of the KVKK.
Pursuant to Articles 8 and 9 of the KVKK, employers cannot transfer the information they have obtained regarding an employee to third parties or to persons outside of Turkey without the explicit consent of the employee.
In companies with a multinational aspect, if any of the foreign stakeholders have access to the database of the company, explicit consent must be obtained from the employees in this regard since this situation will be classed as cross-border data transfer. Furthermore, as per a recent decision by the Personal Data Protection Board (decision dated 31 May 2019 and numbered 2019/157), if foreign corporate email services such as Google (Gmail) or Office 365 are used, the explicit consent of the employees must be obtained since this is also classed as cross-border data transfer.
Pursuant to Article 12 of the KVKK, employers must take all the necessary technical and administrative measures within the company in order to protect the personal data of their employees and potential hires. Accordingly, employees must erase, remove or anonymise the personal data of employees who have left the company and the personal data of employee candidates not subsequently employed, since the purpose of personal data processing has come to an end.
The KVKK is reflected in employment legislation in Article 75(2) of the Labour Law and Article 419 of the Code of Obligations.
Article 75(2) of the Labour Law states that employers must keep a personnel file for each employee they employ. This personnel file contains many personal data of the employee. Any data kept in this personnel file must be recorded in compliance with the above-mentioned procedure. Personal data of the employees can be processed provided that the employer has a legitimate aim and it is in accordance with the principle of proportionality as well as by considering the main principles of data processing. Since it is possible to process personal data without obtaining the explicit consent of the data subject in circumstances stipulated under certain laws, it is important to determine the specific documents that are required to be added to the personnel file and to undertake legal research for each sector and employee. Otherwise, employers may face administrative sanctions in the event that they seek explicit consent from employees even though it is not required according to the law.
Article 419 of the Code of Obligations also stipulates that personal data belonging to employees can only be used to the extent necessary for the performance of the relevant work.
5. FOREIGN WORKERS
5.1 Limitations on the Use of Foreign Workers
Foreigners who will be employed within Turkey must have a work permit granted by the government. In order to obtain a work permit, both employers and employees must comply with the limitations set forth under the relevant laws.
The first limit that applies to the use of foreign employees is the "foreign employee quota". As the priority according to Turkish law is to employ Turkish citizens, foreign employees can constitute at most 20% of the total number of employees in a Turkish workplace. However, this rule does not apply to businesses operating in the entertainment, tourism and travel sectors.
The second limit is called the "stockholder equity limit". This means that a company's paid-in capital must be at least TRY100,000 in order to employ foreign employees. However, there is also an exception to this rule for exporting companies. An exporting company can hire foreign employees regardless of whether or not it meets the stockholder equity limit, if the value of its exports was USD250,000 or more in the last year or its annual return is TRY800,000 or more.
Finally, Turkish law prohibits foreigners from practising in certain professions. Specifically, professions such as dentistry, pharmacy, veterinary medicine, nursing, attorneyship, notaryship, security guard and customs consultancy can only be practised by Turkish citizens.
5.2 Registration Requirements
Pursuant to the International Labour Force Law numbered 6735 and the Law numbered 4817 on the Work Permit for Foreigners ("WPF"), employers must obtain a work permit in order to employ foreigners in Turkey. Employers who employ a foreigner without a work permit or a foreigner whose work permit has been withdrawn are in violation of the prohibition of illegal employment.
The only exception to this rule is where it is stated in other laws, or in bilateral or multilateral international agreements to which Turkey is a party, that certain foreigners can be employed without obtaining a work permit.
Work Permit Types
Work permits in the WPF are divided into "temporary work permits", "indefinite work permits" and "independent work permits".
As per Article 5 of the WPF, a temporary work permit can be granted for a maximum of one year to work in a specific workplace and profession. The temporary work permit can be extended for two more years upon an extension application regarding the same workplace and the same profession. After a total of three years, the duration of the work permit can be extended for three more years to work at the same workplace and in the same profession.
In Article 6 of the WPF, it is stated that an indefinite work permit can be granted to (i) foreigners holding a long-term residence permit in Turkey, (ii) foreigners who have stayed in Turkey for at least eight years without interruption, (iii) foreigners who have worked legally in Turkey for at least eight years, or (iv) foreigners who contribute to science and technology due to their education level or professional experience or whose activities or investments in Turkey have a significant impact on Turkey's economy and employment.
Article 7 of the WPF regulates independent work permits. Independent work permits can be granted to foreigners on the condition (i) that they have resided in Turkey legally and uninterruptedly for at least five years, (ii) that their work creates added value in terms of economic development and will have a positive impact on employment.
Work Permit Application
The work permit application must be sent to the Turkish embassy in the foreign country where the foreign employee resides. In terms of procedure, the work permit application must be made to the embassies or consulates in the country where the foreign employee resides.
Following the application, the Turkish embassy sends the application directly to the Turkish Ministry of Labour and Social Security.
The Ministry of Labour and Social Security evaluates the application according to Turkey's foreign employment policy after receiving the opinions of certain authorities.
Additionally, in order for foreigners to be able to work in certain professions that require professional skills, they must obtain preliminary permission from the Ministry of Labour and Social Security or relevant institutions and organisations at the application stage. The work permit applications of foreigners who do not have the necessary qualifications and expertise in such professions are rejected.
As a result of all these procedures, work permits are granted to foreigners whose status is deemed appropriate by the Ministry of Labour and Social Security, so that they can be employed in Turkey for the limited period specified in the permit.
6. COLLECTIVE RELATIONS
6.1 Status/Role of Unions
Unions are organisations established by employees and employers, which have a legal personality under private law and are established as a group of persons aiming to improve the economic and social status and working conditions of members. Regulations regarding collective labour agreements and employee and employer unions are included in Trade Unions and Collective Labour Agreements Law numbered 6356 (STISK). Collective labour law regulations regarding civil servants are included in the Law numbered 4688 on Public Employees' Unions and Collective Labour.
Unions are independent from the state, political parties and other social parties both in their establishment and in their functioning and are in the nature of a democratic mass organisation. Labour unions aim to improve the living and working conditions of their members by demanding better working conditions, efficient social security and higher wages for their members. Ultimately, the most important function of unions is to negotiate collective labour agreements with employers and employers' associations. In particular, labour unions play an important role in the development of labour law and employees' rights.
The aim of employer unions is to protect and develop the common economic and social rights and interests of their members, similar to labour unions.
6.2 Employee Representative Bodies
Union representatives provide communication and dialogue between the union, the employer and the member employee. The duties and authorities of union representatives are regulated in the STISK.
The union representatives at a workplace listen to the requests of the employees and resolve their complaints, and endeavour to ensure cooperation, peace and harmony between the employee and the employer. A union representative is responsible for helping to implement the working conditions stipulated in the labour laws and collective labour agreements by considering the rights and interests of the employees.
The duties and authorities of union representatives can be expanded in line with the union's internal regulations and the collective labour agreements which they signed with employer. Workplace union representatives fulfil their duties provided that they do not disrupt work at the workplace and do not act contrary to work discipline. Employers enable and facilitate union representatives in their workplaces to perform their duties effectively.
Number of Union Representatives
The number of union representatives in a workplace is determined in accordance with Article 27 of the STISK. The main criterion here is the number of employees in the workplace, and the maximum number of representatives will be determined accordingly. According to the number of employees in the workplace, the number of representatives can vary between one and eight. They are chosen from among the member employees in the workplace, and one of the representatives can be appointed as the chief representative.
The duties of the representatives proceed for the duration of the union's authorisation.
6.3 Collective Bargaining Agreements
Collective labour agreements are agreements signed between the labour union authorised to make a contract and employer organisations or the employer, which determine the working conditions applicable to the employment relationship. These agreements set out the terms and conditions of employment that are legally binding for the parties to the contract and their respective members and set out the minimum terms and conditions of the employment relationship.
Collective labour agreements aim to establish order and peace at work by being concluded between a labour union and an employer union or an employer who is not a member of an employer union. In these agreements, regulations regarding the conclusion and termination of employment contracts, the mutual rights and obligations of the parties, the implementation of the contract, auditing and the methods of amicable settlement used for the resolution of disputes may be included.
There are "normative" provisions that determine working conditions and wages, and "regulatory" provisions that regulate relations between the union and the employer. Normative provisions apply to individual labour agreements concluded with union members as a mandatory statutory provision. Therefore, individual labour agreements should not contradict the collective labour agreement. If this is the case, the conflicting provisions of the individual labour agreement will be replaced by the provisions of the collective labour agreement and these provisions will apply. It is possible to include provisions regarding the conclusion of employment contracts, their types and forms, working conditions and the termination of employment contracts, provided that those provisions remain within the purpose determined by law and do not contradict the provisions of the law that are strictly imperative.
7. TERMINATION OF EMPLOYMENT
7.1 Grounds for Termination
An employment contract can terminate by means of (i) the death of the employee, (ii) the termination of the contract by one of the parties, (iii) the expiration of the term in a fixed-term employment contract or (iv) the agreement of the parties. The most common way an employment contract is terminated is termination by the employee or employer.
In terms of employees, the contract can be terminated with or without just cause. In case of termination by the employee without just cause, the employee must wait for the notice period stipulated in the law or immediately terminate the contract and pay compensation for this period to the employer. If there is a just cause, the employee will be able to terminate the contract immediately without waiting for the notification period.
In terms of employers, the reasons for termination are divided into valid reason and just cause. If the employment contract is terminated without these reasons, the employee has the right to file a reinstatement lawsuit within the scope of employment security. In order for an employee to be within the scope of employment security, he or she must have been working at that workplace for at least six months, at least 30 employees must be employed by the employer in the same line of business, and the employee must be working with an indefinite-term employment contract and not be a senior employer representative.
Termination of the employment contract by the employer with just cause may be due to health reasons, due to the employee's behaviour against goodwill and ethics, due to the detention or arrest of the employee, or due to force majeure. In the presence of these situations, the employer can terminate the employment contract immediately without waiting for the notification period. Except for the employee's actions against goodwill and ethics, terminations made by the employer for just cause must be made in writing and the reason for termination must be clearly stated.
Termination of the employment contract by the employer with valid reason may arise from the requirements of the enterprise, workplace or job, as well as from the competence or behaviour of the employee. If the contract is to be terminated due to the employee's competence or behaviour, the employer must give the opportunity to the employee to present his or her written defence. In addition, all terminations with valid reason must be notified to the employee in writing, clearly stating the reason. If the employer terminates the contract with valid reason, the employer must wait for the notice period or pay the notice pay for this period.
Collective redundancies/dismissals are regulated under Article 29 of the Labour Law. The dismissal within a period of one month without just cause of at least ten employees if the number of employees in the workplace is between 20 and 100 employees, at least 10% if the number of employees is between 101 and 300, and at least 30 employees if the number of employees is more than 300 is considered as collective dismissal.
If the employer aims to dismiss employees collectively for technological, economic or structural reasons or as a result of similar business requirements, the employer must notify the workplace union representative, the relevant regional directorates and the Turkish Employment Agency in writing at least 30 days in advance.
Notices of termination become effective 30 days after the employer has notified the regional directorate in writing that it will dismiss collectively. If the employer wishes to hire employees again for the same jobs within six months after the collective dismissal was finalised, he or she can re-employ the ones who have the necessary qualifications for the work.
7.2 Notice Periods/Severance
If the party terminating the employment contract does not have a just cause, that party should comply with the notice period specified in the law in order for the contract to be deemed terminated at the end of this period. If that party does not wish to wait for the notice period, that party must pay the notice pay corresponding to those periods to the other party.
The notice periods are regulated in Article 17 of the Labour Law as follows:
- two weeks' notice for up to six months' employment time;
- four weeks' notice for between six months and 1.5 years;
- six weeks' notice for between 1.5 and three years; and
- eight weeks' notice for employment time longer than three years.
These periods are minimums and can be increased by individual employment contract or collective labour agreement. Decisions of the Supreme Court have accepted that these periods can be extended by mutual agreement up to a maximum of four times.
In the event that the employment contract is terminated by the employer without just cause and without waiting for the notice period, the employee shall be entitled to both pay in lieu of notice and severance (seniority) pay provided that the employee worked at least one year for the employer.
In the event that the employment contract is terminated by either the employee or the employer without just cause, if the employee works during the notice period, he or she has the right to use a two-hour job search leave for each day worked during the notice period. If the employee requests, he or she can use this leave time collectively at the end of the notice period.
7.3 Dismissal For (Serious) Cause (Summary Dismissal)
Employers may terminate an employment contract immediately without waiting for the notice period in case of a just cause such as health reasons, the employee's actions against goodwill and ethics, force majeure, detention or arrest.
The employer may terminate the employment contract if the employee is ill due to his or her own intention, bad lifestyle or addiction to alcohol, in such a way that he or she is absent for more than three working days in a row or more than five working days in a month. The employer may also terminate the employment contract if the employee's absence due to an unintentional accident or illness exceeds the legal notice period. Finally, termination based on health reasons requires a decision of the Health Board stating that the employee's disease is incurable and that he or she is no longer able to perform the job. If the employment contract is terminated for these reasons, there is no need to wait for the notice period, but severance pay must be paid to the employee.
The employer has the right to terminate the employment contract by paying severance pay, without waiting for the notification period, in case of force majeure reasons that prevent the employee from working at the workplace for more than one week.
If the employee is detained or arrested, and his or her absence exceeds the legal notice period, the employer has the right to terminate the employment contract by paying severance pay.
Situations incompatible with the employee's obligation of loyalty such as the employee's absence for two consecutive days without an excuse, inflicting damage upon the employer exceeding one month's wage with his or her fault, behaving in violation of honesty and loyalty such as theft, sexual harassment of another employee in the workplace, and coming to the workplace drunk or under the influence of drugs are stated as acts contrary to goodwill and ethics rules. When there is such behaviour, the employer may terminate the employment contract immediately without compensation.
7.4 Termination Agreements
Despite not being regulated under the Labour Law, mutual termination agreements (MTAs) are common in practice. These agreements can be drafted in accordance with the general freedom of contract principle. However, for these agreements to be valid certain conditions need to be fulfilled.
According to the Supreme Court case law, reasonable benefits must be provided to the employee in order for an MTA to be valid. The reasonable benefit requirement varies depending on who made the offer.
In the event that the employee asks for an MTA, it is considered that reasonable benefit is provided to the employee if severance and notice pay is paid. On the other hand, where the offer comes from the employer, an additional benefit must be provided to the employee in addition to the severance and notice pay. In Supreme Court decisions, it has been said that the amount of additional benefit should be determined according to the length of service of the employee and generally varies between the amount of four and six monthly salaries.
Since the burden of proof that the offer came from the employee is on the employer, it is beneficial for the employer to have documentary evidence proving that. In addition, an MTA must be made in writing.
7.5 Protected Employees
Employment Security System in General
In accordance with the Labour Law, an employment security system has been adopted for some employees, and the employer's right of termination has been limited. Employees who work for at least six months with an indefinite-term employment contract in workplaces where at least 30 employees are employed in the same line of business under the employer can benefit from employment security. However, some employer representatives are exempt from this rule.
There must be a valid reason or just cause for the termination of the employment contracts of employees who can benefit from employment security. In the absence of these reasons, the employee may file a reinstatement lawsuit. If reinstatement is decided, the employee is entitled to four months' salary for the idle time. In addition, if the employer does not reinstate the employee upon the court ruling, the employee will be entitled to receive a compensation of between four and eight months' salary.
Employment Security of Union Representatives
An employer's right to terminate union representatives is limited. According to Article 24 of the STISK, the employer cannot terminate the employment contracts of workplace union representatives unless there is a just cause and the reason is clearly and precisely stated in writing. In addition, the conditions regarding the minimum term of service and the number of people working in the workplace are not required in these instances.
Employees whose employment contracts are terminated due to trade union-related reasons can file a reinstatement lawsuit irrespective of the terms of service and number of employees. In addition, in the event of termination due to trade union-related reasons, employees may demand compensation from the employer in an amount not less than their 12-month salary.
As stated in more detail in 8.2 Anti-discrimination Issues, employees whose employment contracts are terminated based on language, race, colour, gender, disability, political opinion, philosophical belief, religious belief or similar reasons may also demand discrimination compensation in the amount of up to four months of their wages.
8. EMPLOYMENT DISPUTES
8.1 Wrongful Dismissal Claims
In case of unfair dismissal claims, employees generally file reinstatement lawsuits and/or lawsuits demanding compensation (severance, notice, overtime, wage, etc).
A prerequisite to opening a reinstatement case is that the employee must be within the scope specified in 7.5 Protected Employees. To commence the reinstatement lawsuit, the employee needs to follow a strict procedure. After the employer's notification of termination, the employee must apply for mediation within one month, and if the parties cannot reach a solution at the end of the mediation process, he or she can file a lawsuit within two weeks from the date of its conclusion.
In the event that a reinstatement is decided as a result of the lawsuit and the employer decides to re-employ the employee upon the employee's request based on the court's reinstatement decision, the employer must payfour months of idle time wage stated in the decision. If the employer does not re-employ the employee upon the employee's request based on the reinstatement decision, the employer must then pay the compensation stated in the decision, which can vary between the amount of four and eight months' wages. However, as the reinstatement lawsuit is just a declaratory action, it does not bear any consequences unless the employee follows the procedure stated below.
Within ten days after the decision is finalised, the employee must apply to the employer for re-employment and the employer must call the employee back to work within one month.
- If the employee does not apply to the employer to start work within the specified period or does not start work after being called by the employer after his or her application, the idle time wage and the compensation for not starting work will not be paid.
- If the employee applies, and starts to work after being called by the employer, only the idle time wage will be paid.
- If the employee applies but the employer does not call him or her back to work, he or she will be entitled to the idle time wage and the compensation for not starting work.
If the employer does not call the employee back to work, severance and notice pay must be paid in addition to the idle time wage and compensation for not starting work.
In terms of lawsuits for employment compensation, the employee may demand employment receivables from the employer:
- within five years from the date of termination for severance, notice and vacation pay claims; and
- within five years from the date of when wage receivables became payable for unpaid wage, bonus and similar wage-related payments.
If the dismissal of the employee by the employer is not based on a just cause, the employee may demand severance and notice pay.
However, it should be noted that it is mandatory to apply for mediation before filing a lawsuit in disputes between an employee and an employer. Lawsuits filed without first having applied for mediation are rejected due to the absence of cause of action.
8.2 Anti-discrimination Issues
According to Article 5 of the Labour Law, employers have an obligation to treat their employees equally. Accordingly, an employer should not discriminate among its employees in any way unless there is an objective reason justifying the discrimination.
If the employer violates the obligation of equal treatment, the employee has the right to demand discrimination compensation in the amount of up to four months' wages. However, what the Law provides for here is not all types of discrimination but certain types of discrimination. Specifically, employees who are exposed to discrimination based on language, race, colour, gender, disability, political opinion, philosophical belief, religious belief and similar reasons can claim the compensation for discrimination specified here.
An employee who claims compensation for discrimination must prove the discrimination he or she has been exposed to with concrete evidence. However, it is also possible for the employee to prove these claims with witness evidence.
An employee who quits his or her job on the grounds of discrimination can also claim severance pay in addition to discrimination compensation if he or she has been working for the employer for more than one year.
9. DISPUTE RESOLUTION
9.1 Judicial Procedures
Private Employment Forums
The labour courts are the competent courts for reviewing disputes between an employee and an employer. It is mandatory to apply for mediation before filing a lawsuit in such disputes.
If the parties reached an agreement in the mediation meeting, they cannot file a lawsuit regarding those issues that were agreed. Issues that cannot be agreed upon may be subject to litigation.
Class-action lawsuits are regulated under Article 113 of Code of Civil Procedure numbered 6100. Accordingly, associations and other legal entities can file a lawsuit, on their own motion, in order to protect the interests of their members:
- in order to determine the rights of the persons concerned;
- in order to rectify an unlawful situation; and
- in order to prevent the future violation of the rights of those concerned.
Class action is limited to these issues.
Unions have the right to file a lawsuit arising from the employment relationship on behalf of their members pursuant to Article 26(2) of the STISK, and they can also file a class-action lawsuit limited to the above-mentioned demands.
If more than one employee gives power of attorney to a single lawyer, the lawsuits filed are heard in the same court as serial files under different file numbers, even if they are not collective. This ensures that disputes are resolved quickly and appropriately.
Representation in Court
In labour courts, it is not obligatory for the parties to proceed with the case through a legal representative and they can represent themselves. However, given the complex procedural requirements and strict time limits it is advised that both parties are represented by a competent lawyer. If the lawyer has the power of attorney, he or she can conduct all proceedings regarding litigation.
9.2 Alternative Dispute Resolution
Compulsory Mediator Application
The most important and effective alternative dispute resolution method in Turkey is mediation. This institution, which has been based on voluntariness for many years, has been made compulsory in labour disputes since 2018, and similar practices are being introduced in other areas of law.
Pursuant to Article 3 of Labour Courts Law numbered 7036, it is a prerequisite to apply for mediation before filing a lawsuit in an employment dispute and claiming compensation and re-employment, and lawsuits filed without mediation first having been attempted are rejected. An exception to this requirement is lawsuits demanding pecuniary and/or non-pecuniary compensation due to a work accident or occupational disease.
The parties can mutually agree on who will be the mediator. In case of disagreement, the Turkish Mediation Centre automatically determines the mediator after the application is made.
The mediator cannot make a judgment on a dispute in the manner of a judge. The mediator tries to reconcile the parties and, as a result of the negotiations, draws up a record of agreement or disagreement according to the negotiation of the parties. If no agreement is reached, the party that applied for mediation can file a lawsuit.
Resolution by Arbitration
As explained in 9.1 Judicial Procedures, the general practice for labour disputes is to take a dispute to the mediator and then to court. However, in Article 20 of the Labour Law it is stated that after a termination, if the mediation process has failed, the parties may take the dispute to a special arbitrator for only reinstatement claims. Apart from this, for general labour disputes other than reinstatement, resolving disputes by arbitration is controversial in the doctrine.
In a narrow interpretation of Article 20 of the Labour Law, it can be said that only reinstatement claims are subject to resolution by an arbitrator, provided that the parties agree to do so in free will after the termination.
In a wide interpretation of Article 20 of the Labour Law, it can be said that other employment claims can be brought to an arbitrator, without applying the mediation process, provided that the parties agree to do so in free will after the termination.
Since there is a lack of precedent Supreme Court decisions for this issue, the validity of these interpretations is controversial. However, it can be concluded that an arbitration agreement will only be valid after the termination of the employment and it must be shown that this agreement was made with the free will of the employee.
9.3 Awarding Attorney's Fees
As a result of a final judgment, if the prevailing party was represented by an attorney, an attorney's fee is awarded according to the minimum legal attorneyship tariff declared by the Turkish Bar Association. Although this fee is decided in favour of the prevailing party of the case, it is awarded to the attorney of that party, in accordance with the provisions of Article 164(5) of the Legal Profession Act numbered 1136.
This article was first published on Chambers and Partners Practice Guides in September 2021. See the article here.
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.